Just got married at Disney World... might have to file BK

[Jason82]

This has been a busy summer for me... I'm 23 years old.

 

I finished a decorated college career in May in Cincinnati. I got a job offer in Orlando, FL and accepted the position. I then got a better job offer in Ocala, FL and accepted that one. I've been on the job since mid-July. I'm making 36K / year plus commission in the Florida real estate industry. I'm on track to 75k this year, but it takes time for the money to roll in. I should be a division manager before age 30 making a solid 6 figure income (family business).

 

Anyway, my wife and I were married in Disney World this summer. I had to pay for the expensive (but nice) wedding. My family took care of a reception in Cocoa Beach, FL and her family took care of the reception in Cincinnati.

 

My wife is not finished with school so she has been on a job hunt here in Ocala with no luck yet.

 

We didn't want to throw money into an apartment, so we bought a brand new RV and we are living in that while we save up for a home.

 

Anyway, after being together for 5 years as a young couple, we have racked up about 35K in CC debt (as much as my annual income!). Our minimum monthly payments are around $750. Our car payments are $500/month. After groceries, gas, and other living expenses there is no money left.

 

In June, before I put the wedding on my credit card, my credit score was 715. It has taken me 5 years to build up my credit (no delinquincies, good credit since age 18) and I'm afraid to file BK.

 

We want to purchase a home in one year and I could probably save for a large down payment without these credit card payments, but not sure if mortgage companies will look at us with a BK. The company I work for owns an "A" credit mortgage company that ususally doesn't touch people without a 660 middle score. I have connections to B/C lenders that have financed people in high 400s.

 

What should I do?

[hegemony]

cut expenses ASAP.

[autoxer]

You should stop using the credit cards.

[Jason82]

Yes, we actually stopped using the cards about a year ago until I had to put my wedding on a card!

 

Here are our monthly expenses, from greatest to least:

 

1. Credit card minimums: $820.82

2. RV Resort "Rent": $400

3. Car payments: $496.32 (two cars)

4. Groceries: $300

5. Insurance: $193

6. RV Payment: $175

7. Student loans: $103

8. Cell phones (family plan): $96

9. Misc. (hair cuts, pet care, etc): $80

 

Total monthly bills: $2663

 

Total gross income: $2340

 

Once my wife gets a job, we will have more income than outgoing, but until then we're screwed!

[hlburi]

well...maybe a part time job to make ends meet until your wife starts working.

 

::: backing out of thread now before I put my foot in it and say something about "paying" for a big, fancy wedding when you don't have the funds to be able to do that :::

[hegemony]

::: backing out of thread now before I put my foot in it and say something about "paying" for a big, fancy wedding when you don't have the funds to be able to do that :::

I am biting my tongue too...

 

reduce expenses and increase income.

 

if your wife is still in school why doesn't she have a PT job?

[Misha]

You might have to get a part-time job selling pizzas until that extra commission rolls in. Wife needs to get a job asap, even if it's babysitting or working at Taco Bell. Sell the cars--are you upside down on them? Absolutely cut up the cards, see if you can transfer them to a 0% rate card, you should be able to if your score is still up there. You can live on a total debt diet for a bit to pay off the cards. That means no fancy haircuts, no cell phones, no cable, cut back on groceries to $50 a week. I would sell at least one of the cars, preferably the wife's car if she is not working. Budget every single dollar you earn, and get the wife working. If you work at a family business, you might consider (even though it will be hard on the ego) getting rid of the RV and moving in with some family while you get this straightened out. That would free up a lot of money.

 

If you do declare bankruptcy, you can get a home about a year afterward. I know several people who have. You won't get top interest rates though. But if you have 33K in credit card debt and you're going to be declaring bankruptcy, make sure you get the spending habit under control before purchasing a home. I would hate to see you in the same boat two years down the road but this time looking at a foreclosure and no option to declare bankruptcy. Good luck!

[angeleyeskkhr]

$300 a month in groceries for just you and your wife?

 

I'm SURE you can reduce that somehow.

 

we don't spend that much in groceries and household goods (including diapers) I don't think each month... (well not usually ) ETA: and there's three of us.

