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credit counseling?

post #1 of 14
Thread Starter 
We got turned down for the debt consolidation loan thing I tried to explain how extremely hard it is anymore for us .......... I pay late fees on our mortgage (just late, it doesnot go on our credit), cant pay our electric/water/cable on time ever, im 2 months passed due on our homeowner's association, blah, blah blah. His next suggestion is the credit counseling thing thru their company. Honestly, IMO, right now, it is in our better interest. I cannot live like this anymore.......... its so damned depressing. So, I called hubby and he said absolutely not, to go back to lendingtree.com. I have heard bad things about credit counseling.... I just wish my husband would look at other things. He doenst see how it affects us, since he never pays the bills, he doesnt see the account half the time.
post #2 of 14
I am not very familiar with credit counceling and the affects it can have so I won't give any advice on that aspect. But when I worked for the credit union one of my job titles was financial advisor so I can offer assistance when it comes to that.

I am not trying to sound derogatory so please don't take it as such. But the only way to catch up on bills, repair credit, and get ahead of the game is the following: either you have to increase your income, or decrease your bills.

Now, I don't know your jobs, but obviously if you could be making more you probably would be. So I'll take it from the other aspect. You need to cut things out that aren't necessary such as cell phones, cable, car payments ( I know you need a car, but driving a brand new one w/ a high payment can be cut way down by getting a used one w/ a much lower payment ), frivoulous credit cards, store charges. Once you eliminate some of this it should make your bills more manageable so you can make timely payments of things like your mortgage. Its so important to get your debt to income ratio in perspective. So many people live way above their means...they are trying to keep up with the Jones' so to speak.

The best advice I can give you is to sit down and make a strict budget and STICK TO IT. That means giving up take out if necessary, or giving up your cable. In the end you'll be happy.
post #3 of 14
Thread Starter 
No, I dont take it as deragatory. Do you think I am happy with that car? No. We made a *#(#( huge mistake on that one, and now my only choice is to sell that car. Even if I do, I will still loose a couple of thousand dollars.
We have been sticking to a tight budget, and it's still not working. I lowered our cell phone bill, too.
post #4 of 14
Pull out all the bills and the pay stubs. Show him exactly where you stand. Pack lunches, have a yard sale, SELL the CAR, hold a car wash with your friends... ok that may be going a little too far. This is all I can think of for now. Make sure hubby understands where you stand. If you are "crafty" maybe you can sell stuff at a flea market?!? You can also shop at surplus food stores, fruit and veggie stands, and discount bakeries, so the groceries are cheaper.
My very best wishes and big (((HUGS)))
post #5 of 14
Thread Starter 
Groceries arent an issue with me or him .......... The only time we get money from the atm is for food @ work. Other than that, we have been saving money there. I added up our paystubs plus our bills (monthly ones, not just the debt) and it almost equals out to what we make.
post #6 of 14
I have to agree with Daniela. It is time for some drastic measures. You need to cut out all the perks. Cell phones, cable, eating out, expensive cars. The debt consolidation thing just makes it more attractive to spend the excess on other stuff. I have heard that credit counseling can damage your credit record, but it sounds from all the stuuf I've read over the months, Tigger, that you guys are down that road anyway. You'd be amazed at the kind of stuff that you have convinced yourselves you can't live without.. It's really time for you guys to get serious about this stuff.
post #7 of 14
Went through credit counseling, with my ex. We were getting out of the hole OK, until he ran off and quit making the payments.

You're OK, if you go through a reputable company. We used Genus Credit Management. They got the finance and late charges stopped on most of the credit cards. On six cards, our payment was $240/month but, we doubled that. Genus charged us a $4/month "contribution".

This is better than paying a high-interest loan and your credit report shows that payments are current.
post #8 of 14

Deb25 is soooo right. It is amazing what we convince ourselves we can't live without. I know a very big money saver is bringing your lunch to work instead of buying. You can save 25 bucks a week, that is 100 a month! A lot!!

