Financial Problems

Updated on April 27, 2012
C.A. asks from Wichita, KS
25 answers

My husbands grandma suggested that I file bankruptcy. I am hesitant because of the major affect on your credit. One of my other friends did debt consolidation so maybe that's an option? Just hoping to get better advice! The house and car are in my husbands name. 2nd job is not an option as I already work 17-18 hrs a day. State policy for daycare is that you are not to work more then 18 hrs in a 24 hr period. Could get more kids but they have to leave by the time my 2nd shift kids get here or I would be over ratio. And most parents aren't able to pick their kids up at 3 in the afternoon.

1)I am facing some issues with my ex fiance's mom. She is suing me for rent and utilities during the time I lived in a house with her son. The grandma had bought the trailer and the mom paid the lot fee and had ALL the utilities were in her name going to HER house and she paid them, never told me how much anything was. I paid all my bills I had prior to moving in. My car, insurance, phone, groceries for both of us, plus he stole money from me ALL THE TIME for drugs etc. Not to mention her son was and pretty sure he still is unemployed(his cousin fired him TWICE) abusive(had a restraining order), and living off his family while doing drugs(he's a real winner, glad I got away when I did.) He didn't pay anything. She took me to court in Feb of 07 and even though I hadn't signed ANYTHING saying I'd pay these "bills" she won the case and I now owe her over $2,500. The whole thing is a mess and because I missed a couple payments to her lawyer I have to go to court again in June. Would like to file bankruptcy before court so that she doesn't get anymore money.

2)Another problem is that I took 3 classes online and am now owing $3,000 +. The school and/or financial aid are wanting me to sign a forbearance to postpone payments.

3)And last but not least I used to have a car and when I bought it, had a down payment loan(think I got suckered into that, 18 buying a car on my own.....you do the math) Anyway what was an $800 loan is now $2000 +.

Yes I know this is pathetic but I also know there are others out there in worse situations. So here is my question, do I call a lawyer.... what does it cost..... and is it worth it in the long run?

What can I do next?

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So What Happened?

And of course today my husband was let go from his job. They said he should be able to come back in a couple months.

More Answers

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A.R.

answers from Springfield on

Ok, I read the other responses before replying so I wouldn't be redundant. First off I don't think many read your post because they all insisted you get another child for your childcare business and i don't know where they got that you wanted another baby? I too have been doing in home childcare and this is extremely difficult. I know you know this. I do agree that you are now married and this debt should not just be on your shoulders. Is it possible for your husband to get a second job? My background is that I just filed bankruptcy Pro Se. This means I did it with out a lawyer. Sounds scary but with God's help I did it. Thank the Lord for my college education it really helped. Anyway, your total bills are not that high. I would first look at your budget & find out where your money is going. I mean every penny. Once you have established this determine your income and see what the difference or variance between the two is. Are you negative or do you have any extra. Ask yourself what you can eliminate. Personally, there is nothing that I could cut out. We were down to bare bones necessities(or less). I was making payments but it was not enough to cover even the interest so my balances would just keep increasing. Then I was sued by a financial company. If they garnished my husband's wages we would have been homeless. This is why I filed. The basic filing fee for chapter 7 is $300.00. I applied to have this waived because our income was so low. You can also make up to four payments so it is easier to pay. YOu also have to take some credit counselling classes. This will run you about $120. Anything over that is just for the lawyer and his work. It is a lot of work. The starting rate is around $1800. Often times this will include the filing fee. So if you are going to use a lawyer it would not be worth it as your bills are not much more. Your best bet would be to pay it off slowly. If you are upside down and your husband won't help (I won't give advice here) then you could file yourself or have someone help you. I am thinking of helping some friends out myself. When I went to court over my finances there were so many people there and no one could afford representation. It was really sad. My case was the ONLY one dismissed because I quickly filed bankruptcy prior to my case. Sorry, this is so long. I have no problem paying what I owe but creditors don't want you to pay off your loans. They want you to pay on them for life and they manipulate you into getting more loans to "help" your situation. If you do decide to file I would be willing to show you how to get started. It is time consuming but very possible. God bless.
A.

