How to Get Out of Debt With the Get Out of Debt Guy » anxiety

I Just Want to Run Away From This Financial Mess. – Denise

Steve Rhode — Sat, 06 Nov 2010 19:05:35 +0000

“Dear Steve,

My husband and I lived in a nice house with our five kids. He made six figures until his business went under in 2007. We filed for bankruptcy in 2008 thinking we could save our house and car. We ended up losing the house anyway because our trustee payment was $900 and they increased our mortgage to help pay back what we owed. We ended up moving to another state so my husband could get another job (he’s in construction) and I went back to work.

We thought it would get easier. Now we pay $900 for the trustee, almost $2000 in rent, $1200 in daycare and the rest of our fixed expenses make it almost impossible to live. We are truly struggling to figure out how to fix this problem. To make matters worse, my mother fell very ill last month and I flew to see her, then she passed away so I flew to the funeral. My family paid for the trip, but I have to pay them back and my husband’s job didn’t have enough work so he missed a week’s worth of pay.

We are on the verge of having everything shut off, water, electric, car insurance canceled, and I am trying to juggle what needs to be paid and there’s not enough to go around.

What happens when you miss a trustee payment? How do we get out of this mess? I just want to run away. The stress is keeping me up at night. Is there any place we can get immediate assistance? I would appreciate any advice at all.

Denise”

The Answer:

Dear Denise,

The first thing that comes to mind is maybe you need to talk to your bankruptcy attorney about converting your Chapter 13 bankruptcy to a Chapter 7 bankruptcy. It sounds as if your situation has dramatically changed and you’d probably be able to now pass the means test for Chapter 7 bankruptcy.

I’m so sorry to hear about the passing of your mother. My mother has cancer now and it is something that I think about, dreading. I hope she doesn’t read this. I can’t imagine the pain and loss you are dealing with.

Not only have you lost your mother but your past financial life as well. When I was living through my financial problems I wanted to run away as well. It’s a normal and natural response to the stress.

But let me suggest an alternative path. The money troubles will be resolved once we can tackle the past debt, hopefully by converting your case to a Chapter 7 bankruptcy, you get your current life to fit within your current income, and you can find a glimpse of gratefulness and acceptance in your daily life.

Much of the stress we create for ourselves in this mess is caused by our desire to alter the physics of life. It’s like being disappointed when you can’t make the sun shine when you want it to. Wanting the financial problems to go away and the stress to vanish when your outgo is more than your income is just not possible. Until you bring that equation back into balance you will continue to feel like running away.

So how do we bring it back into balance? With action. I need for you to take action to talk to the bankruptcy attorney about converting your bankruptcy and I need for you to take action and read this, this, and this.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

I’m Depressed, Anxious, and in Debt. – Victoria

Steve Rhode — Tue, 24 Aug 2010 14:14:50 +0000

From How to Get Out of Debt

“Dear Steve,

Currently I’m not making enough to cover my bills. I am an independent self-contractor (not by choice – just happened) & my pay varies per customer service email I answer within One Week (1 random email is chosen each week to grade and it’s either 90 cents or 62 cents) Luckily I have a partial brain and I get the 90 (I am much more concise with those. I do apologize for this novel). In addition, I do not work to my full potential thanks to a handful of labels (i.e. depression, anxiety, Adult ADD) as well as working from home. Without insurance, my meds are all paid out of pocket which has meant on a credit card. 3 years ago, my credit score was as close to perfect as possible. That is when I had to move out on my own and I spent far more than I made – no more than before, but now I was also paying rent and utilities!

I am fortunate now in that my boyfriend is OK (not jumping for joy, but I do as much as I can around the house) with me not contributing financially for now. For the 1st time since late ’04 I was just late on my truck payment which is the smallest of my debts at $2,000. The credit union I use luckily has a generous 10-day grace period so I was able to take care of that!

Meanwhile, my credit card debt is $14,700 (ya know how certain numbers just make you feel ill) making my minimum payment over $300. Prior to making my last, insufficient payment of $200 I (being clueless & never taught how to manage $) realized I should NOT have paid them that much as it left me with NO money for my student loan payment nor any OTHER money whatsoever. I was just trying to give as much as I could – or THOUGHT I could.

