Credit Counseling?
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Thread Starter
Join Date: May 2012
Location: Florida
Posts: 6,780
Credit Counseling?
Does anyone have any experience with this? I'm not looking for any specific answers, I just don't know where in the world to begin with this question. I figured since so many of you have also experienced a financial fallout due to the A's in your lives, you might be able to help me figure out a starting point.
In a nutshell, AH created a mountain of debt in his drinking days that we have been doing our very best to manage & I just can't do it any more. I sat down & took a real look at the #'s over the weekend the pit is just too large. He's killing himself (now that he's sober) trying to pay all of this down & after nearly a year of nose-to-the-grind, we're no better off. (In fact, it might be worse) Between finance charges, sky-high interest rates (due to his missed pymts), such high principle balances & there just not being any real profitable work to be had for him.... I just don't see an end in sight. He has an S-corp, so anything coming into the company has to be used to pay company bills first & then he can take a paycheck.... which hasn't happened in like, 3-4 years or longer at this point. He barely brings in enough to cover monthly minimums even though he's out there hustling & looking for & doing work 10-14 hours a day.
I can't live like this for another decade+ & I've done everything else I can to trim the budget. I reviewed & adjusted insurance policies for better premiums, canceled any 'extras' that are wants & not needs, enrolled in a mortgage assistance program, etc. I'm out of options. I already work 50 hours a week & he has been applying for jobs for a year while still working his biz. Even if he gets a job tomorrow, it still won't mean $ into my household because the business debt is just so enormous. I simply don't make enough money to cover everything no matter what I do.
Do I look for a credit counselor? An attorney? Do I need to just jump into a bankruptcy filing?
This irks me to no end.... I'm MAD! I spent YEARS building a solid financial foundation for us & had our credit scores in the mid-800's. In addition to blowing through our cash savings, checking savings, his retirement account & creating this insurmountable debt... everything I've worked for is just blown to bits & that grates my nerves more than anything. All those years of hard work down the drain.
In a nutshell, AH created a mountain of debt in his drinking days that we have been doing our very best to manage & I just can't do it any more. I sat down & took a real look at the #'s over the weekend the pit is just too large. He's killing himself (now that he's sober) trying to pay all of this down & after nearly a year of nose-to-the-grind, we're no better off. (In fact, it might be worse) Between finance charges, sky-high interest rates (due to his missed pymts), such high principle balances & there just not being any real profitable work to be had for him.... I just don't see an end in sight. He has an S-corp, so anything coming into the company has to be used to pay company bills first & then he can take a paycheck.... which hasn't happened in like, 3-4 years or longer at this point. He barely brings in enough to cover monthly minimums even though he's out there hustling & looking for & doing work 10-14 hours a day.
I can't live like this for another decade+ & I've done everything else I can to trim the budget. I reviewed & adjusted insurance policies for better premiums, canceled any 'extras' that are wants & not needs, enrolled in a mortgage assistance program, etc. I'm out of options. I already work 50 hours a week & he has been applying for jobs for a year while still working his biz. Even if he gets a job tomorrow, it still won't mean $ into my household because the business debt is just so enormous. I simply don't make enough money to cover everything no matter what I do.
Do I look for a credit counselor? An attorney? Do I need to just jump into a bankruptcy filing?
This irks me to no end.... I'm MAD! I spent YEARS building a solid financial foundation for us & had our credit scores in the mid-800's. In addition to blowing through our cash savings, checking savings, his retirement account & creating this insurmountable debt... everything I've worked for is just blown to bits & that grates my nerves more than anything. All those years of hard work down the drain.
Occasional poor taste poster
Join Date: Jul 2005
Posts: 2,542
My 1st wife and I went to a non profit consumer credit counseling service years ago back in the 80s. It was humiliating turning over our credit cards but they did renegotiate lower payment plans and some creditors even lowered or waived interest rates. It took years but we/I got out of that hole. Doesn't hurt to get more info on that.
She eventually filed for bankruptcy and even though it was after we were divorced I was still impacted. At the time of our separation we agreed to each assume half the marital debt. I was still joint on the half she agreed to pay, and she included that debt in her BR filing (nice). My choice was to file for BR myself, sue her for breach of the terms of our separation agreement, or pay the debt myself. I ended up assuming all our joint marital debt.
