Regarding the DOLP (Dead On Last Payment)

I recently started the DOLP (Dead on Last Payment) and the way it works is you enter what you owe on each card, what the minimum payment due is each month and then you divide the amount owed by the payment due and that is the DOLP. Then you sort the DOLP by the lowest number first and that is the credit card you apply extra payments to each month while paying the minimum due to the rest of the forms. The idea is that you’ll pay off the lower DOLP cards quicker.

My problem is that, some of the credit cards I have, if I pay only the minimum payment, then the balance goes up the next month. So, it all doesn’t make sense to me. Can someone help me with this please?

DOLP is referenced on Oprah’s site as part of her Debt Diet: http://static.oprah.com/download/pdfs/money/money_bach_dolp.pdf

I have several friends that used John Cummuta’s program and found it very useful. I personally like Dani Johnson right now.

Has anyone read his Transforming Debt to Wealth book? I have read a lot of pros and cons on Internet about his program. Primarily, I am just trying to learn techniques for bringing down debt faster. Here’s what I’ve learned, for example, from Dave Ramsey, etc.:

  1. Debt Snowball (either starting with smallest balance, or starting with highest interest).
  2. Using compound interest to your benefit by paying either every two weeks or every week, which saves a lot of interest.
  3. I downloaded an Excel file from this group that lets you plug in balance interest rate, and number of payments to see how long it will take to pay something off.

Does anyone know if John Cummuta, or other gurus out there, have other techniques” that can help get debt down a little faster?

Dealing with lying agent from credit card company

So I knew I was going to be 1 business day late on a card payment (due on a Friday). I called Bank of America and explained my situation. I needed to transfer money from one bank to another to pay it–because of my work hours I was unable to get to the bank to do that. I attempted to do it via the internet, but since the account was not yet set up online from my credit union I couldn’t do so. Had to go into the credit union to do that also.

At first the BOA person was rigid and cold with me, and told me to go do things on my lunch hour. I explained that I am a teacher and have no lunch hour (children are in my room with me at that time), and she softened (or so I thought). She got off the line for a minute, then got back on and told me she took care of things and I could pay it as soon as possible. I was able to get to the credit union on the next business day (Monday), transfer the money and pay the credit card bill online. The BOA person clearly said I would not be charged the late fee. The bill was due on the 12th (Fri.) and paid the morning of the 15th (Mon.).

So my new bill came today and lo and behold, there is a $49.00 late fee. If I call and complain, will it do any good? I am already strapped too thin and can’t afford to pay that on top of everything else. I thought if I contacted them ahead of time and worked out a payment that they would cut me a break–or at least stick by their word when they said they would!

I’m assuming that you’ve already taken care of this, since it looks like you posted in January.

Generally speaking, though, I always call and tell them what happened. The same thing happened with me this weekend with DirectTV. I called them last week to tell them that I needed to postpone my payment a few days until I get paid on the 5th. The guy said that I couldn’t change my payment date, but I could un-enroll in Automatic Payment, and then pay when I was able. I confirmed that the payment due at the end of Dec. wouldn’t be taken, and he said it wouldn’t.

I check my balance of my checking account on Saturday, and it’s negative, because the payment came through! I called, complained, and finally, they said that they would talk to my bank and reverse the payment.

They’re able to at least see that you called and there should be notes on what you discussed, so if this happens again, I say to definitely call and set them straight to (hopefully) keep them honest. I would call BOA and ask to speak to the executive resolution office. Or even better file an online complaint with the BBB which will automatically go to the executive resolution office.

Hi, I’m in debt up to my ears! Please help!

Also, sorry, duh, just saw your budget. Sounds like your income is low right now because of economy not choice, so yeah, part-time work would help. Even just delivering pizzas.

Agree completely with Jill. Your car payment is WAY too high. If you can, I suggest you sell the car and buy a used one. When my car got totaled last year, I went the used route and bought an 11-yr-old used VW in VERY good condition for $4K and it runs like a top.

Also, some of your other bills are way too high. You’re spending too much on gas, according to what you say your commutes are. My commute is 25 min one way and I spend just $100 a month in gas on average. And I live in L.A. where gas is pricier than in most other places.

Also groceries. Too much, especially since you can cook more in bulk when you have two people… make leftovers. I eat organic fruits/veggies and spend about $130 a month. What are you buying at the store? Can you make more from scratch, reduce meat purchases, etc? Use coupons? Shop sales?

You didn’t post any of your other spending habits. Is there any way to trim back on those? Stop eating out, purchasing coffee at work, going to movies, etc?