The student loan balance is $6,600. In December, I called them and was told I would be on a forbearance plan; which would drop my payments, but of course, ultimately I would pay more over time. I agreed. The gentleman whom I spoke with did not fully enter this plan into the system which I didn’t find out until 3 months later. Their website has always been unclear (payments shown in 3 places and never correct – plus it’s two loans that were consolidated and it’s just never made sense to me which I have asked them about with no response) so I would just pay $80, more than my min. Well, thinking I had this lower payment, I became late and later and now past due. So, I paid the initial late fee (only about 28 bucks) because at that point I was not AS up the creek as I am now. The next day they told me I was late over 300 dollars!!! This entire time (via email – as I like to have a written record), they are ignoring my pleas regarding my financial situation. They told me about the rep not putting the plan in correctly…just nonchalantly as if it were no big deal. They told me to send pay-stubs and I did TWICE. They have COMPLETELY ignored me. Now they are calling every day and I just don’t have the guts, knowledge, patience, calm nor medication needed to SPEAK with them. But I have to, I know. They will not answer my emails anymore. I do not work in any field even remotely near the pointless degree I am paying off, which is not their fault of course, but adds to my frustration. I make maybe 3-400 dollars a month. I could make more. That is another story. When I started I was told this would be full-time and how EASY it was (so many shiny promises), then after the holidays they said, “o no, this is just a side job – we NEVER said this could be FT” ….I guess I just hallucinate.

I answer emails for 20 different retail websites and I am a perfectionist to a FAULT so, it’s not the best fit for me. But it’s ALL I HAVE. So I searched and searched and searched everywhere, any job – Walmart, Walgreens, Target (they NEVER even consider interviewing me. No calls unless I know someone and then no interview… My dad says I should change my last name – it’s still my maiden name, never married – not sure about that. I would have to agree, but also I think my resume is bad?! Should I dumb it down??…. had 3 (2 were “for sure”) great (well, min wage, but shoot, that’s fine) job leads. None came through. I was going to do also do emails of course. I’m at a point now where I need to start looking again even though I have Zero confidence and have been isolated for 10 months which is not very helpful for depression and anxiety. I am so overwhelmed at everything and have been – it just gets worse and worse. Also, supposedly I have Adult ADD so that’s been fun too.

In talking about this my boyfriend has divulged his EXTREME debt due to a business he opened and had to close after 2 years. He took a 2nd mortgage out on his house. He’s starting the bankruptcy research process. He’s in retails sales now and there is a chance he could get into management which would mean moving…and would coincide with losing the house :(……Sigh.

I am grateful to have a few close friends to lean on though. I don’t know what to do regarding the Credit Card balance and the student loan. I get offers every day for balance transfers. I looked online and saw even better offers (I think?!). Would it make sense to transfer SOME of my large CC balance to a new card with a 0% APR? Some have that 0% for a year! I highly doubt anyone would give me the credit line that BOA did. I don’t WANT IT.. I still have thousands left. Now of course I can’t use the card, which is good. It means no food except on a Target card that HAD a zero balance and has a $500 limit. I know my biggest issue is the fact I am not making enough income! While I sort that out (sigh) if the transfer sounds like a good plan, do you have any recommendations regarding sites or cards? I also have an American Express with a zero balance. I had transferred from that to the BOA card as the BOA card had a 0% interest deal and it’s only 10.24% APR, the lowest I have ever seen, bit of course at this rate it doesn’t really matter. heh. I think that and my high credit limit are due to the fact I banked with them for many years (from the NCNB days) and also when I got the card I had much better credit. Of course Target and American Express both lowered my credit limits significantly about 2 years ago.

I know I need to speak with BOA and the loan company. Any tips for that? I am CLUELESS. I’m trying to not be upset with my parents…my mother, may she rest in peace (she died when I was 17), spoiled me rotten and though my father made very good money he was frugal and had grown up during the depression so I understand his mentality. My mom would buy me and my siblings SO much and say, “Don’t tell your father!”… so often, that even now, 17 years removed, I can hear her say it in my head like it was 10 minutes ago — and then feel the guilt. Yay! haha. The problem is, I was never taught how to budget, manage $ at all or given chores, responsibilities. My father and I were lost when my mom died as she did almost everything. He took out a credit card (his account) with my name…I went to college…and had that for years. He’d pay it each month – I’d get schoolbooks, groceries, CDs, clothes…anything =. I didn’t go crazy, but my lifestyle (as far as materialism) was exactly the same without any work on my part.

