DWK

OK guys and girls I'm looking for a little advice. I am embarresed to even post it but desperate times need desperate measures.
Here is the deal. About 6 months ago I destroyed my knee in an ATV accident. To date I have spent around 19K out of pocket on surgeries and rehab. The knee is better but I am now having a hard time working the side work I used to.
The end result is I have cut my income around 20K yr. We (wife and I) still make a good living and have a nice hime and 2 nice vehicles.

I have a mountian of debt and am robbing Peter to pay Paul each month.

I am expolring several options right now to get out of this mess. I was going to take a second on my house to roll most of it into my mortgage and spead it out into something manageable. The problem there is Texas has a 80% cap on 2nds. My house value has lost about 70K in value the last year so a 2nd would only net me about 25k. I need 100k.

Another option is to file chapter 13. Another is to sell my truck (I have about 10k in equity) and use the equity to buy something else. Then have the $460 a month to help out. Sell my Rhino and have 9k or so to pay something off. This way may be just rearranging chairs on a sinking ship. IDK

The last is debt negotiation with a company. Their promises sound good but I know my credit will take a huge hit. I'm not that worried as I said I have newer cars and a nice house so I could tought it out for years until the credit is better.

Any insight or thoughts and please no bashing as am having a hard time already trying to figure out how to resolve this.

chaikwa

First of all, don't be embarrassed. I've been where you are and I'm sure there are many others here that have as well.

Secondly, don't go the debt negotiation company route. I did and regret it. What they do for you, you can do yourself without spending any more money.

Thirdly, go here; http://www.daveramsey.com/fpu/home/ and read, read, READ! I did basically what this guy preaches about, but I didn't know about him when I was going thru it. It would have been easier to have some semblance of order and a definitive direction in which to go instead of shooting from the hip and hoping it would work.

chaikwa.

cincydiesel

As Chaikwa said.. Dave Ramsey is very good at debt solutions.. You might not like what he says but it will work if you follow his instructions.. Nothing embarrasing about being in debt in todays economy. Its happening at alarming rate.. I've lost alot of money in the last year.

DWK

Well I'm looking at my extra Junk (Atvs, boat, camper, truck etc..) and if I sell off most of it I can free up 8-900 a month and that would help. I own all of those outright and would just use the $$$ to buy down some of the other stuff.
I know this sounds bad but "bad credit" for a while may be a good thing. My wife has no concept of what is spent around my house. I am as bad in many ways. I grew up very poor and once I had a really good income I have pretty much bought what I wanted (using credit of course) the last few years. I guess maybe I'm making up for the old days. lol IDK
Anyways bad credit would force us to learn to save for the stuff we want. I mean at this point I have all of the junk I need.
I have listened to Dave Ramsey but his plan requires buy in from both parties and I am not sure I can make my wife stick to anything without oustside influence.

bansh-eman

Chap 13 sucks man. Depending on how much debt you have you may qualify for Chap 7. With 13 you actually still pay a set amount (determined by the court) each month for I want to say 3 years to pay the debt to the creditors. The plus side is you get to keep most of your possessions. With 7 you lose what you claim, but you don't have to pay anything. Either way your credit is going to suffer horribly for 7 to 10 years. I filed chap 7 because of a condo I bought in San Diego and then the market crashed. For me it worked out to get rid of all the other crap that I picked up along the way. Problem is I have a BK on my report. My score is almost back to a 700 after 2 years but it is nearly impossible to get a loan still. So make sure you think your options through VERY well before you jump in with both feet.

TexasCTD

No problem on selling off your stuff if you want. But I think it's a mistake to ruin your credit to "force" you and your wife to buckle down. Just sit down with her and explain....the free spending spree is over. WE have to buckle down now and get out of debt and it's not going to be an easy road. Then do it.

..

torquefan

Good advice. Personally I would sell my truck, toys and "extras", use the proceeds to pay down the debt, and use the freed up monthly money to make extra payments on the existing debt. I would do as much as possible to avoid filing bankruptcy or getting anyone else involved.

Wolfcsm

Chapter 13 most definatley does not suck. It does however make you pay for the things you bought on credit. It takes time to get it all paid for through the court. There is a time period where you get to answer yes to the questions about bankrupsy on a credit app.

First: Stop spending on credit - now!

Second: Cut up ALL of your credit cards.

As was stated, Credit Repair companies do little more than you can alone and make money from both you and the companies you owe money to.