She eventually filed for bankruptcy and even though it was after we were divorced I was still impacted. At the time of our separation we agreed to each assume half the marital debt. I was still joint on the half she agreed to pay, and she included that debt in her BR filing (nice). My choice was to file for BR myself, sue her for breach of the terms of our separation agreement, or pay the debt myself. I ended up assuming all our joint marital debt.
peaceful seabird
Join Date: Sep 2008
Location: floating
Posts: 4,822
I recommend getting a free consultation with a bankruptcy attorney. Pay if you must. The laws on bankruptcy have changed in the past few years. I was more comfortable getting legal advice from someone in my community that was familiar with the laws and the rulings of the local trustee.
I filed bankruptcy one year after my divorce. I had a very high credit score, but was drowning in the debt from our alcoholic marriage. It would have taken me 30 years to pay off the debts.
I consulted with a bankruptcy attorney. I also looked into credit counseling. The credit counselors charged a fee and the results would not be any different than what I was already doing.
One of the bankruptcy changes is the requirement to complete a credit counseling course (Mine was online) by the persons filing for bankruptcy. Part of my attorney fee went to the cost of that course. The course was very helpful.
I filed bankruptcy one year after my divorce. I had a very high credit score, but was drowning in the debt from our alcoholic marriage. It would have taken me 30 years to pay off the debts.
I consulted with a bankruptcy attorney. I also looked into credit counseling. The credit counselors charged a fee and the results would not be any different than what I was already doing.
One of the bankruptcy changes is the requirement to complete a credit counseling course (Mine was online) by the persons filing for bankruptcy. Part of my attorney fee went to the cost of that course. The course was very helpful.
Member
Join Date: Jun 2011
Posts: 2,163
Just be careful when dealing with one of those credit counseling services.
Some are not what they say they are. Even the "non-profit" ones may not have your best interest in mind. Some are simply a business trying to make money.
Talk with a bankruptcy attorney, usually the first consultation is free. Make a list of questions and go pick his/her brain. Protect yourself.
Some are not what they say they are. Even the "non-profit" ones may not have your best interest in mind. Some are simply a business trying to make money.
Talk with a bankruptcy attorney, usually the first consultation is free. Make a list of questions and go pick his/her brain. Protect yourself.
I'm no angel!
Join Date: May 2005
Location: tampa, fl
Posts: 6,728
I would meet with a bankruptcy attorney, if the attorney feels there is any hope whatsoever, the firm can map out an out of court reorganization plan, if not, then there are two choices one is chapter 7 asset liquidation or chapter 13 a structured repayment plan.
Member
Join Date: Apr 2010
Location: USA
Posts: 1,118
I know exactly what you are talking about. I've been in the same situation. Years ago, we sought credit counseling. Then a few years later, we talked bankruptcy (we never did go to court, even though we filed.). Then just recently, there was another financial fallout, but by this time, I had learned to earn my own good income, and manage my own finances.
That being said, I didn't learn how to say no, so I wound up foolishly signing on student loan debt for my daughter, cosigning a mortgage with my MIL, and worst of all, cosigning business loan papers for AH which wound up putting us in deep debt because his alcoholism tanked the business. How dumb was I??
What has helped me the most, and this is going to sound cheesy, but I have fallen hook, line and sinker for Dave Ramsey. The reason is, when things are so overwhelming, his advice absolutely clear, no-nonsense, and unambiguous. "This is what you do--A, B, and C, in that order, and if you don't, you're stupid." Basically that's his message and I needed to hear it said in just that way.
Listen to his radio shows, and read his books, but at the same time, consult an attorney. I would NOT do the bankruptcy route yet. That would be the last resort--and beware, because when we were considering bankruptcy, and then changed our minds, because the attorney had filed the papers, even though we never went to court, it was still on our credit for 7 years.
Also, see if there's any way at all to increase your income.
You CAN get through it. I had 200k of debt 2 and half years ago, and I've erased 16 of 22 debts since then. And I've stopped saying yes to anyone but me.