I did find jobs and held on to a good one (not $-wise, but I LIKED it). About 2-3 years later, my dad re-married and his wife said he was crazy for still giving his kids money. I no longer had his CC at that time, but he had given my brother and sister Tons of money – I mean, he financed a Bar for my brother – bailed my sister out of debt and she has since filed some sort of bankruptcy twice! So, after the wife came along he told me that we (my siblings and I) were all “off the payroll”. Now, I was about 22ish I think. That makes sense (shower us with anything our our lives, don’t teach us how to manage money, pound into our minds that spending money is evil, and cut us off!) and I wasn’t getting any $ from him at the time, my siblings were… Regardless I was “lucky” to find shelter with various friends etc. I would pay nominal rent. I was never on my own until 2007 when my boyfriend of 7 ½ years had ignored me (100%) for a week and I basically just knew…I’d have to leave. I think he loathed me for a good 3 years at least, Talk about holding everything in!!! He brought me to this town and I don’t regret that. Life’s too short, but he said when I found my apartment (he was just like my father, sickly enough), “now you will learn how to be responsible”. Huh?! This was coming from a guy who makes a boatload of money at UPS (been there since 19 so he hates it, but makes SO MUCH and spends it all on frivolous things. When I met him he was 30k in debt. His father died a year later and he was able to pay that off. Then he just though he was hot stuff…no more debt and somehow I should pay as much as him for everything even though he made 4x as much as I ever did… So I just didn’t care. I found an apartment within 1 day :) and then the spiral slowly began. And here I am about 24k in debt (took a bit less than 2 years, with health issues, psychiatrist is 105 a session (just canceled my next one), cat at the vet, had a problem with online virtual games for a bit (o how insane!)…just stupid stuff. Luckily I’m not into clothes and shoes! If my dad knew he’d have an instant heart attack. He expected me to pay my truck off immediately. Every time I saw him for the first year he called it my “dependent” and asked when I would be done paying….he does not use credit, which is awesome, but hey, maybe I could have been let in on some secrets/thoughts/ideas/insight there.

Sorry this is lengthy, but I am at my wit’s end. ANY advice is good…except what past doctors have said, “you need to make more money” (that was a psychiatrist whom I no longer waste $ I don’t have on) and “you need to find a job with health insurance”. Man, I never thought of that. WOW….i just don’t know. Life is very bizarre.

Be well…Victoria”

The Answer:

Dear Victoria,

It is refreshing to get a question with so much detail. Thanks.

I think your situation is a good example of how money problems are the symptoms of the underlying issues. There certainly have been a number of issues that have lead to your current indebtedness. It isn’t just one thing.

This is just my opinion and as always, I reserve the right to be wrong, but I think the most reasonable and logical path at this time is for you to consider bankruptcy. Here’s why.

Based on your current income and the reasonable expectation you will find a higher paying job, it seems unlikely that more income is just around the corner.
Your ability to pay for appropriate medical care and medications right now is more important than the debts.
It sounds like you’ve learned some very good lessons from what you’ve been through to date and hopefully you will carry those lessons forward with you and not repeat the mistakes you’ve now learned to avoid. There’s no sense wasting a perfectly good mistake I always say.
You are currently unable to save any money and you need an emergency fund to protect you in case an unexpected expense comes up.

If you want you can click here to find a local bankruptcy attorney and go talk to them for free about your financial situation. Bankruptcy won’t discharge the student loans but with the other debt gone you can finally start making some progress towards those loans.