Also, lowering your cell bill is not the same as cancelling it. If its "lower" that means you still are paying something. Same as cable, drop it completely until you catch up. Same w/ internet access. Go to the library, its usually free there. Eating out and doing frivolous things just has to stop until you get on your feet, then you slowly add stuff back in to the point where you are comfortable.

There was a time many years ago that we had a tight budget, but because we followed our it to a tee we were able to overcome it quickly and start getting ahead of the game. I hope the same for you.
post #9 of 14
Tigger, I feel for you, and I know exactly what you are going through. If you decide to go through credit counceling, be sure to really research the company you are using. Many of them are "not-for-profit" but are linked up with a for profit loan company (the once you make 6 months of payments you can get a loan type thing, only they will charge you a lot of interest). Also, it can look bad on the credit report. Some creditors look at it as you couldn't handle your problems yourself. Another thing is that if you are current on your credit cards many of them won't help you. You have to be at least 2 months behind, and credit cards are the ONLY thing they will work with. Your utility bills, mortgage and other monthly incurred bills won't be affected at all.

What it takes to really get yourself out of that situation is to make changes to your lifestyle. I went through bankruptcy, got rid of $50,000 in debt (I was REALLY BAD!), and we are still in a hand-to-mouth existence. Mostly because I am trying to pay everything on a single income, but that's a different thread. We are making it work as best we can, even with much less income. We don't eat out, except maybe once a month. We don't do fast food. I work close enough to home to go home for lunch, but if I didn't I would be brown bagging it. Just cutting out eating out and fast food has saved us literally hundreds per month. We pretty much shop only for things we really need. We don't buy frivolous things anymore - both of us gave up our collecting (Star Wars for him, Barbies for me, DVDs for both). We can actually go to a mall now and not come out spending $100 or more. We can't, and we both know it.

It is tough to say no to things you want and want to do, but you have to make the change if you ever want to get out of this cycle.
post #10 of 14
Its all about life style change. You can't live above your means and expect to be ahead of the game financially. You have to live the lifestyle that your income allows, and if you do that you will not have problems. Everyone has their "bracket" and you just have to accept it and respect it.
post #11 of 14
You've gotten good advice from other people here, but I just wanted to tell you that there is light at the end of the tunnel, and it's amazing when you get there.

My husband and I went through several months of unemployment twice, once about 18 months ago and another about 6 years ago right after university. The first one was tough with zero income for about 10 months - we went into debt in a big way even with drastic lifestyle cutbacks and help from my parents. The second was even tougher because we had just bought a house and were laid off 4 months apart from jobs that had given us a combined salary of almost $100K, so we had a fairly swanky lifestyle compared to many. After the severance ran out, our income was less than 25% of what it had been, but we learned to live on that. We sold our house and bought an older "fixer upper" for less money, so we paid off a bunch of our debts that way, but were still not quite making ends meet. Then my hubby got a job and my small business picked up, but we still live mostly the same, but with a lot left over at the end of the month. That is the light at the end of the tunnel - having to learn how to live frugally is an excellent lesson for the rest of your life.

A great book with lots of ideas on how to save money and develop a healthy attitude towards finances is "Don't Worry, Make Money" by Richard Carlsen (Carlson?), the guy who writes the "don't sweat the small stuff" series. It's mostly practical advice, but not the traditional banker stuff. A lot of it is about changing your mindset and breaking habits, and then the real life stuff becomes much easier. You can do it, I know you can...
post #12 of 14
Thread Starter 
I've been meaning to do an update, and now I am. We found a mortgage company who was able to do our first mortgage, home equity line of credit & all our debt into one 1st mortgage. We will pay $900 a month, which is about $50 extra than what we do pay on our 1st mortgage. They were able to use my income & use a higher debt ratio. We got qualifed & the paperwork is now being processed. I had to pay for an appraisal fee; should be interesting to see what our house is worth! If it all goes good, it should be closed in two weeks.
post #13 of 14
Thats great news, Tigger. Remortgaging is always great especially now when interest rates are down so low. Hope it all works out for you financially. Just remember, live within your means and you will be fine!
post #14 of 14
It will be a great relief, I know, when it all comes through. Make sure you do a budget with your new info, it will be fun, because the ends will actually meet!
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