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I know all of you have suggested I get rid of my car, but that's absolutely not a possibility now.
I just blue booked it, and I'm even worse off than I thought. The blue book value (private party) is $13,320. So now, if I sell it, I'll be $12,000 in the red. No one is going to lend me unsecured money when I'm already in the whole over $20k by it. It's the obvious answer, but I really don't think I can pull it off.
I love the suggestion of being a dog walker. I live in a condo complex and nearly half the residents (including me) have a dog. I'm going to make up a flyer for our community bulletin board to advertise. Do you think it's safe to put an ad on craigslist, too?
Do you think it's safe to put an ad on craigslist, too?
No, don't do that for dog-walking, as initially you're going to want to limit your market to areas where you can walk rather than drive to meet clients (i.e., not waste gas). Once your volume starts to pick up, you can cover the expenses of driving.
I would start putting up flyers, though, and start talking to dog owners - especially ones you might know. Also, start educating yourself about different breeds and their temperaments and needs - and spend time talking with owners about their individual dogs. You need to come across as professional, knowledgeable and caring.
Don't sweat the car. If it's covered by warranty, just find a way to keep paying on it (refinance, if possible - what is the interest by the way?). Too many people on this forum are the hunker-down, self-flagellation types who think you're better off sitting home with raman noodles and such.
I would, though, ask for some help from relatives if they're expecting you to travel much.
Have you also considered the idea of taking a loan from relatives to cover you while you establish more income? If they're in a position to help, it might not be a bad idea. Be professional about it, agree to a nominal interest rate and draw up a proper contract.
I suppose that part of the reason I only use 100 minutes a month is because I text a lot. I'm not sure how much texts cost on top of the $.10/min., but from what everyone is saying, I can't really see a benefit from losing my current cell phone. Sure, the monthly charges would be less (maybe) but that $150 early termination fee isn't something I can really look past right now.
Ok, I'm going to be blunt here...
You don't want to help yourself badly enough to make the sacrifices necessary to climb out of this hole yet. Period.
If I was about to drown in debt, the last thing I'd do is worry about texting my friends and family members or giving up a cell phone package. Unless your cell phone is being used for business purposes that make you money, it is simply a luxury that you don't want to be without. Cutting out the cell phone is not going to solve your problems, but the attitude that you have toward the phone is indicative of the real issues which will keep you in this hole. Until you're ready to take action, we're all wasting time coming up with solutions to your problem.
Now, before you get mad and blow up I'd challenge you to read through my post again and really think about your situation. I didn't write this post to beat you up and hack you off. I wrote it so that you'd take an honest assessment of your situation and decide what you're willing to do about it.
I was just browsing craigslist looking at cars, and I came across a few ads for people willing to take over payments due to bad credit, divorce, etc. Is this ever a legitimate option?
The fact is, I cannot get a loan to cover the $8-10,000 deficiency I'm going to face if I sell my car. No one will lend to me due to my high unsecured debt. Letting someone take over the payments on my car and getting one I can buy outright sounds like a better option, provided it's legitimate.
DO NOT LET SOMEONE ELSE TAKE OVER PAYMENTS ON YOUR VEHICLE. I'll say it again. DO NOT LET SOMEONE ELSE TAKE OVER PAYMENTS ON YOUR VEHICLE.
In the scenarios that you have described, everything will still be listed in your name while someone else has possession of the car and is supposed to make payments to you. You, in turn, are still responsible for making those payments to the lender. You are also still liable for insurance and anything that may happen to the vehicle. You'd also be liable for anything that the new "owner" did while in the vehicle. Bad, bad, bad idea.
I'm no expert, but I disagree with all of the advice telling you to sell the car. You maybe should not have bought the car in the first place, but it doesn't make sense to sell it for a loss and still have to pay $12,000 back for something that you no longer have. At least if you keep it, eventually it will be paid off and you will own it outright.
Finding ways to bring in more income is your best option. I like the dogwalking idea. I have a friend who started doing this a few years ago, and now owns her own dogwalking business and employs about a dozen people who walk dogs and pet-sit for her clients. She makes a really good income doing this.
It would be great if you could consolidate your debt and only have one payment. I don't know if anyone would lend enough to you based on your current situation, but it may not hurt to try. IMO, even if the interest rate on that loan is a little higher, a lower monthly payment would give you some breathing room and allow you to pay for expenses and neccessites.
Also, I am assuming that you have no equity in your condo? I wouldn't normally encourage someone to tap into that in order to pay unsecured debt, but sometimes that is a legitimate option. Years ago I chose to do that myself and it allowed me to get myself together financially, and a couple years later I refinanced the home equity loan together with my 1st mortgage into a much lower rate 15 year mortgage. It was a good choice in the long run. If you plan to stay in your house for a while, it may be a good option for you.
You don't want to help yourself badly enough to make the sacrifices necessary to climb out of this hole yet. Period.