1 mom found this helpful

S.L.

answers from Kansas City on

C.,
I would be in heaven if I had those debts to pay. I am around 50,000 in debt and my husband also has the house and van payments in his name, though I pay them. He helps, don't get me wrong. But he puts the lion share of his money towards fixing up the house which needs it, health insurance premiums, taxes, and our dismal retirement which we are about 10 years behind on. So I pay everything else with him chipping when he can.

I take a full shift days, nights and weekends. It's not the best time for daycare. I've had a lot of parents lose jobs. But if you keep busy putting the word out, meeting people, doing the best job you can, asking your parents for referrals, watching craigslist, handing out cards etc., you'll get and keep enough kids to pay those loans off.

The bottom line is, you accepted the responsibility for the car and student loans and they are not that big. The X- boyfriend mom sucks. But I suppose the judge felt he was doing the right thing.

Is there a possibility that you could file to appeal the original decision? Maybe the judge would feel differently now if he is still unemployed after all this time.

Suzi

1 mom found this helpful

M.B.

answers from St. Louis on

I dont think you have enough to file for bankruptcy. You could try, but I think you need more debt. Not that you should get anymore. Unfortunately, the rent thing, is your responsibility. No matter how much of a loser your ex boyfriend is, his mother shouldnt have to pay for you or him to live rent free. Im sure she didnt agree to you not paying her, thats why the courts ruled in her favor. I have been a landlord, lived next door to our tenants and had to sit there and watch them lay on their butts for three months (thats how long it took them to get evicted) while I worked my butt off to pay their bills. Not fair!!
I suggest, you get another job and start paying this stuff off.

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S.B.

answers from Kansas City on

You need to consult a bankruptcy lawyer. There are different kinds of bankruptcy...one that helps you reorganize and pay your debts. You have been given some wrong information below. You can file separately from your spouse and his credit in not in jeopardy. Also, a reputable attorney will work with you on fees and they don't have to be paid up front. The key is to find a good attorney. I work at a law firm; you can call the KC Bar Association @ ###-###-####...they have a lawyer referral service. Truly, bankruptcy should be your last resort. You will not be able to get credit for about 10 years, and that's not easy in our society today. Your spouse can get credit in his own name and list you as an "authorized buyer", but then you have no credit established and are at his mercy. Again, consult an attorney; they should be able to advise you of the best road to take. Your amount is not that much and you're young. You can recover from this! My husband brought tons of debt to our marriage, and with the help of a good attorney, I walked him successfully through the whole process. Best of luck.

1 mom found this helpful

S.H.

answers from Kansas City on

Call this 1-800-523-3097 and leave your name, number and the best time to call you back. We show you how to make extra money and/or replace you income.

C.,
I would start paying off my loans a little at a time. First the EX MOM, to get her out of my life. You should not file bankruptcy unless you really need to. Call all the loans and tell them you would like to pay off your loans but you just do not have it right now. Ask them to change your payment and your rates. You might have to talk to a supervisor.Tell them you can pay this amount $$. Then when you get extra money you can pay more money. Some time they will work with you just to get there money. Some time they will take less on the loan if you ask.

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R.D.

answers from Kansas City on

You said husband. That means you two would need to file together. When he married you, he married your debt as well. There are implications both ways (to file or not to file). Here are some things to consider before making your decision:

An attorney will reqiure fees to be paid BEFORE bankruptcy claim is filed, to the tune of $2000-$5000. This is close to the amount of debt in question. If you file, most past bills would be put on hold. Collection attempts must then cease (you can refer all calls to your attorney). If either one of you have any assets (car, house, property, burial plots, investments, bank accounts, etc.), it could be siezed to 'settle the claims' to your debts. Depending on which chapter you file, you may be able to pay them off without any more interest as an option. Consumer credit bureaus/agencies will help with that - for free. Make sure they do not charge. Google it.

