So annoyed to be in this position

iVillage Member
Registered: 11-28-1999
So annoyed to be in this position
8
Tue, 11-26-2013 - 4:46pm

A little back story--I got divorced 5 yrs ago.  At that time, we refinanced the house, paid off credit card debt and everything was fine.  I was actually pretty much debt free and things were going along well until about 2 yrs ago--actually I did have a car loan but when I bought the car, my credit rating was high and the payment isn't that big--I bought a Honda Civic, not a Mercedes or anything.  I know the problems started when I had to pay for my own health ins.  when I got div, the agreement was that my ex would keep me on his ins for free as long as he was paying for a family plan for his DD--theoretically that should have been until about 2 yrs ago at least because we both assumed she would be in college--well she dropped out of college in the 1st semester and since she didn't live w/ him, he couldn't keep her on as a dependent.  Since he only needed a single person plan (which is basically free from his employer) I had to pay for the family plan by myself--they don't give an option for a 2 person plan.  That was almost $700/mo.  Finally this year I decided I really needed to cut expenses so I switched to a lower cost plan that I pay for independently which is still over $500/mo.  Of course by paying for that big plan, I ended up running up credit card debt and that's a vicious cycle since I could probably still make my payments for everything else, but now you add on a few hundred $$ per month for cc debt.--now it's to the point where I am behind on 2 cards.

My income is kind of odd too--I get a basic salary but then my boss promises bonuses when we settle a case.  yes, I am a very underpaid lawyer--what I make is really what a paralegal should make.  Recently we settled 2 cases and I only got about $500 extra each--there is no set amount, it's basically whatever he feels like doing at the time.  I am hopeful that a very big case should be settled in a couple of weeks and if it does, then there's a possibility of getting a lot more.  In the past he has given me bonuses of $25,000 and $40,000 so on occasion he can be generous, but it's just not something I can count on.  Obviously I am looking for another job.  I have had a few interviews but nothing panned out--I have another interview next week for a really good job--$30,000 more than I am making now, plus benefits.

I keep trying to cut expenses but my 2 biggest expenses are mortgage and health insurance.  I am thinking I might have to cancel disability ins cause that's another $100/mo.  I hate to do that since if I ever got sick & couldn't work, I'd be really up the creek but I need the money now.  It's sad that I actually have a full time job and still can't make ends meet--and I am not extravagant either.  I also make too much money for any kind of assistance with anything--just over the line.

Community Leader
Registered: 07-26-1999
Tue, 11-26-2013 - 5:06pm
Welcome over to this little corner of IV! Not much advice, just support. It makes me chuckle at times, everyone always assumes lawyers make tons of money, but in actuality, while some do, the vast majority do not.
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Avatar for sabrtooth
iVillage Member
Registered: 12-03-1999
Tue, 11-26-2013 - 11:11pm

You should apply for Obamacare.  If you can't get on thru the website, find an insurance BROKER--not an agent or rep for a specific co--to help you understand the various plans and how the waivers work.  Several of my gf's ended up saving almost HALF their previous premiums, and were able to keep their usual drs.

You could also consider adding a second job that offers insurance to part timers.  Starbucks springs to mind, and I'm sure there are more.  It would help with both the insurance cost AND bring in extra money. 

Refinance, if your ratings is not too bad.  Even if it is, look into a HARP adjustment.  My dd was able to get a government refi even with both bad credit AND a condo that was under water.  Her payments went from $1200/ mo to $900/mo

iVillage Member
Registered: 11-28-1999
Wed, 11-27-2013 - 11:03am

I live in MA so we already had mandatory ins. before the ACA.  That's where I found my new insurance, through the state insurance exchange (that's why it went down from $700 to $500).  I still make too much money to qualify for the subsidized plans.  Right now I have heard that the state website is also a mess because of changes they had to make to be in sync with the federal plans but I am going to check again.  Oh and the plan I got also has a $2000 per year deductable, so I still can't afford to get sick!  Luckily I don't have any medical conditions.