Edited September 5, 2006 by angeleyeskkhr

[TxQuiltGirl]

I have homework tonight, and I really only have time to post to ONE thread. You are the lucky winner ... hint: This is NOT a good thing. It's time for some tough love. You're 23, so this is a good time to learn this lesson

 

Yes, we actually stopped using the cards about a year ago until I had to put my wedding on a card!

 

Here are our monthly expenses, from greatest to least:

 

1. Credit card minimums: $820.82

2. RV Resort "Rent": $400

3. Car payments: $496.32 (two cars)

Do you HAVE to have two cars? Can you carpool for a while? Get rid of one of these.

4. Groceries: $300

In the name of all that is good and holy, what are two of you eating that it costs $300 a month?? Are you by chance including eating out here? If you are, cut it out. Now. One meal eaten out every month, and that's it. Whatever you're buying, cut it in half - junk food is bad for you.

5. Insurance: $193

6. RV Payment: $175

7. Student loans: $103

Defer them. You have that option, and you need to take it. NOW.

8. Cell phones (family plan): $96

$100 for a two-family plan? No. That's way too expensive. My son and I have a plan that even with two phones and text messaging is only $75.

. Misc. (hair cuts, pet care, etc): $80

 

Total monthly bills: $2663

 

Total gross income: $2340

 

Once my wife gets a job, we will have more income than outgoing, but until then we're screwed!

 

What kind of program is your wife in? Why can't she work? Of course if she does, you will probably need to keep the other car. So there's your choice - two cars, expensive groceries and a working wife ... or one car, cut back on the groceries and the wife doesn't have to work.

 

When she DOES get out of school and gets a decent job, don't do ANYTHING else until you pay down that cc debt ... $820 for MINIMUMS??? OY VEY!!!! Never in all of my years in the real world have I had $820 MINIMUM payments. You will never get those paid down just making the minimums. In fact, I would daresay that when wifey does get a job, you should use ALL of her income to pay down these cards. How much longer till she gets out of school?

 

You need to take a long hard look at how you're spending money. And STOP it. Trust me, no one knows better than I what it's like to struggle. But if you don't want to be here in your 60s looking for advice because you've screwed up yet again, you better get a handle on it NOW.

 

And trust me, I wish someone had told me when I was 23 what I just told you. Good luck.

[angeleyeskkhr]

Do you HAVE to have two cars? Can you carpool for a while? Get rid of one of these.

 

 

Well, unless there's no public transportation and/or they're hours away from wife-y's college, I doubt it. (ETA: for clarification I mean I doubt they absolutely HAVE TO HAVE two cars or will die without it).

 

I mean Fi and I manage with one car even with fi working until 11 pm on Tues/Wed and DD being in daycare and me being in school those days... Public transportation is great...Especially when I get it free for being a university student.

 

::disclaimer: I realize not every person has circumstances like that...however before fi was working until 11 pm we were also able to schedule my classes around his schedule AND even if not free, if you have public transportation available, I'm sure it would be much cheaper than the car payment, insurance, gas, and maintenance each month. ::

Edited September 6, 2006 by angeleyeskkhr

[markw]

In June, before I put the wedding on my credit card, my credit score was 715. It has taken me 5 years to build up my credit (no delinquincies, good credit since age 18) and I'm afraid to file BK.

 

What's your credit score (or scores) NOW? Have you pulled your credit reports and those of your wife's?

[54regcab]

 

::: backing out of thread now before I put my foot in it and say something about "paying" for a big, fancy wedding when you don't have the funds to be able to do that :::

I am biting my tongue too...

 

reduce expenses and increase income.

 

if your wife is still in school why doesn't she have a PT job?

 

You guys KNOW my tongue is bleeding...

[hegemony]

 

::: backing out of thread now before I put my foot in it and say something about "paying" for a big, fancy wedding when you don't have the funds to be able to do that :::

I am biting my tongue too...

 

reduce expenses and increase income.

 

if your wife is still in school why doesn't she have a PT job?

 

You guys KNOW my tongue is bleeding...

LOL. I hear ya!!!!

 

the OP might be []b[][/b] but who knows????

[sfbehr]

Lots of good suggestions here, OP.

 

BK is and should be a last option for you. In NO way is it an easy way out.