I would appeal and see if you could get the decision reversed regarding your ex's mom. You said the bills were in her name, but did she pay them or did you? If you have cancelled checks or money order receipts or anything else proving the monies to pay the bills came from you, then you have a case.

No matter if you took classes on campus or online, school debts (and IRS debts) WILL NOT GO AWAY! They will ALWAYS get their money. School loans and tuition NEED to be paid before further damage to your credit. If you can't pay minimum payments, CONTACT them, sign an extention, do something. This is one (or two, if you have any IRS money past due) that won't get wiped away if you are trying to start over with a 'clean slate.'

Talk to where you got the car. Ask for the owner. See if s/he will work with you. I am sure they would rather get the $800 you admit to owing rather than nothing if you do file. Tell them your situation and ask for a new contract. Be willing to pay something up front as a good faith gesture.

Weigh the pros and cons. Is making a point to your ex's mom worth the hassle? Are you willing to have your credit report have a bankruptcy on it? Is your husband? Do you plan to make any purchases requiring credit in the near future (7-10 years) - including home or auto? Many companies are doing credit checks as part of the hiring process any more, so are you or your husband going to be needing to look for a job? Can you be sure in this economy?

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M.T.

answers from St. Louis on

I wonder if it would cost anything to make an appointment with a lawyer to get some advice. Could call Clear Point Financial Solutions at 888-656-2227, who give counseling and have a financial program set up free. There program is is to stop any legal action, stop accruing interest, set up lowering the balance somewhat with creditors (I think) and set up a monthly lower, affordable payment to them in one lump sum and they disburse the funds as an alternative to bankruptcy. I have used them years ago and was happy with that service. I have never really looked into bankruptcy. Maybe call legal aide? 1-800-999-0249.

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J.B.

answers from St. Louis on

Wow you don't really have alot of debt. Just work at getting it paid off. My husband and I have over $250,000 in debt and most is medical. We are slowly chipping away at it and I am a stay at home mom doing home daycare as well as raising my 2 daughter with special needs. If I can do this without filing bankruptcy, you can too.

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M.G.

answers from Kansas City on

I agree with Tracy N. DO NOT file for bankruptcy! You debt may seem overwhelming but it is not really that bad. Check out David Ramsey. He is a wonderful financial advisor!! You can do this a little at a time and I think if the court sees you paying something towards your debt to you ex's mom they will be understanding. There are so many of us that can relate to the emotional part of this but just relax and do what you can. That all you can do. Good Luck and you are in my prayers!

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V.F.

answers from Topeka on

If your husband and you are married and I think you are then I do not think one can file bankruptcy without the other. They would consider his income as being able to help pay these debts. But do check with a bankruptcy attorney. Most don't charge for an initial visit.

Other thoughts. I don't see how you can owe on a car you no longer own. I would call all three of the creditors to see how much less they would take to pay off in full. Tell them you may have to file bankruptcy if you can't get debt reduced. I would think for the car they would take the original $800. Also like someone else said did the court make your ex pay his mother 1/2 the money. If not then that should be brought up in court. Student loan like others mentioned will not be wiped out in bankruptcy no matter what. What kind of equity do you have in your home? If you can get all three to reduce the amount owed to under $5,000 maybe you could take out an equity loan to pay it off in full. Just some thoughts. Good luck.