That being said, I didn't learn how to say no, so I wound up foolishly signing on student loan debt for my daughter, cosigning a mortgage with my MIL, and worst of all, cosigning business loan papers for AH which wound up putting us in deep debt because his alcoholism tanked the business. How dumb was I??
What has helped me the most, and this is going to sound cheesy, but I have fallen hook, line and sinker for Dave Ramsey. The reason is, when things are so overwhelming, his advice absolutely clear, no-nonsense, and unambiguous. "This is what you do--A, B, and C, in that order, and if you don't, you're stupid." Basically that's his message and I needed to hear it said in just that way.
Listen to his radio shows, and read his books, but at the same time, consult an attorney. I would NOT do the bankruptcy route yet. That would be the last resort--and beware, because when we were considering bankruptcy, and then changed our minds, because the attorney had filed the papers, even though we never went to court, it was still on our credit for 7 years.
Also, see if there's any way at all to increase your income.
You CAN get through it. I had 200k of debt 2 and half years ago, and I've erased 16 of 22 debts since then. And I've stopped saying yes to anyone but me.
Member
Join Date: Aug 2011
Posts: 451
Well,
After I divorced my ex-h we had acquired a lot of debt together. We made a lot of money and spent it accordingly. He wanted the house we owned together but always paid the mortgage late and even though divorced, my credit was being affected and my score was dropping. I had huge amounts of credit card debt which would have taken me half the rest of my life to pay off. I had a huge car payment without the dual income anymore.
I filed for bankruptcy. To be honest, it was the best thing I ever did and I have been very careful with my credit since then. I had such a good track record before the bk that my credit, though hit, wasn't impacted as badly as some after a bk. Two years later and I qualify for an FHA loan which I may take advantage of sooner or later if I find the right place for the right price. My score is acceptable for a home loan just two years after filing bk. So, that is just my experience. My ex kept the house and our travel trailer and his credit is in the tank. I filed BK to protect myself from many things and am so glad I did so. He completely understood and just re-fi'd the house in his name only recently (even though I was absolved of the loan through BK). I think you may actually be able to file for BK if you still have a spouse??? An attorney would be able to answer that for you. I would think it would be nice if even you could get out from under the debt he created from his addiction, have your own account and file BK on your own if that option is available. Take what you like, and leave the rest.
After I divorced my ex-h we had acquired a lot of debt together. We made a lot of money and spent it accordingly. He wanted the house we owned together but always paid the mortgage late and even though divorced, my credit was being affected and my score was dropping. I had huge amounts of credit card debt which would have taken me half the rest of my life to pay off. I had a huge car payment without the dual income anymore.
I filed for bankruptcy. To be honest, it was the best thing I ever did and I have been very careful with my credit since then. I had such a good track record before the bk that my credit, though hit, wasn't impacted as badly as some after a bk. Two years later and I qualify for an FHA loan which I may take advantage of sooner or later if I find the right place for the right price. My score is acceptable for a home loan just two years after filing bk. So, that is just my experience. My ex kept the house and our travel trailer and his credit is in the tank. I filed BK to protect myself from many things and am so glad I did so. He completely understood and just re-fi'd the house in his name only recently (even though I was absolved of the loan through BK). I think you may actually be able to file for BK if you still have a spouse??? An attorney would be able to answer that for you. I would think it would be nice if even you could get out from under the debt he created from his addiction, have your own account and file BK on your own if that option is available. Take what you like, and leave the rest.
Member
Join Date: Jul 2009
Location: Wild West, USA
Posts: 407
I recently signed up with a nonprofit credit counseling company that I found through the Better Business Bureau. It has been a lifesaver for me-- organization is not my strong suit to start with, and I much prefer writing one check to them each month than a handful of small ones. My debt is mainly medical bills, nothing terribly expensive, but they went into collections when I had no job and couldn't pay anything even if it was small. It got to where I stopped answering the phone b/c most calls were from debt collectors.
The credit counseling folks sat down with me and set up a budget and I decided on the monthly payment I could make, and they negotiated with my creditors from there. I can answer the phone again. It's a huge improvement.