Additionally, if your student loans are government backed then look at the Income Based Repayment program (IBR) to reduce your payments. And based on your income you should review the government benefits available and see if you are eligible for any of them. It sounds like you would be eligible for Medicaid to cover emergency medical expenses and that’s worth investigating.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

I Am Unemployed and Can’t Pay My Charge Card Bills. – Fran

Steve Rhode — Mon, 16 Aug 2010 22:34:09 +0000

From How to Get Out of Debt

“Dear Steve,

I was laid off a year ago and apply to jobs/agencies daily to no avail. I am using up what little money I got from a slip and fall lawsuit that I had to accept a horrible offer on which is my small savings acct. and I am really scared – once it’s gone, I can’t afford my mortgage for my small condo, car ins., living expenses and a horrible $600/month health ins. cobra pymt!

I was told I can’t modify my mortgage since I am unemployed. I have no where I can go, can’t sell since I owe more. I have not paid any of my charge cards in 8 months, since I can’t afford it. I am afraid to go bankrupt at 50 years old, my mortgage adjusts next May…..OMG….I can’t sleep at night, my phone rings constantly from creditors, I am so depressed, worried, anxious. I am on the ext. of unemployment which ONLY covers the mortgage and soon that will end. What do I do? Help me!

I am unemployed, using my savings to live and unemployment and can’t pay my charge card bills, what do I do?

Fran”

The Answer:

Dear Fran,

First, take a deep breath, I’m here now. We can work through this together.

The stress is amplified by the fear and collection pressure you are under. That stress leads to depression if unchecked and depression leads to inactivity and inactivity leads to you just waiting for all the bad stuff to happen to you.

First, forget paying on the credit cards. They are not a priority debt. Your mortgage, utilities and health insurance is much more important. But even then, you are running out of savings and the unemployment is going to stop soon, you say.

So, everything aside, the number one priority is to find a replacement for the income. If there is nothing available in your area, you need to move to a place their are jobs. Some parts of the country don’t have enough applicants for all the jobs available. Take North Dakota for example. The unemployment rate there is 60% lower than the national average.

At 50 you don’t need to worry about feeling like you are at the end of the road. I hear 50 is the new 30 since we are all going to be working till we are 90.

If you decide that relocating before you run out of cash is the way to go then stop paying your mortgage. The best approach will be to tidy up all this unmanageable debt with bankruptcy so you can get a true fresh start some place else. But the key here is if you’ve waited too long and used up all your available cash. Hopefully you have enough to move and pay a deposit on a rental unit someplace else. You’ll also have to pay for bankruptcy.

And bankruptcy will stop the collection calls and leave this debt behind you. Your credit can get rebuilt once you have income coming in again.

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Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

I Worked For You, Remember Me? I’m Now Bipolar and in Debt. – Victoria

Steve Rhode — Thu, 17 Jun 2010 20:52:23 +0000

From How to Get Out of Debt

Victoria

“Hey Steve,

I worked for you in 97-98. Blue haired IT Girl? =}

Anyway, things are pretty not cool. I need to sign up for a program or something, but I’m not even sure that is possible.

I’ve learned some things, since 97 and 98. I’ve learned that I am bipolar, and have a pretty bad anxiety disorder. Later I learned about recovery. =)

So yeah, I’m on full disability. My SSDI barely covers my essential needs. In the past, when I felt well enough, I supplemented it with employment, could even hold jobs down for awhile, get stuff paid off somewhat, then get sick, lose the job, rack up the debt, and begin again. I’m tired of this.

With my supports, I have managed to find a way to meet my basic expenses, that’s it, but none of us have the experience to figure this out. It’s really, really, tight, but for the last 3 months, I have finished the month, in the black!

I’ll upload a basic budget, you’ll see that I’m not exaggerating. I can manage, possibly, $30 – $50 total a month, depending on the month, to try to repay some of this stuff.

While I am using that $30 – $50 to pay off some debts, the ones that don’t get paid, and up charging me $40 late fees. And I have enough late fee’s, that now I have $40 over-the-limit fees. I have no limit over $2.6k. So, my debt doubles every month I don’t pay it.

The good news, is my day-to-day life is ok, but the wreckage of the past seems really impossible. Do I just turn a blind eye to it, or what?

Vic”

The Answer:

Dear Victoria,

Of course I remember you. You were an amazing person, so brilliant and talented. OK, not so brilliant with the story of staining your tub blue when you died your hair, but otherwise, a real joy to know and work with.

I think the situation we are faced with is one of recovery and repair.