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H.H.

answers from Kansas City on

I would not file on this amount. You will have lawyer fees to pay and your credit will show this for 10 years so it will be hard to purchase a house or car later on and yes there are car dealers out there that will sell you a car after you filed bankruptcy but the interest rates are outrageous like at 19 or 20% so you won't want to go that route either. Your debt is not that much and you can get extensions on your student loans. If it were me I would see if I could get a loan at the bank for the amount you owe on the court issues from your ex and pay the car off. The sooner you can pay off the ex the happier you will be to not have to deal with them anymore. Maybe your husband has good enough credit for a loan like that. I know we paid off a high interest car loan with the bank and got a loan at 5%. After we paid the car off we now use it for collateral to get personal loans to pay off our credit card debts at the 5% interest rate for the cards that raised our interest rates to 19% for no reason. We are working at chunking our 38,000.00 credit card/auto debts away. It is a very slow process but it will be worth it when we are free of the burden of debt someday and don't think bankruptcy is a good option even with all our debt. I have seen other people file and their lives seem worse than it was before they filed. Hard to find good jobs and even hard to rent a place to live with bad credit.

Credit Consumer Counseling also ruins your credit even though they tell you it doesn't. I had a friend that went through that and we bought a car at the same car dealer at the same time, her interest rate was 24% and ours was a lot less. We asked them why and they said because they were on the credit consumer counseling and ruins your credit rating as bad or worse than bankruptcy because on your credit it shows that you don't pay your debts because that debt is still on your credit and they only pay one of those debts at a time while the others are left unpaid until that first one is paid off, then they pay on the 2nd one but all that time those other debts are showing up on your credit report as being unpaid so your minimum payments aren't even covered. It works for people that already have their credit ruined but not well for those that had decent credit before they filed for the service. Your best bet is to pick the one thing you want paid off first and put more on that one each month and pay minimum payments on the others but work on chunking one at a time off, then when you get that first item paid off take that amount you were paying for the one you just paid off and put on the next one along with that minumum payment that you were initially paying. This plan works and with your debt being such a small amount you will be surprised at how fast you can get it paid off. I don't know how much you can pay extra but if you can pay 50-100.00 extra you will see a big difference and probably pay them off in less than 3 years. Pick the one with the highest interest rate first or you might want to pick the debt to your ex-MIL just to get that one past you then work on the next one.

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L.B.

answers from St. Louis on

Sounds like a mess. I am under the thinking of if you made the debt - you should be responsible for it. (Except unusuall circumstances like disabled due to illness or accident) I know it won't be easy but I would get more kids to watch or a 2nd job and I would quit trying for baby #2 until your out from under this burden. There is no way you will get to take care of these debts before June anyway. And as far as I know "financial aid" cannot be disposed of unless you pay it off.

And are you "married"? Im not sure one spouse can file for bankrupsty while the other keeps their good credit. Does you husband complain about your debts? Is he unwilling to help you take care of them. It's $8000 that's not a huge amount.

Praying for you,
L.

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K.T.

answers from Kansas City on

I agree with the others about working through your debt. These are choices that you made. When you file bankruptcy, someone has to pay for the choices you made (just not you). I would look at trying to sue your ex-fiance in small claims court for his share of the 2500 judgement againist you. It is debt you incurred together and I believe that makes him liable as well. You can do small claims court for a minimal fee.
Also, I noticed that you said you were trying for number 2. Maybe if things are so bad finacially that you are considering trying for bankruptcy this wouldn't be the best time to go for number 2.
*drops her two cents*

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J.C.

answers from Kansas City on

I agree with all the others who said that you need to just chip away at your debt, rather than file bankruptcy. Don't let it overwhelm you. Just come up with a plan to make the biggest payments you can make. It sounds like you've made some bad decisions in the past-- it's time to turn that around and start making good ones. It's not your ex's (or his family's) fault that you are in this situation. You will feel much better about all of it when YOU decide to take control of this situation.

It's time to look at ALL of your finances and see where you can cut costs. (I know cable TV SEEMS like a necessity, but it's not-- check out the Redbox). Come up with a budget and stick to it. You will feel really powerful when you get a realistic look at your finances and make decisions about how you spend (and save!) your money. Then stick to your plan! You will be setting your son up for success-- Taking control of your money will give him a more secure and happy home and a more confident mom. Good luck with everything.