The credit counseling folks sat down with me and set up a budget and I decided on the monthly payment I could make, and they negotiated with my creditors from there. I can answer the phone again. It's a huge improvement.
Member
Thread Starter
Join Date: May 2012
Location: Florida
Posts: 6,780
Thank you all!!
You all have great advice here. So many different perspectives, it's given me a lot to think about & brought up more questions. I'm actually really capable of managing our finances that's what just oinks me off more than anything here. I'm very financially aware & have great money management skills... I even work in financial services & have for many years & that makes this so personally offensive to me. I just can't create income to cover a shortage of this magnitude & my experience is with budgeting to cover current & future living expenses, not recovering from past debts.
It's impossible, in my mind, to understand how this even happened. How he could spend beyond his/our means & WTH exactly did he expect to happen when the bills arrived??? It honestly baffles me. It's one of those components of the A's mind that is so far from the way that I think that I don't know if I could ever understand such a difference. And even more than that - spending it all so FOOLISHLY & having literally NOTHING to show for it.
I know, I know. Preachin' to the choir here!! lol
Yes, dissolving the corp is essential, but there aren't any worthwhile assets left to recover or use against debts. (but we're still working on an inventory of even small tools, etc to ascertain exactly WHAT there is instead of making assumptions.) Being an S-corp I believe that makes us more personally responsible for the debt than if it was a standard C-corp structure. (which is one of those ques for an attorney I guess) It's really only open as a way of keeping his license active & to allow him to take what work does come his way in the meantime. It's taken me a while, but he finally seems to see the futility in kicking that dead horse. Until pretty recently, his ego seemed very tied to 'saving' the company somehow.
I have gone over & over our budget with a fine-tooth inspection comb
& I am constantly tweaking it whenever I find a gap. I think a lot like you Anvil, I refuse to pay unnecessary fees like ATM fees, late charges etc. I may only be able to make minimum payments most of the time, but they are timely & I've been able to transfer some balances to lower or no interest cards for the time being. Ironically, we JUST finished doing some home maintenance that included new weatherstripping, etc to work on our energy efficiency too. I stack my chores & running around so I can be gas-efficient with my vehicle. I'm *this close* to the end of our phone contracts & then we can cut that expense dramatically as well. I'm a coupon queen (a la my mom) & found that I can stack coupons at BJ's so I can buy in bulk with great discounts that way & also save the time & fuel by not making as many trips to the store. We do free activities on the weekends with the kid, beach, park, free concerts, etc. We rent our movies from the library unless Redbox sends me promo codes, lol. Outside of my weekly yoga class, we spend next to nothing on entertainment these days & I'm not willing to give it up. It's too important to my mental health right now. And dammit, I deserve to have it!! I didn't make this mess, didn't get anything out of it & am killing myself to make it right so sometimes I need to be able to spend $10 without feeling guilty or selfish.
I also can't control his spending so where I know he could save a few bucks here & there I have to sit him down & educate him on his spending habits without yelling. That's a BIG part of this, so the Dave Ramsey suggestion is perfect to help with that! Even if he knows I'm 100% correct, he takes that kind of criticism better from anyone else.
Sigh. I keep telling myself that nothing is permanent & that eventually things have to change & get better as long as we are actively & honestly seeking solutions. It just SUCKS hardcore in the meantime.
Thanks for reading my vent!
You all have great advice here. So many different perspectives, it's given me a lot to think about & brought up more questions. I'm actually really capable of managing our finances that's what just oinks me off more than anything here. I'm very financially aware & have great money management skills... I even work in financial services & have for many years & that makes this so personally offensive to me. I just can't create income to cover a shortage of this magnitude & my experience is with budgeting to cover current & future living expenses, not recovering from past debts.
It's impossible, in my mind, to understand how this even happened. How he could spend beyond his/our means & WTH exactly did he expect to happen when the bills arrived??? It honestly baffles me. It's one of those components of the A's mind that is so far from the way that I think that I don't know if I could ever understand such a difference. And even more than that - spending it all so FOOLISHLY & having literally NOTHING to show for it.
