Have been an accountant for 40 years. A single mom of two boys who had mental health issues which translated to criminal issues and all the expenses meant I saved nothing. I used credit cards to start and keep a business afloat. It folded a couple of years ago. I took a new job which promised many perks and a nice way to work into my late 70’s but they waited until I bought a HUD home (with the 8K Obama bonus) to “go in a different direction” and laid me off. I have been unemployed for 18 months now and because of my age (61) and the distance to a major city I have had only two interviews. During this time I pared down my outgo to food, electricity, water,mortgage,car insurance (required) house insurance,cell phone, and two car payments. (one I am upside down on and owe about $3800 on the other. I told several CC providers I would pay when I could and closed most accounts. They called me for months and months but I had sold everything I could find, cleared out my 401K, my life insurance and a small scottrade account. I have written a book that was just turned down by a publisher and my on-line efforts have yielded nothing so far.
I was sued today by Capital One. They want $5500 plus all fees, etc. I have really been trying to avoid filing bankruptcy but this puts the squeeze on me. I have 30 days to court appearance. Since I owe about $40K total to credit cards at this point, own nothing, have no equity in my home (upside down by 30K there) and have no job and will run out of unemployment in about two months. I now owe all of my October “must pay” expenses and have about $800 to my name.
Any suggestions other than doing a “Thelma and Louise”? My family and friends are tapped out.
Thanks for listening.
It is said that the role of a consultant is the person that gets paid to tell you what time it is by borrowing your own watch. Meaning, the answer is often right in front of you. You may see it but not want to see it, if you know what I mean. As an accountant you may not want to see the clarity that measuring your dollars and cents provides.
In this case the answer is dead obvious and I wish you had come to me before you had raided your retirement accounts. It is of little comfort now but we could have protected those.
Borrowing from friends and family is a dead end route as well. The problem hinges not on your current obligations, but on your future income. Without any replacement income, making payments is akin to throwing money away.
All that I’ve said above is bad news and is geared more for other readers to learn those lessons, you’ve already painfully learned them probably.
Now I need to get you focused on the real issue here, the income. Money problems are never about the money. They are the symptom of underlying issues and the debt is the byproduct of those issues. In your case the loss of the income is what we need to focus on at the moment. That’s the real issue, not Capital One.
You have a few choices when it come to the income issue.
- You could move to where jobs are.
- You could take any job, even a much lower paying one.
- You could apply at every temp agency around and take every assignment they can give you.
Along with the income issue that we need to change there is another issue which we can’t change and that’s your age. I mention it because your income earning years are diminishing and from this very moment forward I need for you to think about saving for retirement. Your physical life will outlive your income life and we absolutely must get you focused on saving for that event which is coming no matter how much we wish otherwise.
My opinion, based on what you’ve shared, is that you need to focus all your efforts on replacing income and you could actually stop paying your credit cards, one of the car payments and mortgage payment. This will help what’s left a little bit longer. You also don’t need to worry a whole lot about being sued by Capital One or the other cards. You have no money to pay so you instantly lose anyway.
Once you can get income coming back in again then we can clean up the whole mess with bankruptcy. Bankruptcy will kill the judgments, the car repossession and mortgage default. You might actually lose the home but you are upside down on it now and can’t afford it. They won’t take your house for six months to years so you’ll get to stay there rent free. I know people that have remained in their homes for years now and have not made a mortgage payment.
Now is the time to focus on survival and if a friend or family member can help, ask them for help to pay the electric bill, not the mortgage. You also sound like you qualify for government benefits so if you have not done so already apply for food stamps (now called SNAP), medicaid, and visit your local food pantry.
Swallowing your pride is just flat out tastier than being homeless and hungry.
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.