Consumer Credit Counseling is a very good place to start. They do help. Ther are draconian about what they expect and will cast you off if you don't play by the rules.

Chapter 13 is not easy. But when you are finished you have a clean slate to start out with and hopefully have learned a bit during the time it takes to discharge it.

One thing that would be of concern. Cerdit is an addiction, and like most addictions the first step toward living with the addiction is admitting you have the addiction. That is something both you and your wife must realize. One who buys in and one who continues to feed their addiction to credit will not work.

One last thing about Chapter 13, you will not be allowed to use any credit while your case is active. Cold turkey helps with the cerdit addiction.

You can PM me for further, less public discussions. Also, I am not a lawyer or connected with CCC.

Hal

DWK

Believe me that fight has occured more than a dozen times over the last 10 years or so. I have cut everything up etc.... Still ends up compounding.
I do have a few outs like selling off everything and that would be on my terms but it takes two........

12valve@heart

DWK, Glad you were willing to ask even if it did embarrass you a bit. Lots of people have been where you are. I'd offer two suggestions - first, look here to see if there is a Financial Peace University class in your area. I just completed the 13 week course and, while I may not agree with a few of the details, I can certainly recommend it. It may also help that Dave will be the one making the suggestions to you and your wife as a couple as opposed to you making those suggestions to your wife.

You might also go here and see about talking to one of their volunteer Money Map coaches for free. Crown Ministries is one of the sources where Dave Ramsey got some of his ideas so either place will get you started in the right direction.

As noted before, avoid the debt negotiation companies. They can't do anything that you can't do so first, stop digging that hole deeper, then start filling it back in. It won't be easy but you can do it. Bankruptcy may be forced on you by some of the creditors eventually but I'd sure try to avoid that if at all possible. Good luck with your challenge and keep asking questions.

DWK

Well I think I made one step in the right direction today. As much as I hate it I think I worked out a deal with a buddy to trade him my truck for his 06 z71 and him paying off my truck ($16K).
I really dont want to give up my truck but if I had to drive a different one the Z71 is my choice.
I will lose a $500 a month truck note this way.
Anyone need a Yamaha Rhino or Grizzly? lol Travel trailer? 30 foot flat bed? Its all for sale. No bankruptcy or credit neg for me. I'm going to get out of this on my own, one way or another.

wannadiesel

Sounds like you are making good choices.

Make sure the deal with your buddy is in writing and that the truck note comes out of your name immediately.

D2 Cat

I'd suggest contacting the hospital/dr's you owe. (Do you know anyone who works at a hospital in an administrative position?) There are limitations the hospital can require of you. Why not find out what they are and come to an agreement to pay at a rate you can live with? If you agree to pay a minimum fee and stick to it the hospital will be obligated to the agreement.

Do the same with other outstanding bills. Personal negotiation will get results and does not cost additional funds. Most problems can be minimized by commumication.

Always negotiate before you litigate.

roughstock

Dave Ramsey is the man. Do what he says.

matthopp

I was in some bad CC debt due to a pretty crappy deal (everyone has a crappy situation); you just need to determine a long term plan. I was able to live modest & comfortable, but without extras for several years getting by. I knew my financial situation would improve over time and it did. I utilized Daves “snowball” idea and over the course of one year, I paid down nearly $30K in CC debt. For the previous three, I paid the minimums and “stayed just above the water line.” I did take advantage of the zero or low APR deals different CC companies had to keep things somewhat under control. I didn’t have the ATV’s my friends had and wasn’t going on vegas trips 2-3 times a year, but I was staying afloat.

I am now completely debt free (unbelievably great feeling) and have the ability to have some fun things, but I think I am too scared to spend on fun things and will concentrate on building a nice emergency fund and investing, especially in these times. I haven’t had a truck note in over 2 years and can’t imagine having one now. The funny thing is I bought my truck new right out of school and the payment didn’t seem to be an issue; I currently make well over twice as much as I did then, and I cannot imagine having a $500/mo note!

I pondered bankruptcy but decided that I had gotten myself into the situation so I will get out of it. Looking back, I am glad I paid it off the way I did. However, a friend recently filed for bankruptcy (not sure 7 or 13) and it seems like his CC was erased; not sure what to think of that as it seems the easy way out.

I believe in responsibility and self accountability, something that appears to have been lost in these times.

And FWIW, I am 29.