I know, I know. Preachin' to the choir here!! lol
Yes, dissolving the corp is essential, but there aren't any worthwhile assets left to recover or use against debts. (but we're still working on an inventory of even small tools, etc to ascertain exactly WHAT there is instead of making assumptions.) Being an S-corp I believe that makes us more personally responsible for the debt than if it was a standard C-corp structure. (which is one of those ques for an attorney I guess) It's really only open as a way of keeping his license active & to allow him to take what work does come his way in the meantime. It's taken me a while, but he finally seems to see the futility in kicking that dead horse. Until pretty recently, his ego seemed very tied to 'saving' the company somehow.
I have gone over & over our budget with a fine-tooth inspection comb
& I am constantly tweaking it whenever I find a gap. I think a lot like you Anvil, I refuse to pay unnecessary fees like ATM fees, late charges etc. I may only be able to make minimum payments most of the time, but they are timely & I've been able to transfer some balances to lower or no interest cards for the time being. Ironically, we JUST finished doing some home maintenance that included new weatherstripping, etc to work on our energy efficiency too. I stack my chores & running around so I can be gas-efficient with my vehicle. I'm *this close* to the end of our phone contracts & then we can cut that expense dramatically as well. I'm a coupon queen (a la my mom) & found that I can stack coupons at BJ's so I can buy in bulk with great discounts that way & also save the time & fuel by not making as many trips to the store. We do free activities on the weekends with the kid, beach, park, free concerts, etc. We rent our movies from the library unless Redbox sends me promo codes, lol. Outside of my weekly yoga class, we spend next to nothing on entertainment these days & I'm not willing to give it up. It's too important to my mental health right now. And dammit, I deserve to have it!! I didn't make this mess, didn't get anything out of it & am killing myself to make it right so sometimes I need to be able to spend $10 without feeling guilty or selfish.I also can't control his spending so where I know he could save a few bucks here & there I have to sit him down & educate him on his spending habits without yelling. That's a BIG part of this, so the Dave Ramsey suggestion is perfect to help with that! Even if he knows I'm 100% correct, he takes that kind of criticism better from anyone else.
Sigh. I keep telling myself that nothing is permanent & that eventually things have to change & get better as long as we are actively & honestly seeking solutions. It just SUCKS hardcore in the meantime.
Thanks for reading my vent!
Member
Thread Starter
Join Date: May 2012
Location: Florida
Posts: 6,780
And here's the kick-in-the-arse of Irony at work.
After I posted this yesterday, he was working on some estimates with a large company that he does subcontracted work back & forth for in the course of the conversation they mentioned having issues with one of their fabricators. After some back & forth they realized he was SERIOUS about wanting the job & offered him the part-time position.
He worked 12 hours overnight last night & was giddy like a schoolgirl at the opportunity. He's exhausted from working almost 20 out of 24 hours but feels productive & like he's able to contribute even just a little. It's not a guaranteed schedule but it's INCOME & he has a great relationship with these people. (One of the few worthwhile bridges not burned by his addiction, thank god!)
I don't freaking believe it!
After I posted this yesterday, he was working on some estimates with a large company that he does subcontracted work back & forth for in the course of the conversation they mentioned having issues with one of their fabricators. After some back & forth they realized he was SERIOUS about wanting the job & offered him the part-time position.
He worked 12 hours overnight last night & was giddy like a schoolgirl at the opportunity. He's exhausted from working almost 20 out of 24 hours but feels productive & like he's able to contribute even just a little. It's not a guaranteed schedule but it's INCOME & he has a great relationship with these people. (One of the few worthwhile bridges not burned by his addiction, thank god!)
I don't freaking believe it!
Member
Thread Starter
Join Date: May 2012
Location: Florida
Posts: 6,780
Just thought I'd update this in case anyone else is interested in how I'm handling our financial rebuilding.
AH has been able to convert the part-time position to a full-time gig which has been wonderful. We're still settling in to his new schedule & working evenings to finish off any open jobs he already had. It's been a big change but he's willingly working through it all, day by day. Not huge in terms of salary, but something steady for sure! And the potential for so much more is there.... I just have to be patient.
I am working at refinancing our house under the HARP program which can effectively lower our pymt by about $150/month. I'm also working on refinancing or settling with our line of credit under the Second Lien Extinguishment program.