M.D.

answers from Indianapolis on

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T.M.

answers from Kansas City on

Just a thought, did your ex pay anything toward the bills? He should be responsible for half, can you sue him? At least that might lessen what you owe his mom.

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K.O.

answers from Wichita on

I feel sorry for your predicament; however, do NOT try for #2 until you get out of this mess. IF you feel that you can afford baby #2, then you can surely pay off the debt. Babies are far more expensive. Plus, having a baby under such stress is not fair to your body or to the new developing life.
My husband and I had a significant debt to pay off after our twins were born (more than yours)and I did not work. It takes discipline (no meals out, simple meals at home, "date night" at home with a movie and popcorn, etc.), but it can be done. We were debt free (and still are)in only 18 months! And that included one meal out a month! Bite the bullet, cut your budget, add more children to daycare, get a second job, etc. In other words, do whatever it takes to get debt free. Then, have a lot of fun trying for baby #2!
Best of luck! I'll pray for you!

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C.W.

answers from Kansas City on

C.,

I know soooo many people that are in your same shoes! Good News is: there IS something you can do with just a phone call to the companies with which you still have debt! It IS a simpler solution than anything else I have heard of before or read here so far.

(A friend of ours did all of this and he was able to pay off all of his debt!! And: HE was going to file bankruptcy too!)

HERE IS THE PROCESS:
Call your credit companies and ask them for the “HARDSHIP DEPARTMENT” (or whatever THEIR company calls it...)
Once connected, let them know that you are UNABLE to make your payments any longer. They will take some “Hardship Application info’ over the phone from you. This part is NOT hard as they are not requesting exact numbers like banks, school loan places and the like. :o)

Anyhow what will happen is the Hardship Department can approve to LOWER your INTEREST RATE!!!!!!!!!!! They ALSO will LOWER your PAYMENT amounts!!
Our friend’s minimum payments went from $480 down to $120 per month, for 12 months.
His other payments went from $600 down to $210 per month, for 12 months.
In total, his payments were reduced from almost $1100 per month down to $330.
They also LOWERED his interest rate from 18% down to 6%.
At the end of the 12 months, the companies will reevaluate his progress and his financial situation and can continue it for as long as needed. :o)
PLUS: they also STOPPED all of the late charges and over credit-line charges!! (Major PLUS!!)

The ONLY downside he felt, at first, was they closed his cards. :>(
Yet, since he could pay less, but still PAY OFF MORE, he said he didn’t even miss having a card!!! The lower payments gave him the opportunity to just pay CASH for things instead of adding to his debt. :O)

He also followed some information from a class he took from www.fpu.com (This is the website for Financial Peace University, that another of your Mama-Source Mom’s mentioned Dave Ramsey- well Dave is the Author of FPU. According to our friend, Dave’s goal in life is to “Make the United States Debt-Free” or something like that. Anyhow this Dave guy had to file bankruptcy many years ago and he is trying to get the United States so that no one ever has to file bankruptcy again.[or something like that]. Dave’s site sure helped our friend. He sings Dave’s praises each chance he gets because Dave made a HUGE difference in his life.)

Our friend was sooooooo relieved after he called all of his companies. AND he said each one of them was SO nice to him when he called.

Well C., I hope this info is helpful to you.

Blessings & Much Joy,
C. W.
www.TeamOfHearts.com

P.S. I too run an in home day care: Heart To Heart Christian Day Care. I love the children and they bring me smiles each day. I am soooo blessed that their parents share them with me each day. :o) I am sure you can relate!

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T.N.

answers from Kansas City on

Hi C.. I can tell you're really stressing out about this, and I understand. Debt is scary and kinda overwhelming. Hopefully you can step back and take a couple deep breaths and tackle this anew.

I have a couple thoughts:

You didn't mention anything about your income, usually debt problems are in direct proportion to income problems - so try thinking about what you can do to increase your income. Get creative, think short term. Part time job, yard sales, etc.

You talk about you and your debt as though it's separate from your husband... he married you. It's now "our debt". You'll get a lot further if you're working on it together!

