Did debt consolidation work?
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| Thu, 07-07-2005 - 10:54am |
Does debt consolidation work for anyone? Did any of you try it? Did you consolidate but change your spending habits? Or did you consolidate and then go on a spending spree because you suddenly had empty credit lines?
We bought things after consolidating. Most things were needs, some were not. We started out oweing $160000 on our house because we applied a huge down payment. Then we got a home equity to pay off the trucks and a little cc debt. Probably about $50,000? And then decided that the home equity was a ridiculous product so refinanced the house yet again into one first mortgage. I don't want to even know how much those to loans cost us in closing costs. So after all said and done we are now sitting oweing $240,000 on our house, and $15,000 on our credit cards.
I am angry that we made those ridiculous choices. The solution would have been to sell the expensive truck and get a reasonable vehicle, or not since h drives a company truck 99% of the time anyway. Of course H did not want to get rid of the truck...
I guess I will not "forgive" myself until the cc debt is gone, and we are back to looking at only oweing $160,000 on our house.
Anyone other situations or thoughts on debt consolidation?
SHannon


Debt consolidation is a dangerous thing - especially if your home is involved.
All my best,
Danni
Hi Shannon,
First of all, just had to say I'm Shannon too! Secondly, my dh and i refinanced our mortgage, it was only 109,000, (our home is 180 years old and every single aspect of it needed renovated but it is in a great area, and dh is a carpenter so we thought he could do it, which is taking lots and lots of time:), that is why it was so cheap, noone else would have touched it with a ten foot pole!) anyway, after moving here we incured some credit card debt and had a car payment, and b/c when we bought it we had great credit but not alot of income at the time so we got a high risk mortgage with a really high interest rate, knowing that in a year we could refinance at a lower rate. But when we did that they included our credit card debt and car payment and closing costs, so it is up to 132, which feels like it has been the same # for 2 years! Anyway, we then jacked the cards up again to about 10,000 and though we were both working and making lots more money who knows where it all went, now i am a sahm for the last 2 months but more in control of my money then i ever have been b/c i dont' have a choice. We have about 5 grand in c.c. debt and some medical bill debt. I really don't know that i would ever refinance again, or at least not add anything on to it, i think it is a racket, and people think it is the easy way out but it just makes things worse. I now realize that i have to take a long hard look at my situation and deal with it rather then try to get out easy.
Shannon
Oh boy do we have a lot in common. Yeah are income was cut in half when I had my daughter and now only work part time. SO I can totally relate. Where do you live?
Shannon
Shannon
Hi,
I am in Ohio but we lived in Md for 2 yrs, I assume from your user name that is where you live/??? We lived in Cumberland Md, but moved back here b/c of family being here. Being a Sahm is exciting b/c i get to be with my kids, but also scary b/c it is new for me and i just hope ends will meet, and frustrating b/c i'm used to making money and now i'm not, i feel like i have no control- my only control is to not spend money. And my dh is on board but then he isn't on board as much as i want..... he is still spending some money on things that are needed but i would put off b/c i am nervous about paying all the bills and not using the CC's. I had gone from full time making over 30 thousand w/ benefits... to P/t when dd was born, to not working at all, all within less than a year so it is definitley a challenge and scary.
Thanks for listening! It's nice to know i'm not alone!
Shannon
Hello Shannon,
Yes I am in MD, but on the other side, near Bel Air. Working pt works for me, at first I did it so that I was making some money, now I do it because I really enjoy getting out of the house for a little while every day. I have a really easy job, with a really relaxed boss, so if I can't make it on a day its not a big deal. But I try to work every evening 4 pm -8 pm, with the exception that two weeks a year I work a full time week, 8-4 m-f.
I love being home with my daughter, although I never get things done at home. I play with dd, and this computer occupies lots of my time.
We consolidated our debt when I decided to go pt, and it was a manageable payment, but for the following 12 months still spent like we had the same income. So here we are paying off debt. But we should be done in 12 months, and then I will just use my small income, and my husbands part time job income to save. (he does not have to work the 2nd but he loves it)
At least thats the plan anyway...
Shannon
Hi Shannon,
Well I am envious of your pt job, i liked working and getting out of the house but i worked on the weekends sat. and sun. 2 - 8 hours shifts and one night a week for about 3 hours. It was driving my dh crazy because he had to watch the kids, it was fine for our older son but with the little baby he just didn't have the patience to work all week and then do it all by himself with her in all of his free time, plus he couldnl't work on the house with watching her, it was just too hard ( and i really was hating being gone EVERY single weekend) Plus we only have one vehicle that has enough room for both of the kids so he was stuck here all weekend b/c i had to take that car for work. But for alot of reasons i did not like the job anymore and it was a negative place to be so it was time to go anyway.... But i think as soon as we finish the renovations on our living room which will be in a few weeks i'm going to try to do some babysitting in my home for extra money, b/c i hate not making money.
In my ideal dream life i will be going back to school AGAIN next year ( i had gone back for awhile before dd was born, for like the 5th time) and finishing my teaching degree, I have the dave ramsey book and the mary hunt book on reserve at the library, can't wait to read, when i can get them. I think i will write down my goals again, seems like a good time to start working on them, it's been a long time, as far as where i want to be and what i need to get there.
It's been nice talking to you, we do have alot in common!!!
shannon
I have a friend that consolidated all her cc and used her car as backing. She said it was the best decision she never made. She said that when is was calling around for balances on her cards, so closed them right there and then.
Jenny
Jenny