Seems impossible

[Krisis]

We're so far in debt, it really seems impossible to ever dig ourselves out. Argh.

We paid off a credit card in February and a few teeny tiny ones last month, but it's still pretty bad. I have around $13K in student loans, and we have about $15K in medical debts. $10K in back taxes... a couple of credit cards... I think altogether we have about $55K in the hole.

We have a budget and try to stick to it but I'm not sure how successful we are. I used to be really bad about buying random stuff but I am trying so hard to get better about being careful. We don't use our credit cards, they are all cut up. We just use cash and debit cards (for gas, I hate paying cash for gas.) We just started paying tithing in November and I can't believe how it's blessed our lives, seriously. I think I will go post about it right now in one of the Church related forums :)

DH makes a good amount of money, but it's just that everything is due at once and it's so hard and scary and frustrating. Earlier this week we got a settlement offer from a credit card and I want to take it so bad but there's just no way, they didn't give us enough time. I've cut costs a lot and am trying to do even more, but it's so confusing. I'm having surgery next month and besides that, feel strongly that I shouldn't go back to work yet, not till my 3 year old goes to school (not this year.)

I don't know, I guess I just needed to vent a little. We were young and stupid stupid stupid, and then I got really sick with my pregnancy and there were lots of complications which cost lots of money even with insurance. I'm just scared that we're screwed. We have a goal to be out of debt within 3 years but it just seems so far away. :001_ssad:

[mirkwood]

It sounds like you are on the right path to correcting your debt problem. Paying tithing up front (I replied in your other thread too) is a must. My understanding of how to deal with debt is to pick one and go to work on it until it is gone, then move on to the next. Personally I would go after the smallest amount to make it go away first. Dave Ramsey has a lot of good advice on debt reduction as well. We have always been very careful with debt and only have had our mortgage and our car as debt. We never purchase anything else that we do not have the cash available for. I do have a couple of credit cards, but again, nothing goes on them that can not be immediately paid off. We never incurred anything else, so I can't offer any practical advice from experience.

[mgriffith]

There are a number of consumer credit counseling organizations available to help you.Consumer Credit Counseling of America is one I know works and I have recommended it to others in the past. They all were successful with the program. Look in your phone book or Google it for your area.

Basically how these programs work is they will make arrangements with your creditors for a reduced payoff amount. You then make a payment to the service and they handle the payments to your creditors. The service is usually free to you, as they collect fees from your creditors. After a few years on the program, you will be free of your credit debt. Cars and homes I think they cannot work with, but you should ask. You MUST make the payment each month, no late payments, no skipping, or you will be dropped from the program and the reduced payoff agreements go out the window, and your creditors will be on your doorstep again with renewed vigor.

I encourage you to use one of these services. They work and will make your burden easier to manage.

Mark

[hiccups]

The downside of consumer credit counseling is that it will negatively effect your credit rating. It's a trade off, but I just wanted to be sure you were aware of that. You might be able to do some of the same things they do by contacting your creditors yourself. With the medical debt in particular you could probably see a significant reduction.

[Gingersnap]

Just want to send you encouragement, you are headed in the right direction. Three years will go by whether you are making the needed changes or not. It's not the three years so much, it is the giant difference in your circumstances at the end of the three years that will bring you peace of mind and security. Keep up the good work, it is hard, but it is worth it!:hurray:

[Ligure]

I just wanted to add my encouragement as well. Every little bit of obedience is rewarded.
D&C 82:10
I, the Lord, am bound when ye do what I say; but when ye do not what I say, ye have no promise.

We have been counseled regularly to get out of debt and you are taking those steps. You will be blessed for it. We have been commanded to pay a full tithe. You have begun that and will be blessed.

Even if you can only take a baby step as your three year old was doing not too long ago, take that step, and then another, and another, and you will make it.

Think more about the blessings of the journey rather than the length of it and you will be grateful for the hand of the Lord in your life.

Ligure

[cHeroKee]

I like Dave Ramsey. Find out if he is on one of your local radio stations.

[Noahs ARK]

... I think altogether we have about $55K in the hole.

We have a goal to be out of debt within 3 years but it just seems so far away. :001_ssad:

Krisis ~ you aren't alone. We're right there with you from when hubby and I both had to quit work after he became disabled. We had to use credit cards to survive. There was no other option if we wanted to keep our house.

It sounds like you're doing a good job to get out of debt. Three years really isn't that far away. We can do it together cuz that's our plan, too.:blink:

[JuneGem]

One thing you mentioned is that everything comes due at the same time. That does make it difficult. Have you contacted your creditors to ask that they set up a different due date? Many will.

Additionally, keep in mind that if you accept a settlement offer, the amount that is "forgiven" will be considered income and you will be taxed on it at the end of the year. Granted, the tax will be much less than the "forgiven" amount, but many are blind-sided by that at tax time. It will also negatively affect your credit rating.

Hang in there! It takes everyone a while to find their way, but you are obviously on the right path.

[Krisis]

Thanks guys. Trust me, our credit rating can't get much lower, so consolidation / settlements aren't going to really make a difference in the long run :P

I think Dh talked to someone about consolidating all our kee-rap, but one thing that has kept us from getting other kinds of help is that he makes too much. Dang it.

DH's grandma passed away last September and supposedly had quite a large chunk of money left behind - large enough that each grandchild gets their inheritance spit out in "installments," when they turn 25, 30, and 35. DH will only be able to collect on the 25 one, but if and when we ever get it (they have to settle her accounts and also sell her house), that will go straight toward debt pay-down. Woo hoo!!

ETA: I like Dave Ramsey, but DH does not. He doesn't agree with selling off stuff or want to move into a cheaper place. So I'm focusing on what I can do with what I have to work with.

[jackmormon]

Just a few years ago I was in a similar situation as yours. I had no idea how I would ever get it paid off, but I've always been a faithful tithe payer and I did my best not to spend except that which was required. I gave God my 10% and all my effort, and I was blessed with some opportunities that have completely erased all debt except a mortgage. Three years really isn't very long, hang in there...