[angeleyeskkhr]

I just realized...The OP has two cars and an RV or did he mean a mobile home?

 

I ask because my great grandmother had/has an RV I can't see a need for two cars and a recreational VEHICLE....I mean it would be a pain sure...but if nothing else ya can drive that to work....(provided there's a large parking lot).

[Jason82]

I'll provide some answers and I truly appreciate the responses so far.

 

Yes, we NEED two cars. We're brand new residents to the state of Florida, so she will not be returning to college for about a year so she can get in-state resident tuition rates. She IS looking for a job, we've just been unsuccessful. In Cincinnati, she made $16/hour at a bank. Here in Ocala, FL... she has had two offers for less than $10/hour. She will be accepting the first offer she takes, but we're trying to find the most income.

 

We will drastically reduce our grocery bill. We thought $300/month (~75 week) was normal for two people, but we realize we're over spending there. We're both eat healthy... no junk food, soda, etc... just a lot of fresh chicken, rice, etc.

 

We LIVE in a 26 foot travel trailer (with a slideout!). It's not the kind that you drive... it's the kind you hitch up. We do not have a tow vehicle because we don't need one. We're not traveling, we're living in it.

 

We have a lot of credit card debt.. about 35K worth.

 

I had my mortgage rep (for my company) pull my credit yesterday and he said my middle score is 674 and my wife's is 655. I know that my FICO was in the 700s when I opened a checking account the first week of June, but I knew that adding a wedding to my credit card would drop my score.

 

I don't want to file BK... I think we can stay afloat as long as she gets a job ASAP and I work on my days off. Another family member owns a lawn care company and my old job in Cincinnati has asked me to work from abroad so that will be some additional income.

 

Work is going really well, fortunuately. The real estate market is tough in some parts of Florida, but I've sold 4 homes in the past 6 weeks. If I were on straight commission, I would have made ~$9,000 but I'm on salary plus bonus until I am fully trained.

 

I sincerely appreciate the tips.

 

Oh, about the cars. My '02 Infiniti is worth about $14k and I owe $11k. I have 104k miles on it. I saw a '99 4-door Honda Accord with only 58k miles for $6,800. Should I sell my car and apply the profit towards a lower mileage, slightly older Accord or Camry? That would reduce my car payment, probably reduce car insurance, get slightly better gas mileage... just a thought.

[hegemony]

don't have the mortgage rep pull your scores again...unless you are applying for a mortgage. a HARD is an expensive way to learn your FICO score...

[Genna]

I'll provide some answers and I truly appreciate the responses so far.

 

Yes, we NEED two cars. We're brand new residents to the state of Florida, so she will not be returning to college for about a year so she can get in-state resident tuition rates. She IS looking for a job, we've just been unsuccessful. In Cincinnati, she made $16/hour at a bank. Here in Ocala, FL... she has had two offers for less than $10/hour. She will be accepting the first offer she takes, but we're trying to find the most income.

 

We will drastically reduce our grocery bill. We thought $300/month (~75 week) was normal for two people, but we realize we're over spending there. We're both eat healthy... no junk food, soda, etc... just a lot of fresh chicken, rice, etc.

 

We LIVE in a 26 foot travel trailer (with a slideout!). It's not the kind that you drive... it's the kind you hitch up. We do not have a tow vehicle because we don't need one. We're not traveling, we're living in it.

 

We have a lot of credit card debt.. about 35K worth.

 

I had my mortgage rep (for my company) pull my credit yesterday and he said my middle score is 674 and my wife's is 655. I know that my FICO was in the 700s when I opened a checking account the first week of June, but I knew that adding a wedding to my credit card would drop my score.

 

I don't want to file BK... I think we can stay afloat as long as she gets a job ASAP and I work on my days off. Another family member owns a lawn care company and my old job in Cincinnati has asked me to work from abroad so that will be some additional income.

 

Work is going really well, fortunuately. The real estate market is tough in some parts of Florida, but I've sold 4 homes in the past 6 weeks. If I were on straight commission, I would have made ~$9,000 but I'm on salary plus bonus until I am fully trained.

 

I sincerely appreciate the tips.

