very confused and stressed

[adkhunter]

Hi all I'm new here. Been looking around at options to help get my family out of the hole we are in. I'm stressed to the max and confused as all can be. I'm not sure what to do or what information I should even supply here to get any sort of advice so bear with me...

I'm 23 married with a step son and one of my own and another of my own on the way (just found this out last week). I have been employed throughout all my life but most jobs didn't pay enough. I'm now currently making $18 a hour plus overtime. I also work for $10 a hour under the table 2 days a week for my father in law at a garage he owns for extra money on my 2 days off a week. So I'm working 7 days a week.

I currently have 4 lines of credit. One is my truck payment (2011 ford F150) I owe only 3500 on it and my payment is quite low at 117 a month. I am current on that. The other 3 are credit cards. BOA and a card through cabelas and one through Zales. I am current on my BOA card with a balance of about 1500. I am behind on both the cabelas and Zales after they jacked my interest rates through the roof out of no where and the minimum payments were just to much to swing at the time so I had to stop paying to make other bills such as rent ($1000 a month). Both of those cards are around a combined total of 11,000. I also have some medical bills from my wife and kids that is roughly $1200. I'm also stuck with paying my wifes lawyer for her divorce from her ex since her father stopped paying it which is about $1800.

The constant calls from creditors is making me a nervous wreck. I'm working my butt off and can't seem to get a handle on these debts. All other bills such as rent, TV, electric, cell phones are all current and made every month. I see these as essentials and give them priority as well as my truck.

I also just started this new job at $18 a hour and have yet to begin to attempt saving or try to hack away at the debts I'm just afraid I won't be able to before I even begin. My wife is very concerned we will never get out of this debt and that we will never be able to buy a house at some point in the near future. I'm have never considered bankruptcy until now...I'm stubborn and proud and see doing it as admitting defeat and giving up. Trying real hard to do the right thing and pay what I owe.

So I guess what I'm getting at is...would filing for bankruptcy be in my best interest? I am lost and confused. I have tried working with the credit card company's and all I get is the ring around to no avail. They don't want to help at all. I'm also concerned about losing my truck if I do file. I owe so little on a 2 year old expensive vehicle it seems crazy to let it go. I plan on keeping it a long time and my wife drives it and it makes me feel better knowing my kids are in a big safe vehicle especially in the NY winters.

Any advice will be very much appreciated. Thank you for your time!

[bcohen]

Based on your situation, bankruptcy does not appear to be in your best interest at this time.

First and most importantly, you are not facing any imminent threat at this time, such as a lawsuit, garnishment, etc. You could quit paying all your unsecured debts and as a non-homeowner, it is likely that you won't be sued for a year or more--if ever. Filing for bankruptcy when there is no lawsuit, judgment, or other major threat is rarely a good idea. The purpose of bankruptcy is to protect your assets from creditors; if you haven't been sued, and aren't facing any attempt to seize/repossess/garnish anything, then there's nothing to protect yourself from.

Second, your wife is now pregnant, and with that can come significant medical bills, both before and after the baby is born. If you file for bankruptcy now, you won't be able to file again for 8 long years. What if you end up incurring a lot of costly medical bills as a result of this new baby? If you haven't already filed, then you are in an excellent position to negotiate with the doctors/hospitals, and if they won't budge, then you file for bankruptcy and the medical bills will be discharged. If you have already filed, then you're stuck, and hospitals can be ruthless--some will choose to sue and garnish wages, rather than work out a reasonable payment plan.

My advice is to quit paying the credit cards, and unless your wife's divorce decree makes her responsible for the attorney fees, quit paying those too if you can't afford them. Focus on paying for the things you actually need, and on saving up an emergency fund, so you'll still be able to pay your rent, utilities, etc, even if work slows down, and you don't get as much hours as you're accustomed to. You will have plenty of time before the creditors try to sue, and that's if they ever do, which may not even happen. You can always file for bankruptcy in the future if it becomes necessary.

[tobee43]

bcohen gives excellent advice as always.

additionally, it's never to late to file. if thing start to spiral out of control,you always have that option. i know its difficult to save when there simply not enough money to go around. but it worth a shot! best of luck!

[Drazil65]

Hi, a lot on your shoulders for just 23 yrs old. Ok, how do you eat an elephant? One bite at a time, so break it down one thing at a time. Overwhelming yes, insurmountable no! First, I guess because you did not mention it I will assume (I know!!!) that your wife does not work? Now with her being pregnant it is not going to be a good time for her to get a job BUT she may have to (even part time would help). At the least she must do something at home (babysit maybe) to help out as your biggest issue is not enough income for what you have going out. That being said, go back and examine what you have going out like tv, you may have to cut cable for a little while and maybe go to straight netflex (or the like) for $9.00 a month, you will get used to it. Next, cell phones, how many do you have and you may have to go to one only, period. You do what you have to do, it builds character!