It is not uncommon at all for money issues and bipolar disorders to be interrelated. The financial carnage left behind does not surprise or shock me. But for many who have lived through that situation it is a lingering and painful reminder of the hurdles they have overcome.

Realistically, the possibility of fully repairing the past is unlikely. But you have to ask yourself if you have a greater responsibility to fix the past or fix the future. The correct answer is that it is much more logical to focus on the days ahead than what has already passed.

If you had $50 a month I would much rather see you put that in a savings account, than live to the edge and embark on a never ending journey of attempted repayment. That course would leave you living on the edge each month, unable to save to protect yourself and be insufficient to get you out of debt.

In addition I can’t see how living with the continued stress, pressure and worry helps you to live a better recovery. Your physical and mental health and well being are the most important factors we need to focus on.

So, I personally think that a repayment program would be the wrong path for you to follow. If you did you’d only make months or years of payments and have it fail when the next unexpected situation occurred and you had no emergency fund to help you across that valley.

Victoria, I think the time has come for you to close the door on your financial past and turn to face a better future. The way you do that is by legally severing your obligation for the old debt through bankruptcy. Bankruptcy will stop all collections and nullify your obligation for that old debt. Now, that doesn’t mean that you can’t repay after bankruptcy, without interest or obligations, what you can afford if you want to repay as part of a recovery process to make amends.

I know that money is tight and you don’t have the funds to pay for a bankruptcy attorney, but there is a listing of bankruptcy attorneys that may be able to provide you with free service. You’d still have to pay the court filing fee. Check out this link for free bankruptcy help. I think you’ll qualify for free help with your local provider.

I wish I was there to give you a really big hug. I always felt that my employees were my extended family.

Thank you so much for coming back to ask me for help. I am so proud to have worked with you and to know you.

@GetOutOfDebtGuy

Money and Stress: How to Keep Your Money Worries From Killing You

Amanda Miller — Thu, 03 Jun 2010 16:07:57 +0000

From How to Get Out of Debt

A recent study at Ohio State University found that people with financial problems, in particular credit card debt, suffered from more emotional problems than those who didn’t have money-related stress.

When you stop and think about it, it really is not surprising that cash, or the lack of it, so greatly affects our emotions. Money problems are not simply a shortage of small pieces of green paper, they are shortages of the niceties in life we have come to expect.

Money problems mean not fulfilling dreams of giving our children the best education possible.

They mean dreading answering the phone for fear that it will be a bill collector calling.

In our worst fears, financial problems threaten the roof over our heads and the food on our tables.

Some of the most common types of emotional distresses people with money problems experience can be classified as either depressive disorders or anxiety disorders.

Bob’s Story

Bob took pride in his ability to provide for his family. He wanted to make sure that they always had the best and that his three children had a bright future.

This usually meant living to the very limit of their budget. But there was always overtime available to help catch up when things got out of control.

Then Bob’s company instigated cutbacks and no overtime was available. As demand for his employer’s products diminished further, things got even worse and he actually got a pay cut.

Suddenly Bob could no longer “catch up” with his overspending and he found himself falling further behind each month.

Bob started feeling very bad about himself. He lost his appetite and nothing seemed fun anymore. The constant worrying would often wake him up in the middle of the night and prevent him going back to sleep. To Bob, life no longer seemed worth living.

Like many people, Bob was suffering from depression as a result of his financial problems.

Psychological research has shown that when people feel powerless to change an unpleasant situation, such as money problems, a natural response is to become depressed.

The depression and feelings of powerlessness often become intertwined and can send people into a downward spiral — you become depressed because you feel you can’t change your situation and then the depression makes you feel even more powerless which, in turn, leads you to feel even more depressed.

Some think that depression is merely a state of mind that people can snap out of if they are willing. This is not true. Depression is an illness, just like heart disease or diabetes.

Like these illnesses, depression can sometimes be treated through lifestyle changes with the help of a qualified counselor. Sometimes treatment may involve use of medication in conjunction with talking therapy. The good news is that effective therapy can often bring depression under control within a period of six weeks to six months.