If I was about to drown in debt, the last thing I'd do is worry about texting my friends and family members or giving up a cell phone package. Unless your cell phone is being used for business purposes that make you money, it is simply a luxury that you don't want to be without. Cutting out the cell phone is not going to solve your problems, but the attitude that you have toward the phone is indicative of the real issues which will keep you in this hole. Until you're ready to take action, we're all wasting time coming up with solutions to your problem.
Now, before you get mad and blow up I'd challenge you to read through my post again and really think about your situation. I didn't write this post to beat you up and hack you off. I wrote it so that you'd take an honest assessment of your situation and decide what you're willing to do about it.
I just don't see the point of paying a $150 early termination fee just to get a cell phone that going to cost the same amount as the plan I'm on now...
Ditching my phone, losing minutes, and losing my texting is not something I can do. I have no home phone, and I'm 700 miles away from my closest family member. Losing my communication with my friends and family is not going to solve my problems, it's just going to create more. And yes, my phone is used for business purposes. When I start the dog walking, it's going to be even more than it is now.
I know the point you're trying to make, but you also need to understand where I'm coming from. If I wanted to turn in to a hermit, I would, but it won't solve anything.
Don't sweat the car. If it's covered by warranty, just find a way to keep paying on it (refinance, if possible - what is the interest by the way?). Too many people on this forum are the hunker-down, self-flagellation types who think you're better off sitting home with raman noodles and such.
I would, though, ask for some help from relatives if they're expecting you to travel much.
Have you also considered the idea of taking a loan from relatives to cover you while you establish more income? If they're in a position to help, it might not be a bad idea. Be professional about it, agree to a nominal interest rate and draw up a proper contract.
Yes, the car is covered by a warranty, and insurance which will pay of the deficit should I total the car. I'm not worried about the long-term effects of having a car I can't afford. It's just hard to pay every month right now.
No, I can't borrow money from family members. Everyone is pretty much in my same position--swimming in debt. I don't blame my parents for my attitude towards debt, but growing up in an atmosphere of "gotta have it now" really affected me when I got out on my own.
I would suggest maybe looking at the event section of jobs on craigslist--I was able to start doing the samples at a local grocery store and would make around $100 post tax for working a 6 hour Saturday event--not bad at all--it's rather inconsistant but even if you only do one a month it could help.
Also as for groceries you could try dumpster diving (yes I'm being serious) or finding someone on Craigslist (or going to local flea markets) to meet up with people who have a 'connection' at the stores and sell things near date for super cheap. Just a thought.
The dog walking job is a good idea. You could watch some dogs as well if neighbors need to go on a trip. You can make a little extra cash and save them some boarding fees. There's also delivering papers.
If you are patient and are able to keep to a budget you should be able to get out. I know years ago in FL some dealerships had a program that they would pay off your loan if you bought a new car regardless of what you owed. It is a possibility that something like this will come up again (maybe!). If the oppurtunity comes up and it is legitimate, go for it. I would not trust craigslist. I bought a 99 Pontiac Grand Prix that had about 150,000 miles on it used. I have put another 50,000 mile on it and it's still running strong (keeping my fingers crossed), but we keep good tires on it and check fluids and change fluids on a fairly regular basis.
Do you travel just for family?
Do you text to friends and family?
I believe that what 8 SNAKE said about the phone usage is good advice. Again, not to be mean, but would it be better to voluntarily give up these luxuries or one day have them shut off. You can still communicate by land line and the computer and with letters.
The traveling "seems" to be personal. I know family is important, but they will understand and respect you for your decision to be more frugal. You don't have to completely stop seeing them, but cut out a few of the trips. Our family use to take road trips almost every weekend, but we have had to cut that out. Just for work and family needs (doctors, school, grocery shopping) we spend about $70.00 a week on gas.
I wouldn't cut out the eating out since you only do it maybe once a week. You'll need this to keep your spirits up, but buy foods on sale for when you cook at home.
I'm sorry about your credit debt. It is kind of stupid that they will only help you when you get behind. This happened to me with our house payment. I have no credit cards. If you have good credit and good payment history you may be able to get a credit card with little to no interest and consolidate your other credit cards.
First things first, like a lot of other people are saying... if you're truly in over your head, it's going to take some drastic changes. You didn't get in debt overnight, you won't get out of debt overnight.
1. Sell the car. This is not optional. Yes, you will end up with a loan without any assets to show for it. You cannot afford the car. Depending on your location/work/etc, you may not even need a car. You can walk, ride a bike, or take the bus. You CANNOT continue to travel for non-work purposes, use your phone, use skype or google video chat, etc. Your family will continue to live just fine without regular visits.
2. Cut up your credit cards. All of them. Go with the debt snowball. Be careful with consolidating your payments, if your interest rate ends up higher than of the individual debts... it's not worth it.
3. Sell your house and move into an inexpensive apartment (preferably that includes some form of utilities). Use the money you make on the sale, assuming you're not underwater on your mortgage as well, to pay off your debts.
4. Do not borrow money from friends/family even if you could... it will destroy your relationships.
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