 

Oh, about the cars. My '02 Infiniti is worth about $14k and I owe $11k. I have 104k miles on it. I saw a '99 4-door Honda Accord with only 58k miles for $6,800. Should I sell my car and apply the profit towards a lower mileage, slightly older Accord or Camry? That would reduce my car payment, probably reduce car insurance, get slightly better gas mileage... just a thought.

 

 

IMO, I wouldn't sell a reliable car with equity to purchase another used car. You might end up with more problems than you bargained for.

 

Also, I don't think your food bill is excessive for a family of two. I spend almost $200 per month on groceries and I'm single. I also eat healthy food, which tends to be much more pricey than the foods that aren't as good for you.

Edited September 6, 2006 by Genna

[angeleyeskkhr]

We typically eat healthy too...

 

Buy a whole chicken and cook it how it needs to be done.

 

Buy lots of fish/sea food but only what's not expensive (we really like Mahi Mahi which I got for only like $5/lb which isn't really that bad, and salmon and sometimes tilapia).

 

We try to get leaner beef.

 

Lots of fresh veggies and fruits, but only what's in season/inexpensive.

 

 

For instance we have frozen in our freezer for the rest of the week:

 

King Ranch chicken (made with chicken of course)

Mexican Casserole (made with ground beef)

Shrimp scampi

Black bean soup (well, this was for tonight and tomorrow for DD's lunch and we'll eat whatever's left over for tomorrow's dinner as well).

 

 

Then we do have a day of frozen pizza but...DD and fi love pizza...

 

Of course we don't buy all organic or anything mainly because our budget doesn't allow it. But I guess that's the whole point: eat what your budget can support...If it can't support the only organic, either you need another job or ya need to say "hey as much as I'd like it, it'll have to take a backseat in priorities for now."

 

ETA: This week probably isn't quite as healthy as other weeks...I'll admit that. But we typically try to have seafood/fish at least once a week, I am trying to get a veggie meal in there once a week (like the black bean soup, or veggie sandwiches and soup)....

 

Oh, that reminds me I need to go whip up the chicken salad for my lunches for the week.

Edited September 6, 2006 by angeleyeskkhr

[Misha]

I'll provide some answers and I truly appreciate the responses so far.

 

Yes, we NEED two cars. We're brand new residents to the state of Florida, so she will not be returning to college for about a year so she can get in-state resident tuition rates. She IS looking for a job, we've just been unsuccessful. In Cincinnati, she made $16/hour at a bank. Here in Ocala, FL... she has had two offers for less than $10/hour. She will be accepting the first offer she takes, but we're trying to find the most income.

 

We will drastically reduce our grocery bill. We thought $300/month (~75 week) was normal for two people, but we realize we're over spending there. We're both eat healthy... no junk food, soda, etc... just a lot of fresh chicken, rice, etc.

 

We LIVE in a 26 foot travel trailer (with a slideout!). It's not the kind that you drive... it's the kind you hitch up. We do not have a tow vehicle because we don't need one. We're not traveling, we're living in it.

 

We have a lot of credit card debt.. about 35K worth.

 

I had my mortgage rep (for my company) pull my credit yesterday and he said my middle score is 674 and my wife's is 655. I know that my FICO was in the 700s when I opened a checking account the first week of June, but I knew that adding a wedding to my credit card would drop my score.

 

I don't want to file BK... I think we can stay afloat as long as she gets a job ASAP and I work on my days off. Another family member owns a lawn care company and my old job in Cincinnati has asked me to work from abroad so that will be some additional income.

 

Work is going really well, fortunuately. The real estate market is tough in some parts of Florida, but I've sold 4 homes in the past 6 weeks. If I were on straight commission, I would have made ~$9,000 but I'm on salary plus bonus until I am fully trained.

 

I sincerely appreciate the tips.

 

Oh, about the cars. My '02 Infiniti is worth about $14k and I owe $11k. I have 104k miles on it. I saw a '99 4-door Honda Accord with only 58k miles for $6,800. Should I sell my car and apply the profit towards a lower mileage, slightly older Accord or Camry? That would reduce my car payment, probably reduce car insurance, get slightly better gas mileage... just a thought.

 

 

IMO, I wouldn't sell a reliable car with equity to purchase another used car. You might end up with more problems than you bargained for.

