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We also had almost perfect credit, modest home within our means and decent lifestyle back in 2002 when my husband lost his job. He was not able to find another, but because he knew his way around power tools, he took on some carpentry jobs to bring in some extra $$$. That blossomed into a small but struggling business. It had its fits and starts but in the end, just was never enough to really see us through month to month. We couldn't afford medical insurance and it was a medical issue that forced us over the edge. Business went belly up--we fed good money after bad trying to keep it afloat and then wound up declaring chap7 to get out from under credit card bills--which we had run up just trying to survive. We sustained that for about 6 months but then started to fall behind in house payments. The bank got the lawyers involved and we converted to Chap13 just to keep the amount from escalating. That kept us going and in the house for another 18 mos as we struggled to make the house payments. But eventually we just couldnt' keep it going, we fell behind, the bank petitioned the court to begin foreclosure. Since we were also behind in payments to the Chap 13 trustee, the court granted the motion. Months of fighting the bank in the court only added to our debt.
Finally, we sold the house at a fire sale price to avoid the foreclosure. We had a lot of equity in the house, even after the bargain basement price but after we paid off the legal debt (bank's lawyers) and tried to get the other debt current, we have practically nothing left. We live in a rental house that we hate and our equity nest egg is just about gone. With the kids in school, I went back to work FT about 2 years ago, but took a lower paying job. Husband finally found a FT job about 18 months ago. All was well and we were beginning to see a light at the end of the tunnel. I was making solid 401k contributions, we were rebuilding our equity nest egg and our credit score was going up.
About 3 months ago, the company he was working for shut their doors with no notice. So now he's out of work again and we can't make ends meet on my salary. We're moving to an even smaller rental house in Sept (dont' know where everyone will sleep) and are trying to keep our heads above water and not damage our FICO score.
It keeps me awake all night. I look awful from lack of sleep.
How soon can you rebuild credit? I have heard 2-3 years.
I have no problem with the idea of filing for bankruptcy, unlike some folks who think you are "cheating". It is a constitutional right, and in truth, you probably have already paid all you owe and then some - what remains is interest. As far as I am concerned, you cannot "cheat" the banks and credit card companies. They are all crooked to the bone, expect that you will never be debt-free, and just want you to continue making monthly payments, as that is their income and they want to keep it that way. Getting out of the rat race these days is getting harder.
I have never been pushed so far financially that I needed to take the bankruptcy route, but have known many who have. It is not fun to go through. But so many are filing these days, that likely you will undergo less scrutiny than when the good times were rollin'.
My only problem with your post is that you are looking to get back into the credit/debt cycle again as soon as the bankruptcy is over! If you get out of this cycle, stay out! It is truly a no-win situation financially. Our entire economic system is based on this debt. Personally I am getting out by paying my way out, but resisting the temptation to get sucked in again even farther. That's what they want. It is possible to live debt-free and mortgage-free, but the average person will not even consider such a thing as their "lifestyle" would be affected. At the same time, they want to get "rich". Understand that there will be NO wealth where there is debt.
As a said, if you get out from under this time, stay out. No good will ever come of debt (what you call "credit").
Thanks Nor'Eastah
The Thing is i really dont have alot of credit card debt,etc
I would want to rebuild credit so that i can rent an Apt,get a cellphone...
Without the hassle of putting up extra money.
Actually if i had good credit to begin with i wouldnt have so many problems. Decent Interest/Low payments on a Car.
Could get a good loan.Medical bills are the biggest issue for me.
Im making payments but my bills are more than what i make.
Like i stated its a last resort.
When Bear Stern goes broke the government is there to bail them out. When Averagejoe goes broke the government taxes him to pay for Bear Stern. We really need to change this corrupt system
If you look inot many peoples history in the public records, you can see a patern....foreclosure......buy new house....foreclosure....HOA liens....tax liens and what we can't see is the lease cars they don't pay and the credit card debt!!!
If you have trouble paying and are able in what ever way to get out of it, even if it is through bancruptcy...don't be so stupid to do the same things again...at least learn from it and start saving even if it is a little and see how much better it will make you feel if you don't have to be affraid to open your mail or pick up the phone from the person who doesn't show his caller id, IMO when people don't want to pick up calls which have no caller id....that is a red flag...previous I never thought much about it but now I found out that all these people walked away from their homes or were a convicted felon, etc.....honest people don't care who calls them or who is sending mail and sleep well. So change you life after getting out of trouble.
From these posts , one thing is clear, debt is the way we live, period. With out it , the economy would collapse . No matter what you say , or how much you warn people , debt has been so entrenched in our society , that all thats important , is your credit score. If you had little or no debt , you wouldn't have a credit score !