Signs of depression include:

Depressed mood most of the day, nearly every day
Lack of pleasure in activities you normally enjoy
Lack of motivation
Change in appetite
Sleep problems
Anxiety or restlessness
Feelings of guilt and/or worthlessness
Problems with concentration
Lack of energy
Thoughts of suicide

If you or a loved one has experienced five or more of these symptoms for a period longer than two weeks, or if your symptoms interfere with your daily activities, consider contacting a licensed therapist, psychiatrist or your physician for an evaluation. Lower cost alternatives may include clinics at your local university.

A word about suicide …

Some estimates indicate that as many as 15 percent of people with untreated depression may attempt suicide. People may feel that suicide is the only way out of their problems or see it as just punishment for their predicament.

It is very important to seek help immediately if you find yourself considering suicide. Talking to someone may not provide an immediate solution, but it will help you feel less hopeless. Call 1-800-SUICIDE for help 24 hours a day, 365 days a year.

Sara’s Story

Sara also had been struggling with bills for several months.

A few months back she began to delay opening some of them until the very last minute, because she knew that she didn’t have the money to pay them all and it was very upsetting for her to try and deal with the situation.

Over time, she became more and more anxious about opening bills and began to put them off for longer and longer periods.

Even though she was trying to minimize the amount of time she spent working on her bills, the amount of time Sara spent thinking about them was increasing. In fact, she found herself having a hard time concentrating on anything else.

She became terrified of answering the phone for fear that a bill collector would be on the other end.

Sara became very fidgety and tense and just could not seem to relax.

It’s normal to feel a bit anxious about important events or issues in our lives. Being unable to control or turn off the feelings may be a sign that the anxiety you are feeling is more than plain, old-fashioned nervousness.

As with a depressive disorder, an anxiety disorder is a real illness that often requires the attention of a qualified professional to deal with.

Also, as with depression, most types of anxiety disorders can be treated by working with a counselor and sometimes require medication.

Anxiety disorders sometimes occur with depression.

Signs of Generalized Anxiety Disorder

Excessive anxiety and worry that is difficult to control
The presence of at least 3 of the following:
- Restlessness
- Being easily fatigued
- Difficulty concentrating
- Irritability
- Muscle tension
- Sleep disturbances

Anxiety disorders can take many different shapes in addition to those described above.

Sometimes a person will have intrusive thoughts over and over again.

Other people find themselves repeating tasks, such as hand washing or reviewing bank statements, compulsively.

In yet another type a person may have panic attacks or feel overly anxious about leaving the house.

If you think you may suffer from an anxiety disorder, there is help readily available. Consider contacting a licensed therapist, psychiatrist or your physician for an evaluation. For more information, contact the Anxiety Disorders Association of America, 8730 Georgia Ave, Silver Spring, MD 20910. Their telephone number is (240) 485-1001.

Don’t Be Afraid to Seek Help

It is ironic that two of the most prevalent problems in our society, financial and emotional distress, are among the most stigmatized problems. Because of this, people are often embarrassed to seek the help they need.

You are most certainly not alone. It is estimated that as many as 5 to 12 percent of men and 10 to 20 percent of women may suffer with depression at some point in their lives.

With bankruptcy rates at an all-time high, more and more people are feeling the pressures of stress related to their finances.

DON’T BE AFRAID TO SEEK HELP!

I firmly believe that there are answers to almost any financial problem. And there are very effective treatments for the emotional distress associated with financial problems.

If you, or someone you love, is experiencing emotional distress, I strongly urge you to use some of the excellent resources available. Help yourself feel better and get back on the road to financial freedom and emotional wellbeing. You deserve it!

I Am In Constant Anxiety About Our Debt. – Amy

Steve Rhode — Thu, 01 Apr 2010 22:11:11 +0000

From How to Get Out of Debt

“Dear Steve,

I am married with 2 young children under the age of 5. My husband has been out of work since the Fall. He is under a non-compete which makes it difficult for him to find work in his field until November 2010, at which time the non-compete expires. I include this info because there is a real possibility of our income increasing. But struggling until then.

I am working full-time and make about $40,000 gross. We purchased a home 3 years ago and are current on all of our payments. We may be just a little “under water” — by a few thousand dollars– or we might have just struck even given how home values have fallen. So have no equity. Not able to refinance b/c our mortgage is not held through Fannie or Freddie– and we owed more than 90% of the value of the home.