 

Also, I don't think your food bill is excessive for a family of two. I spend almost $200 per month on groceries and I'm single. I also eat healthy food, which tends to be much more pricey than the foods that aren't as good for you.

 

I think I am the opposite. I would say yes to selling the car, especially if he can make a $3k profit on it. Then buy a $2k car and put $1k toward the credit card debt. He doesn't have to drive the clunker forever but at least for a good two years while he pays off the cc debt.

[LBCS]

This is my first post in this forum so please bear with me.

 

Let me start of my congratulating you on all the positive things about your credit like the timeliness of payments, etc.

 

From what I am seeing, things aren't desperate yet. Scores are good, and you (finally) have the foresight to

to look at the writing on the wall. I suggest you start a hunt for zero percent BT cards to start reducing those minimum payments. In the extreme case, you could also try to borrow money from your family/friends for a short period of time (30-60 days) to reduce your UTIL - that will easily push your scores past 700 making it easy for you to get zero percent cards PLUS cash advances. These steps, plus all the great tips by the posters ahead of me (plus the bonus you are expecting) might be a better solution than bankruptcy.

 

One thing I strongly suggest is not to mess around with your car right now. The last thing you need is a new headache in the form of a problematic car. If you have a car that runs well, why trade it in for a 8 year old car?

 

 

 

I'll provide some answers and I truly appreciate the responses so far.

 

Yes, we NEED two cars. We're brand new residents to the state of Florida, so she will not be returning to college for about a year so she can get in-state resident tuition rates. She IS looking for a job, we've just been unsuccessful. In Cincinnati, she made $16/hour at a bank. Here in Ocala, FL... she has had two offers for less than $10/hour. She will be accepting the first offer she takes, but we're trying to find the most income.

 

We will drastically reduce our grocery bill. We thought $300/month (~75 week) was normal for two people, but we realize we're over spending there. We're both eat healthy... no junk food, soda, etc... just a lot of fresh chicken, rice, etc.

 

We LIVE in a 26 foot travel trailer (with a slideout!). It's not the kind that you drive... it's the kind you hitch up. We do not have a tow vehicle because we don't need one. We're not traveling, we're living in it.

 

We have a lot of credit card debt.. about 35K worth.

 

I had my mortgage rep (for my company) pull my credit yesterday and he said my middle score is 674 and my wife's is 655. I know that my FICO was in the 700s when I opened a checking account the first week of June, but I knew that adding a wedding to my credit card would drop my score.

 

I don't want to file BK... I think we can stay afloat as long as she gets a job ASAP and I work on my days off. Another family member owns a lawn care company and my old job in Cincinnati has asked me to work from abroad so that will be some additional income.

 

Work is going really well, fortunuately. The real estate market is tough in some parts of Florida, but I've sold 4 homes in the past 6 weeks. If I were on straight commission, I would have made ~$9,000 but I'm on salary plus bonus until I am fully trained.

 

I sincerely appreciate the tips.

 

Oh, about the cars. My '02 Infiniti is worth about $14k and I owe $11k. I have 104k miles on it. I saw a '99 4-door Honda Accord with only 58k miles for $6,800. Should I sell my car and apply the profit towards a lower mileage, slightly older Accord or Camry? That would reduce my car payment, probably reduce car insurance, get slightly better gas mileage... just a thought.

 

 

IMO, I wouldn't sell a reliable car with equity to purchase another used car. You might end up with more problems than you bargained for.

 

Also, I don't think your food bill is excessive for a family of two. I spend almost $200 per month on groceries and I'm single. I also eat healthy food, which tends to be much more pricey than the foods that aren't as good for you.

 

I think I am the opposite. I would say yes to selling the car, especially if he can make a $3k profit on it. Then buy a $2k car and put $1k toward the credit card debt. He doesn't have to drive the clunker forever but at least for a good two years while he pays off the cc debt.

[autoxer]

We didn't want to throw money into an apartment, so we bought a brand new RV and we are living in that while we save up for a home.

I wouldn't think that a brand new RV would be cheaper than renting an apartment when you figure in the depreciation. Do you plan on selling the RV when you buy a home? Will it be worth more than you owe?

 

Does (2. RV Resort "Rent": $400) include electricity & water?