Real life these days , is living off credit,few folks out there can manage , without it. It is tough going to a cash lifestyle , but , it is worth it. There is a balance , and thats the way it used to be, not anymore. D
ebt , is OK , if , it is balanced by the same amount of savings, or , ready,salable assets.
The truth is , we are living off credit , because we can't make it , with the income we have.
There was a time , before credit cards , when , if you didn't have the cash , you didn't get the things you wanted. Then along came " lay a way". You paid for it , slowly , but , never received anything until it was paid off. That kept down the debt spiral......When we moved to ready , easy credit cards , the problems began. I remember the days , when getting an American Express card , was an exciting thing. I tried and tried , then , finally , I got one ! However , it had to be paid off every 30 days , no exception. The department stores were the first to establish revolving credit. It was in their best interest , then came the gas cards , and , finally .....the credit cards , unsecured , with a skys
the limit credit available. Peoples debt only got worse after that. When you ran out of funds to pay the huge interest debt on your cards, the Government retracted the interest deduction on your taxes, however this just started another spiral. In place of the deduction , you could now take out a second home mortgage loan , and , were encouraged to do so , as , it was interest deductible ! This is where many folks are today , they have indebted their homes value in order to pay off those juice loan credit cards. And , not once , but many times over , it just kept going.......living off credit......until today , now their home value is less than they owe. I don't blame people from walking, however , is their fault , not good , but , the devil "made" them do it , and , the devil is the Government. We may have too much Government in our lives as it is , but , one of the things that should be the responsibility of government is an a overseer of the financial industry. Most usury laws have gone the way of the horse and buggy , they let it happen. I feel no remorse for the Banking industry. A lot of em will go broke before this is over , good I say! And , to H ..with bailing them out !
A good place to start , is to make the lender disclose his practices , and , require him to be responsible for the loans he makes , and , not allow them to be sold to unknown parties. Do you know how much of the personal debt in this country is owned by overseas interests ?.......its scary..!
We also had almost perfect credit, modest home within our means and decent lifestyle back in 2002 when my husband lost his job. He was not able to find another, but because he knew his way around power tools, he took on some carpentry jobs to bring in some extra $$$. That blossomed into a small but struggling business. It had its fits and starts but in the end, just was never enough to really see us through month to month. We couldn't afford medical insurance and it was a medical issue that forced us over the edge. Business went belly up--we fed good money after bad trying to keep it afloat and then wound up declaring chap7 to get out from under credit card bills--which we had run up just trying to survive. We sustained that for about 6 months but then started to fall behind in house payments. The bank got the lawyers involved and we converted to Chap13 just to keep the amount from escalating. That kept us going and in the house for another 18 mos as we struggled to make the house payments. But eventually we just couldnt' keep it going, we fell behind, the bank petitioned the court to begin foreclosure. Since we were also behind in payments to the Chap 13 trustee, the court granted the motion. Months of fighting the bank in the court only added to our debt.
Finally, we sold the house at a fire sale price to avoid the foreclosure. We had a lot of equity in the house, even after the bargain basement price but after we paid off the legal debt (bank's lawyers) and tried to get the other debt current, we have practically nothing left. We live in a rental house that we hate and our equity nest egg is just about gone. With the kids in school, I went back to work FT about 2 years ago, but took a lower paying job. Husband finally found a FT job about 18 months ago. All was well and we were beginning to see a light at the end of the tunnel. I was making solid 401k contributions, we were rebuilding our equity nest egg and our credit score was going up.
About 3 months ago, the company he was working for shut their doors with no notice. So now he's out of work again and we can't make ends meet on my salary. We're moving to an even smaller rental house in Sept (dont' know where everyone will sleep) and are trying to keep our heads above water and not damage our FICO score.
It keeps me awake all night. I look awful from lack of sleep.
Your story , is one repeated many times over. Were you on Talk of the nation yesterday ! NPR ? Hang in there--better days WILL find you.....
Your story , is one repeated many times over. Were you on Talk of the nation yesterday ! NPR ? Hang in there--better days WILL find you.....
Thank you. Hopefully, things will get better. Most people feel the same as the poster just previous to you and while I realize debt and credit is misused in our society, I really dont' like being lumped in with the same group. We never used our CCs (except for emergencies like the set of 4 new tires you need all at once) and we always paid them off--until the bottom fell out and we had to live on them.
An update,I have managed to get them to lower two of the medical bill payments.
Hopefully talk a few more down.Im hoping to cut the payments down enough to save 100$ a Month.
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