I own the house w/ my ex so he would have to sign off on refi--it doesn't really  make much sense to refi when we are going to put the house up for sale in less than a year if there are closing costs but I could look into that.  We did a refi when we got divorced because my ex needed some cash to move & buy furniture (anything to get him to move out!) and the mortgage was based on my income alone (even though he co-signed) because his credit was worse than mine at that time, even though I had a lot of cc debt in my name.  I have no idea what his situation is now.

iVillage Member
Registered: 11-28-1999
Wed, 11-27-2013 - 11:08am

Here's an interesting thing that happened today.  I am behind on paying for 2 major credit cards--I have been avoiding phone calls but for some reason I answered my cell phone today even though it was an 800 #.  It was Discover.  I started off being kind of snippy when the woman wanted me to do a check by phone (I am $500 behind)--I said if I had the money I would have paid the bill--it's not like I have the money in the bank and just decided not to pay my bill for no reason.  So basically she offered a hardship plan that reduces my interest rate from 29% to 9% for a year and lowers the monthly payment.  So basically when I was paying my bill on time, they were punishing me by giving me a big interest rate, but then when you stop paying, they will work with you--that seems screwed up to me, but as a lawyer I also know that when people stop paying for a long time, and then if they have some money, cc companies will take a lump sum payment of less than 50%.  Of course that was not my plan.  If I sell my house, I would just pay off the debt--however, now that I'm thinking of it, since the interest rates are so high, maybe I will try to negotiate if I am making a lump sum payment--but I don't really want to have bad credit, so I was trying to keep up with payments.

Avatar for poorboy2011
iVillage Member
Registered: 10-02-2011
Tue, 12-03-2013 - 10:15pm

I am afraid I have nothing to offer but sympathy. It sounds like if you find a job with better benefits, that could make a big difference. Things could change in the blink of an eye for better or for worse, and I hope in your case, for better. 

I am guessing that you've already made a budget. It helps to keep track of spending with other people on the forum. There are weekly accountability threads, and I have found it useful to keep my spending under control, because it's easier to be frugal together than alone. So join in!

Community Leader
Registered: 08-25-2006
Thu, 12-05-2013 - 1:38pm

Hello my friend!

I had a similar CC situation several years ago.  And yes, it is screwy how often that you have be behind before they will help.  And you don't dare close it because of the hit your FICO would take.

Oh, and I also believe Starbucks offers health insurance at only 20 hours a week.  Probably not your plan A at this point in your life, but something to consider.

Welcome to my other "home" here on iVillage. 

Serenity

Serenity
iVillage Member
Registered: 02-19-1998
Fri, 12-06-2013 - 1:08pm

Wow that sucks!  I've been trying to get my interest rate down to something reasonable on Discover for years now. The VISA interest rate is a lot more reasonable and they have been pretty nice (amazing considering it's now BOA).

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Avatar for mahopac
iVillage Member
Registered: 07-24-1997
Fri, 12-06-2013 - 2:01pm

Hey musiclover - sorry to hear this is all going on.  That is very strange that you were able to get a lower interest rate, but take it, take it!  When I was seriously in debt in 2004, I tried calling credit card companies to lower my rates.  I forget which was the first one I called, but they told me they would not negotiate with an individual, and if I wanted a lower rate I would have to go through a nonprofit credit card counseling service.  That is what I did - I used Consumer Credit Counseling Services of New England, which was later rolled up into Money Management International.  What they did was take all my credit card lines and negotiate for better rates with each creditor.  They put all those debts on a 5-year plan, I paid them the monthly amount (plus $35 a month for their service), and they paid my creditors. It worked out beautifully and I was able to buy a house and a car while on the plan - just not add any more unsecured debt. 

I STRONGLY advise against dropping your disability insurance.  You are smart to have it already.  If you drop it and try to buy it later, it will almost certainly cost a great deal more.  For the $100 a month, it is simply not worth it.

Most of the people who are long-timers on this board know that I got out of debt by changing my career.  I was already scrimping so much and getting nowhere, plus we had no college savings, no retirement savings, and we didn't even own a house. The only really good option was to change jobs to one that would require a lot more for me and had a lot of upside.  I've never once regretted doing it. Now if I could just stop paying for school for three kids, I might have more to show for all that work, but that's a matter of my priorities.