I consulted with my boss (who is a CFP) even though it meant swallowing my pride & asking for assistance. (I posted here first to get some ideas & thoughts together before bringing everything to her.) She suggested that both of these programs are valid & worth pursuing. I was/am unsure about attempting a one-time buyout from our line of credit since I have no savings to pay for something like that. (I could potentially cut my debt from $20K to about $7K) She said to see if I can use a credit card convenience check to cover it because I can then pursue debt consolidation/counseling on that balance in addition to our other credit cards. Apparantly the big difference is that the credit counseling services don't deal with property secured debt, only unsecured credit debt. By settling with them using a credit card convenience check my secured debt becomes unsecured.
So, if the refinance & the 2nd line of credit are more manageable AND we can consolidate our other debts, we might be able to avoid any kind of bankruptcy. Woohoo!
The only thing I need to check into is how the S-corp credit cards are handled because they are in AH's biz name & he signed for them with a personal guarantee.
I have had my credit report run & was ELATED to find that my score is still very high & none of his missed payments, etc have affected my score. Luckily when we refinanced the house years ago we did it in my name only (it was just easier at the time & I didn't need him to qualify on the loan) so refinancing without running him was no problem this time around.
So, looking up!
AH has been able to convert the part-time position to a full-time gig which has been wonderful. We're still settling in to his new schedule & working evenings to finish off any open jobs he already had. It's been a big change but he's willingly working through it all, day by day. Not huge in terms of salary, but something steady for sure! And the potential for so much more is there.... I just have to be patient.
I am working at refinancing our house under the HARP program which can effectively lower our pymt by about $150/month. I'm also working on refinancing or settling with our line of credit under the Second Lien Extinguishment program.
I consulted with my boss (who is a CFP) even though it meant swallowing my pride & asking for assistance. (I posted here first to get some ideas & thoughts together before bringing everything to her.) She suggested that both of these programs are valid & worth pursuing. I was/am unsure about attempting a one-time buyout from our line of credit since I have no savings to pay for something like that. (I could potentially cut my debt from $20K to about $7K) She said to see if I can use a credit card convenience check to cover it because I can then pursue debt consolidation/counseling on that balance in addition to our other credit cards. Apparantly the big difference is that the credit counseling services don't deal with property secured debt, only unsecured credit debt. By settling with them using a credit card convenience check my secured debt becomes unsecured.
So, if the refinance & the 2nd line of credit are more manageable AND we can consolidate our other debts, we might be able to avoid any kind of bankruptcy. Woohoo!
The only thing I need to check into is how the S-corp credit cards are handled because they are in AH's biz name & he signed for them with a personal guarantee.
I have had my credit report run & was ELATED to find that my score is still very high & none of his missed payments, etc have affected my score. Luckily when we refinanced the house years ago we did it in my name only (it was just easier at the time & I didn't need him to qualify on the loan) so refinancing without running him was no problem this time around.
So, looking up!
Member
Join Date: Nov 2010
Posts: 2,052
Just an extra thought...
What's done is done, of course, and there were a lot of great responses. That said, I found myself in a similar hole several years ago, though not as deep, with my alcoholic wife. What I did, finally, was legally divorce her and separate all of our finances. You don't necessarily, at least in my state, have to live apart to be divorced.
It's been several years now and I can definitively say in retrospect it was one of the very few incredibly great decisions I have made relative to my wife, her drinking, and how I am affected by it.
It didn't change the obligations I had then, but it did and does shield me from decisions she makes in the present and going forward. To this day all of our finances are separate-- I'm not on her stuff and she's not on mine.
Her most recent "event" cost her just short of $1,000. Financially, it cost me nothing.
Thank God.
Cyranoak
It's been several years now and I can definitively say in retrospect it was one of the very few incredibly great decisions I have made relative to my wife, her drinking, and how I am affected by it.
It didn't change the obligations I had then, but it did and does shield me from decisions she makes in the present and going forward. To this day all of our finances are separate-- I'm not on her stuff and she's not on mine.
Her most recent "event" cost her just short of $1,000. Financially, it cost me nothing.
Thank God.
Cyranoak
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