 

Do the CC's have high interest rates?

 

How much longer is your training until you get straight commission?

[Caglehead]

I’m also biting my tongue on why in the world someone would pay for a big wedding with money so tight already. But – what’s done is done.

 

As for the rest, a second job sounds like a good option. Or you could start going to yard sales and seeing what “treasures†you could find that might make some money on ebay, amazon, etc.

[bassmount]

We didn't want to throw money into an apartment, so we bought a brand new RV and we are living in that while we save up for a home.

I wouldn't think that a brand new RV would be cheaper than renting an apartment when you figure in the depreciation. Do you plan on selling the RV when you buy a home? Will it be worth more than you owe?

 

Does (2. RV Resort "Rent": $400) include electricity & water?

 

 

 

I'm not the OP, but I will answer this from my POV. The answer is Yes it is better. We bought (albeit not new) a travel trailer instead of having DH rent an apartment/Corporate Suite while he was on a year long assignment in Georgia. Now his "lot rent" was only $300 a month and included basic cable, electric and water. We added in high speed Internet and a phone for $75.00 a month. On top of that we would have had to furnish the apartment. So, for $375 he got what we would have paid $900- $1100 for (apartment) or $1200- $1400 for (corporate suite). We bought the camper 4 years ago for $4000.00 and we just sold it for $3500.00

 

Yes, much like a car, boat or trailer home; travel trailers will depreciate. BUT if you sell it at the right time of the year, the loss is not that much and you can ususally get at least pay off for them.

 

So, basically the OP is probably accommodating himself cheaply with a lot included in the "lot." Try to furnish an apartment and pay the bills for less that the $500.00 a month they are paying for the travel trailer and lot rent, in a resort area of Florida.

[TxQuiltGirl]

This is my first post in this forum so please bear with me.

 

Let me start of my congratulating you on all the positive things about your credit like the timeliness of payments, etc.

 

From what I am seeing, things aren't desperate yet. I'm sorry but I disagree. $33k in cc debt and being $300 in the hole every month seems pretty desperate to me. Scores are good, and you (finally) have the foresight to to look at the writing on the wall. I suggest you start a hunt for zero percent BT cards to start reducing those minimum payments. In the extreme case, you could also try to borrow money from your family/friends for a short period of time (30-60 days) to reduce your UTIL - that will easily push your scores past 700 making it easy for you to get zero percent cards PLUS cash advances. These steps, plus all the great tips by the posters ahead of me (plus the bonus you are expecting) might be a better solution than bankruptcy.

 

I really don't think that the OP needs another credit card. Even though I understand the theory behind your thoughts, I don't think that would be in this person's best interest. I think he should get another job and/or his wife should find something and get those things paid off.

 

One thing I strongly suggest is not to mess around with your car right now. The last thing you need is a new headache in the form of a problematic car. If you have a car that runs well, why trade it in for a 8 year old car?

 

I will agree with the car thing. I wouldn't get rid of a reliable car to buy a beater either.

 

Now ... one thing that the OP has said that just irritated the heck out of me was this ...

 

She IS looking for a job, we've just been unsuccessful. In Cincinnati, she made $16/hour at a bank. Here in Ocala, FL... she has had two offers for less than $10/hour.

 

Ocala is NOT Cincinatti and she nor you should be basing her earning potential off a city half a continent away. If she has been offered two jobs, then she HAS been successful - she just didn't want to "make less" than she was in Cincy. Here's a news flash - $10 an hour is better than $0 an hour.

 

And it irritates me so much because you KNOW you have all these bills to pay and she's passing up jobs because they don't pay as much as she would like them to pay. That's insanity ... she could continue to look for a better paying job, but for crying out loud, she needs to take whatever she can get RIGHT NOW. You don't really have the luxury of picking & choosing your job in a situation like this.

 

It brings back memories of when the people from up north started invading Houston in the 1980s ... and the men who wouldn't take a job for $12 an hour because they'd made $18 in Michigan or wherever they came from. HELLO! This isn't MICHIGAN. It's Houston and the economy doesn't support that salary. This situation is really no different. You can't keep your nose in the air when you're drowning; you better start swimming or else you'll surely sink.