My husband is a boilermaker which is a feast for famine type of job. By the time we get caught up on basic utilities and rent and car payments, his job ends and if we have been able to save anything its used within the first month to survive we have 4 children and the grocery bill by it self is more than our house payment was before we were foreclosed on a year and a half ago. I used
to work and made great money but the company I worked for closed its doors in our area. Now I can not get a job to earn enought to pay for childcare and the state considers his employment when working to make to much for assistance in childcare. So I am a stay at home mom. We
have about 35000. in debt and another 15000. in debt to family members. His total income was 58000. last year. The IRS has been keeping our refund since 2003 ‘s for back taxes and we now owe the state of WV aprox. 10000. in back taxes. When he is working we can afford to pay for bankrupticy and we qualify for a pay back schedule but when he is laid off we qualify for a bankruptcy but can’t afford to pay for it. We have had a foreclosure and 2 repos in the last 2 years. If we set up a repay schedule we can not afford the payments when he is laid off. No matter what we do there is no out.
I asked my friend Mike Killian to answer your question for you. I wanted to make sure you got an answer as quickly as possible as I’m a bit backed up at the moment. I’ll be watching the comments on this question and be around to help if you need me.
I am going to answer your question in two fashions. The first answers your question from a professional standpoint and is the actual solution. I will then follow up with the options you have available that is more in tune with what I think you are seeking… but not the answer to your question.
The real answer to your dilemma is a very solid budget. I know you are in a financial straight jacket right now but I guarantee once you are out of the mess you are in, you will be right back into it without an exceptional budget. Steve Rhode offered an article on this subject called Suggestions for Budgeting Tools. Additionally I usually don’t offer my own web sites in these responses but this may be an exception. You might check out What Constitutes a Good Budget?
In your budgeting efforts two things will be essential. You must capture ALL expenses and you must plan annually and divide by 12 or quarterly and divide by 3. You must insure you have a contingency fund to make up for the lean times and you must hold back spending in the good periods to avoid famine at other times.
Having said all that, now you face the current moment. It is imperative to take an action. Even the wrong action can be better than no action as your problem will not go away. In fact, it will simply worsen.
The first thing is contacting the creditor and trying to lower interest or repayment structure. This may be a mute action but who knows. It might work. The second option is working through a debt counselor to try to get that interest down and working out a debt management repayment program. Please check with Better Business Bureau and anyone familiar with a local office before making any commitment to them. Simply locate a debt counselor in the yellow pages of a nearby major metropolitan area. The third option is debt negotiation. With this option you or a professional debt negotiator offer less than what you owe…. Say 50%. That sounds good on the surface but has some drawbacks. Debt negotiation usually requires a lump sum payment and completely destroys your credit. Additionally any debt forgiven above $600 will be taxable by the IRS as added income.
The final solution is bankruptcy and I realize you have talked about it but have you actually spoken to a bankruptcy attorney. The initial consultation is usually free and at least then you would be armed with proper knowledge of the facts so that you can make a decision. Your taxes will not be forgiven but you may find a great deal of breathing space from which to start anew.
The final step is to decide on an action and when you do, embrace that action at warp speed. This means both of you. Decide and act! In the immortal words of Nike Shoes, “Just do it!”