We are current on all of our bills. However, the ONLY way that this is happening is that we are putting what we can on credit– so digging ourselves deeper and deeper and deeper into debt. We owe $33,000 on our credit cards. I didn’t know that we owed that much until I added it up the other night and had a subsequent anxiety attack. I keep having them whenever I think about our situation.

We also owe probably $35,000 is student loans (currently in forbearance/deferment)– we went to grad school and came out with a lot of debt.

We owe about $3,000 on our van and are paying about $176/month on it. We own our other car. (which I’m praying does not die on us).

My husband is home with the kids right now and they are in care only one day a week so that he can job hunt/go to interviews.

Thank goodness we live in a state that helps working families afford health insurance — it is the only way that we have it right now– through a State program.

My husband has about $27,000 in a 401K. I have about $6,000 (but can’t access since I’m still employed at the same place).

We have made a series of bad choices that have led us to this point in time. I regret them all horribly and am so ashamed of where we are at.

We have about $3000 in savings and maybe about $3000 (“extra”) in checking that I have been hording just because I have no idea what is going to happen from day to day.

I still need to read your piece on All about Bankruptcy b/c I have a lot of unanswered questions.

I just can’t stop thinking about all of this.

QUESTION(S):

What do we do next? Keep using credit to “float us” until the Fall? (We have additional credit to use fortunately/unfortunately) What is the point of no return? I feel like we might be there. Where we’ll never be able to pay all of this off no matter what we do. Use the $3000 in savings to pay off the van so at least we own that/it can’t be taken from us? Try to sell our home? File for bankruptcy?
Any advice you can give will be very much appreciated.
It is a strange relief just to put all of this out here into space. I can’t stop thinking about it all. My husband suffers from depression and I want to protect him from all of this as much as possible. we talk and he knows that things are dire– but neither of us have any idea about what to do.

Amy”

The Answer:

Dear Amy,

First, I need for you to stop focusing on the past and turn around to face the future. Whatever mistakes you made, learn from them and don’t make them again.

If it is possible for you to rent a suitable living place cheaper than the cost of the mortgage than you might want to think about making plans to move to a rental and hand the house back to the bank.

If you were not paying your bills would you be able to use that money instead to get by on? Would it be enough to make a difference? If so then the time has probably come to stop paying the bills, let them go into collection and use the money instead to make it through the month. Once you default on the bills you will get collection calls, it will hurt your credit and down the line you may be sued but all of that can be stopped cold with bankruptcy. Being in collections sucks but trying to feed a family on a meal of paid bills sucks more.

The goal right now is finding a way to make it through the month just paying for the basic minimums to live. Until your husband can go back to work in his field he should suck up his pride and go apply at all the temp agencies in town and take whatever assignments they can send him on.

The key to this transition will be increasing income, lowering expenses by not paying them, or a combination of both.

I know you are stressed and anxious but that is primarily because you are constantly worried about what will happen and waiting for the other shoe to drop. You are tensely poised in a reactive mode. I need for you to instead be proactive and take charge of your debt by coming up with a plan on how to either pay it or discharge it.

As part of your proactive research I want you to click here to find a local bankruptcy attorney to go talk to. Go, listen, ask questions and educate yourselves what bankruptcy would mean for you. Talk to the bankruptcy attorney before you payoff the van.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

@GetOutOfDebtGuy

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

ChevGirl Writes In And Says “My Marriage is Suffering Because of Our Debt”

Steve Rhode — Wed, 13 Jan 2010 23:04:18 +0000

From How to Get Out of Debt

ChevGirl

“Dear Steve,

Well I am not thinking about death or anything, I am a Christian. I am just having a very difficult time with our finances. The stress is becoming unbearable. My marriage is suffering because of it.

Me and my husband work in agriculture, we do not make much and we are $55,000 in debt. I have payments to make almost every day of the month and hardly have anything left just to live. I don’t know what to do.

Should I avoid bankruptcy and try debt Consolidation?

ChevGirl”

The Answer:

Dear ChevGirl,

Not that long ago i wrote an article about getting out of debt from a Christian point of view. You can read it here.