Do not worry right now about buying a house, at 23 you have plenty to learn about the American dream of home ownership and time is on your side for now. BUT, you may have to look for a cheaper place to rent, seriously take a look at it. Moving sucks but again you do what you need to do to get through the tough times and prepare for the future. There is no doubt that your wife needs to contribute in some way to the income and babysitting for one or two children can bring in a couple hundred dollars a week in some cases so worth looking into.

You have been given excellent advice in the previous posts and the only thing I would add is to search for "Google Voice" on this forum, read about it and then set it up on your phone(s) and computer, life saver and no more creditor calls, this will help big time. Good Luck!

[Pandora]

all great advice above...as always.

May I suggest a few things?

- Coupons: if you're not currently using them already - with a baby coming, you're going to need to save money and baby coupons can save you TONS.


- Free Samples: OMG - TAKE ADVANTAGE OF THEM! You can find them everywhere online and, given you're having a new member to the family coming, many baby companies will send you TONS of free full sized samples.

- Yard Sale: Perhaps go through your "stuff" and determine what is really needed, then have a yard sale, using that money to set aside for when the baby comes or for ER purposes?

- Wants vs. Needs: very important to determine the difference between these two things. Its hard to do with kids, let alone adults, but you can do it.

- Speaking of kids:

Clothing, toys, etc - look for upscale clothing Re-Run shops, like Once Upon a Child to bring your gently used kids clothing to. You can get cash on the spot for them or store credit for future purchases (again thinking of your baby on the way). you could also get together with friends / family and have a "gently used" clothing / toy exchange of your own


Also worth noting - there are upscale Re-Run shops for women as well - such as Pandora's Closet. You can also use GoodWill and the Salvation Army. Dont be too proud - I've purchased many brand new things from GoodWill that still had the tags on them Saved me a TON of money!

Christmas / Birthdays: use layaway plans - or - set aside X amount every month throughout the year and set a budget, dont go over that budget. This also works for family members. If money is tight, draw names or simply buy for the children only and set a limit of X amount per gift. We havent purchased for each other nor brothers, sisters, etc in years - we only buy for our own children and our 2 neices / nephews and our mothers; thats it - and all have monetary limits.

Entertainment: There are numerous free things to do locally in your area if you look. Check your local Parks & Rec, the library, newspaper, etc. During the summer there are free to minimal ($1) movies for the family as well as AMF offers their Free Bowling Program to kids ages 15 and under, along with a family pass for up to 4 people (ages 16+) for $30 for 2 games of bowling every day from May thru September. Also check with the local high schools if they have a drama club - many times they put on plays throughout the year for very minimal charges. Our HS has a wonderful drama dept and they always put on the best plays. Cant beat paying $5-$8 to see RENT, Guys & Dolls, Sweeney Todd or A Christmas Carol!

If you search the forum, you'll find many more cost saving measures and ideas you can use...these are just some.

OMG... cabella's - dream store for my hubby, like Bass Pro Shops - cut that card up

[keepmine]

I'd agree with the others. BK is a backburner issue right now.
NY allows you to use federal or state exemptions. With no home to exempt, there is a $11,500 wildcard that can be used to protect the auto as well as the $3K plus auto exemption

http://www.thebankruptcysite.org/exemptions/newyork.html

[keepsmiling]

Welcome to the forum.
You may be one of the few people for whom settlement makes sense. But they won't settle with you while you are still paying. Stop paying and see what happens. Hold out for a great offer. You have options. BK is not the right answer for you at this time.

Come back and tell us what's going on and how you are making out.

Best of luck to you and your growing family. Now is a good time to learn budgeting!

[ksgirl38]

Not sure I agree with the above advice, but your total debt amount doesn't look like it warrants a BK at this time. Not to say that it isn't causing undue stress or concerns, but paying it off is certainly doable. I like some of Pandora's suggestions for helping you save money. I hate to suggest this, but is there a possibility of switching the Cabela's or Zales balances to another account with an introductory 0% interest rate. Many cards offer this and it might be enough to help you get the balance paid off before that 0% interest runs out. Is there anything you could sell? The best advice I could offer is to try to combine as much of the debt as possible and stop using credit cards and switch to cash. That really does help you control your spending. Then just concentrate on making those payments and getting it all paid off. You can do it. Best wishes to you.