And the last, I'm amazed wasn't mentioned by anyone else yet - Dave Ramsey (www.daveramsey.com) He hosts a radio show on 710am KCMO from 11-2pm every day. You'll hear people just like you (and a lot worse off) being given sound financial advice and encouragement. I hope you'll check him out - and check his book out at the library too if you can. "Total Money Makeover" Really good stuff.

Hang in there. Try not to panic. Try to conquer!!

T.

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K.B.

answers from Wichita on

Good Morning C., yes dear it is a mess but a relatively small one considering. Budgets are very hard but doable. We just this month paid off a credit card that had really grown. I missed one payment and the Interest rate went from 7.95% to 17.95% in one month. We always paid way more then the minimum each month. Didn't make any difference.

Bankruptcy would save you now, but it would take more then 7 yrs for you to be free of it. No loans of any kind until you were close to the expiring date. To show good faith you take out a small loan and pay it back immediately. Daughter in law filed B before marriage and this was what she had to go through. When you go to buy a home you have to go through all of that again, it's on the credit report.

If at all possible C., start paying a little bit more even $5 or $10.00 extra on your outstanding loans etc. To the lawyer, student loan's, car note. Our daughter in law also had student loans, she worked with them had them postponed also until she could begin repaying them. I think it was like a year of postponement. They are paid in full now.

If you work on it C. it is doable. I know times are very hard for everyone now, diligence,honesty,good faith goes along way.

If your really worried about the ex's mom and court in June you can call Legal Aide in Wichita. They usually charge by what you can afford. Some financial advisers give free consults. In the mean time try to make a good faith effort to pay a little extra on what you owe. My hubby would of been Thrilled to of owed 10.000.00 (Rounded up from your +'s with interest) He is close to retirement, and doing things this way put us in tight places, but we made it through with only a few more gray hairs....lol

God Bless you and yours C., we should get together for a play date sometime. I take the gr son's to Towne East Mall and they play in the play area at the food court. Have met Mama Lori S there and we had a blast. So did the Boys...lol

K. Nana of 5

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E.B.

answers from Houston on

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J.G.

answers from St. Louis on

I am with all the people that say chip away at it debt. It may not seem like it now but it is too small an amount to totally destroy your credit over. If I remember correctly student loans stay through bankruptcy as well. If your income is low enough you may qualify for a pell grant to go back to school. Grants do not have to be paid back and while you are in school you do not have to pay back the student loans.

As to the car, call the company that holds the loan and explain the situation. They may modify the terms so that you can pay it back easier. They would lose far more if you file for bankruptcy.

Exes mommy, have you considered poison. Just kidding.

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K.S.

answers from Columbia on

I don't think file bankruptcy is your best option. You should really try to consolidate your loans and spend less on anything else. I know this may be harsh to say, esp since I don't know you, but are you sure trying right now for another baby is the right timing?

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T.K.

answers from Springfield on

Add me to the list of others who advise against bankruptcy. My first husband and I filed many years ago. Long story but we were facing being sued for tens of thousands of dollars and our income wasn't that great. The attorney told us we wouldn't have a lot of credit problems because you can only file bankruptcy every 7 years (at that time, anyway). We probably made the right decision in our case, but we did feel we were misled by the lawyer. We had TONS of trouble getting credit after that. We weren't able to buy a house, get an auto loan, or even a department store credit card for many years. Also, as much as you want to have a second baby, you would be wise to get the debt cleared up first. Best of luck and may God bless you!

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M.M.

answers from St. Louis on

I work in financial aid and your student loan cannot be discharged in bancruptcy file for an econcomic hardship if you qualify the government will pay the interest on any subsidized portion of the loan during this period. If you do not qualify for the deferment file a forebearance it will postpone payment for a year while you get your other debt under control.

Do not let the loan go into default 9 months past due it will hurt your credit and ability to get aid to return to school.

Try a non for profit debt counselor for help.

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