6 job losses, $65K in cc debt

iVillage Member
Registered: 08-29-2008
6 job losses, $65K in cc debt
15
Fri, 08-29-2008 - 10:45pm

The situation: In the last 3 years, my husband and I have had a combined 6 job losses (layoffs

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iVillage Member
Registered: 03-17-2003
Sat, 08-30-2008 - 12:09am
Well it sounds like you've done the best you can to economize and streamline.
iVillage Member
Registered: 11-17-2007
Sat, 08-30-2008 - 9:52am

what kind of

Avatar for meandmypea
iVillage Member
Registered: 03-27-2003
Sat, 08-30-2008 - 12:18pm

CCCS looks a heck of a lot better on your credit report than bankruptcy (and you'd have to go to CCCS anyway if you did file bankruptcy), and according to FICO it does not affect your FICO score.

http://www.myfico.com/CreditEducation/WhatsNotInYourScore.aspx

FICO scores consider a wide range of information on your credit report. However, they do not consider:
* Whether or not you are participating in a credit counseling of any kind.

Anyone can justify any expense that they do, but a few hundred dollars on 2 vacations a year (even done on the cheap) seems like a few hundred more than you can handle right now.
If you feel like you need to go away somewhere, go camping. Or just take a day trip to a state park.

"The only thing we have been guilty of is probably eating out too much, but even the counselor said we could probably only cut back about $200 a month."
--You were spening more and can only cut out $200 a month or you can only go down TO $200 a month? Either way, you can do better. Eating out was a budget buster in our family too, especially since we're on the run with 3 kids in school and sports, but we have managed to get it under control. We give our family an allowance of $10 a week & stick it in an envelope. If we want to go out to eat somewhere, we save up the money and pay for our dinner in cash. We make menus and cook ahead of time for the week to make sure we don't have the "I don't feel like cooking, let's just order a pizza" problem. It takes extra planning and a willingness to do it, but it's possible. And going out to a restaurant is so much satisfying and feels more special when you know you've earned that meal out and don't have the burden of paying for your dinner at Applebees with 10% interest for the next 5 years. ;)

We also switched to getting our groceries at Aldi, and our grocery bill has dropped by 50%. I'm not exaggerating. We were spending $900 (!!!) a month for me, DH, and 3 kids, and for the last 2 months we have knocked it down to $400-$450. No, it's not pretty inside, but I find the Aldi-brand food to be better tasting than store brand Kroger or Store brand Wal-Mart. It's not dollar store crap. And that extra $400 went straight to my debt reduction.

I hope you and your DH are able to find a job soon. Good luck!

Bridget


Bridget
iVillage Member
Registered: 04-26-2007
Sat, 08-30-2008 - 8:23pm

I agree with meandmypea, the CCCS does not affect your credit scores negatively. Bankruptcy would be much worse. I just started with Money Management International. They are great. They will give you a free counseling session over the phone. They have lowered my interest on all the cards...we owe around $70k. They told me all the credit report will say is that we are using a debt management plan. It's neutral, not negative. And if you try to get some kind of loan, the place will usually just require a letter from MMI to let them know what's going on and that you are paying your debt.
I've heard Dave Ramsey is good, but sounds like he's not too knowledgable about the CCCS.
Suze Orman and Quicken both reccomend CCCS.

Please look into MMI.