I am so sorry that your debt is causing stress and hardship in your marriage. Those feeling seem to emerge as a byproduct of fear, loss and blame rather than as the result of anything either of you did. In a perfect world it would be much better for the two of you to sit down and have a quiet and open conversation about what you are feeling and why you think you each feel that way.

Here is what I have seen over the years of helping others and enjoying the luxury of observing these situations as a third party.

When you are up against the wall and the bills feel like they are closing in on you it is normal for people to feel tension and stress. I have found that a big component is the regret and pain that it creates in our lives because of lifestyle changes that reduced income impose.

When everything was going along great, we tend to enjoy a certain lifestyle. Maybe that is going out to eat more often, weekend trips, techno-gadget toys, clothes, or whatever. We begin to feel entitled to those luxuries and when our income can no longer support those things we begin to feel cheated and angry. Certainly we work hard and deserve to have those things, at least that is what we say to ourselves. The reality is that we are entitled to nothing, not even our next breath. Want to know more about this? Download my book about this, for free as my gift.

In a relationship, one person is typically the saver and the other one is the spender. It’s true, opposites do attract. In times of trouble the saver will blame the spender for all the troubles. That’s not fair. If that issue is not addressed in good times then throwing it up as the cause in bad times is not helpful and when it does happen, it causes relationship problems.

Money worries also cause irrational fear, depression and anxiety. They create a worry about what tomorrow will bring and real trepidation about what will happen next. That’s a whole lot of stress for one or two people to deal with. That stress tends to manifest itself as curt conversations, strange looks, tense voices, lack of intimacy, no love, no tenderness, depression, fatigue, headaches, anxiety, forgetfulness, and on and on.

All those secondary issues are just the symptoms of the underlying issue, the money stress. Until that is addressed, all these other things don’t typically get better.

So let’s look at your situation. It sounds like you are in over your head. You have three choices:

File Bankruptcy – You can contact a bankruptcy attorney through this link and find a local bankruptcy lawyer to help you to go bankrupt. Bankruptcy is a legal, logical and reasonable path for many to follow when faced with overwhelming debt and no expectation that it can be repaid as the creditors demand. The only downside here is that you need to clearly think through your personal opinions about your faith and bankruptcy to make sure you are not creating any secondary guilt if you decide that bankruptcy is the best path for you to follow.
Pay What You Can Afford – You could either pay your creditors what you can afford or try a credit counseling or debt management program to get one consolidated monthly payment and see if that is sustainable for you. Unless you can make all of the five to seven years of payments then you may be throwing good money after bad. But a credit counseling program may certainly be a reasonable holding tank for you while you decide. The debt management approach may diminish some of the collection pressure you are feeling at the moment.
Do Nothing – Doing nothing is always an option but almost never a good one. However, if you are uncertain about what to do right now, take a nothing break for a week or so, investigate your options and then decide on a course of action to follow.

As you travel on this journey I have seen many a marriage end in divorce over debt problems. Many of those relationships didn’t have to end that way if the couples had found a way to communicate and work together as a team rather than working against each other through blame and anger.

Big Hug!

@GetOutOfDebtGuy

The Answer:

My Son Has Aspergers, Autism, Anxiety, Depression and College Credit Cards. – Laura

Steve Rhode — Tue, 23 Jun 2009 19:40:20 +0000

From How to Get Out of Debt

“Dear Steve,

My son who is 27 yrs old and currently on permanant disability for aspergers autism,anxiety disorder 300 and depression, he got caugh up in getting credits cards while attending school you know the ones, credit cards for students. Any way he will never be able to work and is currently getting social security disability benefits. what action can be taken other then bankrupcy because not only can he not afford it as social security is his only income and his mental capacity cannot handle bankrupcy court, I am on disability my self and my financial means is very limited…. Thank you for any help you can give me.

Laura”

The Answer:

Dear Laura,

I think it would be beneficial for him to go bankrupt and permanently eliminate this past debt so you never have to deal with it again. The alternatives of ignoring collection attempts or fighting the debt is a much more stressful experience for both of you and his condition would not benefit from that path.

You may be able to find an attorney that will help you for free by visiting the pro-bono listing of bankruptcy attorneys.

Big Hug!

@GetOutOfDebtGuy

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