New to board and frustrated
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| Thu, 01-06-2005 - 6:09pm |
Hello,
I am new to this board and I am unsure of what to do next. I know I have put myself in the situation I am in but now I do not know how to get myself out. Virtually ALL of my bills are past due..some a month, some 2 or 3 months. I have gotten to the point that if I pay all of my bills I have nothing left between pay periods. When I completed my budget, I found that my expenses are more than my income.
What got to me today, is one of the bills that was 3 months behind, I actually made a partial payment on in December and I checked my bank account and the check had not cleared. The person (who was very rude) received my check but was going to return it because it was not the full amount due. I asked her why she would do that and she said it was there policy to return partial payments. I have never heard of a company that did that and wanted to ask any of you if they can do that. I do not know how to catch up my bills other than taking a part time job which I have no problems doing but I would need one that I could work during the week because I already work on the weekends with this job.
So I do not know what to do....please any advice that you have would be appreciated.
Pat

The first step is figure out how to get your expenses to be less than your income.
Do you have cable? Cancel it or reduce it to basic cable (I have heard the most basic is $10 per month, but I cancelled mine all together so I don't know). If you have a cell phone, cancel your home phone (I pay $12 per month and only have it for emergencies, no voicemail or any services, and if I did make an outgoing call I'd pay per minute, but I don't make any). If you don't have kids, just plan on living off cereal and pasta for a couple months. Don't buy your lunch on the go, always pack one and take it with you. Call and get a quote for car insurance and see if you can save money that way (I just switched from Geico to AAA and it will save me $540 per year). Getting a part-time job is a great idea, but these are things you can do today to start reducing expenses.
Once you have your expenses less than income, then you will have a little money each month to catch up on bills. Once you do this, you know you can pay everyone the current charges for this month. So for example, if you are behind on your electric bill, pay the current month charges now and worry about the back charges later. Go through yours and make a list of who you owe, how much, when it's due and how behind you are. Then prioritize them. Try to pay as many past due amounts as you can, catching one bill up at a time. Don't send 1/3 of the past due to three different people, send the whole past due amount to one (this will avoid the partial pay problem you encountered, I don't know why some companies do that).
Here is a link to my budget spreadsheet if it helps:
http://messageboards.ivillage.com/n/mb/message.asp?webtag=iv-mljournal&msg=1861.9
This is all the first step. Once you get the income to expense ratio fixed and prioritize your bills, then you will be ready to start a small emergency fund and paying down any debt. You can do this!
I had a credit card company (of all things!) do that to me once. They absolutely refused to take anything but the full amount. Go figure. I cancelled them, but we were in a position where we could do that.
I agree with the second poster - try to stay rational and prioritize the bills you have. It *is* possible to get things under control, but you have to be willing to stop some poor habits you might have. That's where we always get caught up. :)
Good luck!
Hi, Pat, welcome here. I can tell that this all feels overwhelming and scary right now, so just remember to breathe!
One of the things that I do know (from real experience) is that you have to (read that again, lol) have to have to take care of the BASICS first. By this, I mean, pay the rent/house payment; buy food (nothing too fancy); pay utilities; and the car payment/gas for the car. Even though this runs counter to everything you've ever heard, this is the first step. If you can do this, then you can start to deal with everything else. Will those creditors scream? Yup.
To get everything current, you said you'd get a second job. That's a good plan! Also, selling anything/everything you can on half.com (books, movies, music, games, etc) or ebay (darn near everything), you may be able to get a good start on it all.
If I were in your place (and I have been), I would write every debt down-it's not a whole bunch of fun, but needs to be done. Once you do that, you'll begin to see where to begin. Prioritizing the bills is good-pay the basics first, then figure out how to do the rest. Do stay in contact with the creditors, even when all you want to do is bap them with a big stick. ;)
If you're behind on the utilities, can you ask to be put on a hardship plan? Or get assistance somehow?
Some of the resources that I have used to help me are a couple of books that I tend to recommend over and over just because they explain things much better than I can do in one post. One, by Jerrold Mundis, is good nuts and bolts about how to go about digging yourself out of the hole. The name of that is "How to Get Out of Debt, Stay Out of Debt, and Live Prosperously." He details how to deal with crabby creditors (which that woman totally sounded like!) and how to build a good plan. The other plan, which my DH & I have followed for over a year now is "Financial Peace Revisted" by Dave Ramsey. He's good at explaining a 'pro rata' budget, which is basically how to pay everybody you've got to pay with the money that you have.
I know that if you keep posting, others may be able to help you too. Hang in there-it's scary now, but it does get better!
~Lisa
~leanne
~leanne
deciding to be happy doesn't mean that everything is perfect, but that you had decided to look beyond the imp