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iVillage Member
Registered: 04-26-2007
Sat, 08-30-2008 - 8:26pm
Thank you for the link about the Fico score...it was very helpful. I feel even more confident about going with a DMP.
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iVillage Member
Registered: 08-27-2008
Sun, 08-31-2008 - 11:07am
I would give you a hug, if I could.
I related a lot to your post. I have had to stop denying to myself that I did not have a compulsive "frittering" habit, of shopping online and spending small amounts that added up more than I wanted to know, and am trying hard to change that.
But, like you and your husband, we have had the downsizing, and consulting jobs with no health coverage, and are now struggling under about $30K in CC debt, and $50K in medical debt, that we pay about $1500 a month on.
We have old paid for cars, and spend nothing on haircuts, etc., have minimal cable, etc. so that, you struggle to try to figure out a solution.
I was advised by someone to call up our credit card companies and tell them we couldn't make the payments, and get them and the interest lowered.
But, my husband is job hunting as well, and we feel that we need the "good credit report scores" for jobs, and we "need to have the lines of credit available" in case we have to relocate, and need to use them to pay for that.
I had heard that, as long as you paid the "new lower monthly payments, on time and in full, as agreed", your credit report would not be adversely affected, but I am concerned that our line of credit would be cut to nothing, and then, if my husband got a job offer that required we pay for relocation we couldn't do it.
I had heard once, advice that said, that the CCC did affect your credit reports, about as badly as a bankruptcy did, and that the bankruptcy would get you out from under the debt more quickly and back onto your feet, whereas the CCC would damage the credit reports and you'd still have a lot of debt to pay off.
I have not done either of these things, and therefore, do not have personal knowledge.
I feel like we are in a "similar situation", in that we are serious overextened, but have great credit scores due to always having paid "on time and in full".
I was told to cut up the credit cards and then contact a CCC place and get everything "fixed" by them, but have feared the scores being affected and the lines of credit cut. So I have felt "frozen" by fear of making a mistake.
We have two family members who did bankruptcies and now have good credit and own homes, etc. and I know other people in the group I was in, the Don't Debt group, who say they also filed for bankruptcy and now have good credit only a few years down the road.
But, when you are actively job hunting, and may have to finance a relocation using the charge cards, it is scary to think that if you do something "wrong" it could mess up your chances in either area.
Only one other thing. We recently got copies of our reports, and they have to tell you, if anyone has "looked at them". According to ours, no one had, at all over the past several years, when potential employers had serioulsy looked at my husband. So, although we had heard, also, that employers tend to look at them, what we saw in our reports seemed to say that of the, maybe four or five companies that had been interviewing us, not one had looked at those reports. So, maybe not that much of an issue????
For now, we are just struggling to try to cut back spending futher, and see if we can't "win" this thing that way and possibly relocate to a less expensive place to live.
Good Luck. I think, your situation and ours is one that many people are in right now.
iVillage Member
Registered: 04-26-2007
Sun, 08-31-2008 - 1:58pm
I would like to say again that the CCCS groups do not hurt your credit. Please go to the link that was posted on this thread about your FICO score. People shouldn't be afraid of the CCCS groups because you are still paying off your debt with them, and with bankruptcy you are not.
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iVillage Member
Registered: 11-17-2007
Sun, 08-31-2008 - 2:42pm

If your husband makes it to the short list and he is applying for really high paying job yes they look and it does matter Your credit report proves that The company that looked was very interested in him.. They did on my son all the time when he was looking.


Second if you want to save a little money on the moving sell almost everything you own before you go. If you really know you are going within the next 6 months I would start selling things off now.

iVillage Member
Registered: 08-27-2008
Sun, 08-31-2008 - 2:52pm

I believe that you are correct on this, as someone in the Don't Debt group had told me, which makes sense, that, "As long as you contact your creditors early, before you have defaulted on anything, and ask them to lower your monthly payments, then as long as you are paying the new mutually agreed upon amount, on time and in full, then, nothing "bad" will go onto your credit rating."

The advice that I had read to the contrary, I had read elsewhere, and it advised the bankruptcy, simply as it got people out from under the debt more quickly.
Two members of our family have gone the bankruptcy route and now, a few years down the road, have their lives "in order", with good credit and have bought houses, etc.

I also, tend to feel that, I pay *all* of my debts, and at some point, if we manage a relocation, and find that we cannot make the payments at the amounts previously agreed upon, I would see about calling the creditors up to get the payments lowered.
The creditors still make money on you, and lose nothing, with a reasjustment, as they will collect interest off of you longer.

My reason for not going this route right now, is that, my concern is that using the CCC or calling to ask that payments be lowered would almost certainly result in any available credit for us, being cancelled, and if we need to do a relocation, we then would need some credit to use for that.

I had heard that you can make the calls yourself. I suspect, that with so many people presently, often through not fault of their own, in serious debt, getting help from CCC groups is probably not viewed as seriously as it used to be.

My husband has applied for many jobs over the past several years, and according to the credit report agencies not had any of them check his credit reports, for whatever that is worth.

I did not mean to make you feel that I was saying that you were wrong about that. I was just quoting what I had read in a financial magazine. Things may have changed since I read that, or it may not have been correct.

Sincerely, Linda

iVillage Member
Registered: 04-26-2007
Sun, 08-31-2008 - 3:18pm

We kept 2 credit cards off of the debt management plan with the CCCS we went with. You don't have to put all the cards with them, but the ones that do go through them will be closed. But, you will have lower interest on the ones that go with them.

Good luck

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