You also didn’t mention electric, but you can reduce that by a few bucks too by unplugging everything you can when not in use. Your TV, any side things like printers, sewing machines, hair dryers, etc. It will save you a few bucks minimum a month, maybe more (I cut about $10 off my bill just by doing that one thing). It sounds nuts, I know, but it does work.

Right now in the winter my hubby and I are making approx. 1960 a month. Ouch. Bills are as follows (for the month!):

  • Rent 500
  • Groceries 260 (barely enough!)
  • Oil Bill (every 6 weeks, try not to use unless we have to but landlord uses lots and high! we pay half, she pays half!) 250
  • Car Pymt 395
  • Car Ins 95
  • Gas 240 (my job is 15 min away, hubby’s is 10 min, car is non negotiable as no bus route runs near either of our works and we can’t rely on anyone for drives)
  • Debt 255 (MINIMUM mthly payments)
  • Laptop 85 (almost paid off, paid off in Sept of next year I believe)

That’s what I can think of right now. Almost all of it at least if not all of them.

Question about filing bankruptcy

I’ve been going back and forth in my mind the past year or more whether I should or should not file bankruptcy.

I finally had a friend give me someone to talk to that would be honest with me. His suggestion is that I find a place to rent, file bankruptcy in which he has someone that will work with my husband and myself every step of the way to get through this. He says in 2 years he can help us raise our credit score and help us finance our own home. Does this sound right? Does it sound like something that I could count on happening? He told me I shouldn’t feel bad about filing and that if I wanted to pay back the debt all I had to do is call up the place and pay them…? His last comment was since it was $15,000 debt that I was wasting my time looking for or going through a credit couseling service.

Is there anyone that can really give me some good-honest advice? It sounds to me like the person that I talked to has something to gain by talking me into filing bk. Don’t know, but thats the way it comes across. I think I need to talk with several professionals. Talk with 2-3 different credit counselors and 2-3 different bk lawyers and then go from there. personally I don’t think 15,000 sounds like enough to file bk over. Also, learn about filing BK without attorney here.

We filed bankruptcy back in October. The paperwork was not too hard. Download the pdfs from the bankruptcy courts’ site. We filed a waiver of filing fee and the judge approved it. We no longer have all of that interest to pay and we now don’t have to pay that $1800 per month in monthly payments and are holding our own.

As for paying back the debt, I would be more concerned about the small businesses we borrowed from such as for medical bills but not the big corporations as they don’t care about us people.

How to Clear Debt?

clear debtMy husband and I are in about $11,000 worth of debt. We barely have enough for our bills. I budget weekly and we are doing everything we can….but unexpected expenses keep popping up and it’s just really hard to get this debt cleared off! I’m feeling very frustrated and scared. What can I do? A man from one forum told me:

I’m with you! We were just making it and then due to unforeseen circumstances we could not pay our largest credit card bill this past month. I’ve been on the Dave Plan for almost 3 years, but have gone through my emergency fund for emergencies. I called Bank of America to explain my dilemma. They forwarded me to a debt management company. I spoke with them at length, they did an eval and quoted me a monthly payment almost $300 a month higher than what I am paying on my own. The reason? My credit is good, my interest rates are lower than what they can offer! They suggested I call Bank of America back to look into “internal hardship”. I did so, they looked and also said that I now have better than what they can offer me. Therefore, I have to wait for my credit to tank to get any help! And even then, it’s pretty much what I’m already able to do now.

If all goes well, I should be barely back on track now but will be unable to make up the late payment. You’d think they would just ‘reset’ the account after a few months. Nope. Both the DMC and BOA advised bankruptcy if I can’t become current. My credit score is a 728 right now. What judge is going to allow that to go through? Plus, I WANT to pay my debts. The stinking company just isn’t giving me any option!

So while I can’t offer advice, I can empathize! It’s awful! My credit score is a 728 right now. What judge is going to allow that to go through? Plus, I WANT to pay my debts. The stinking company just isn’t giving me any option! Just to clear some things up… the judge does’nt decide whether or not to allow a bankruptcy to go thru based on your credit score. Many people file bk with no late payments. You list all of your income vs all of your debt and if it doesn’t work that is what determines if you can file or not. Also I will add that the majority of people who file bk WANT to pay thier debts but are unable to. Sure there are a few who work the system, but the vast majority would much prefer to be able to pay thier debts then have to file bk.

Did either of you look into a Consumer Credit Counseling agency? These are non-profits that help people with credit issues. You can find one here: http://www.nfcc.org/

My husband and I got in over our heads with credit card debt. He had made some late payments, and they jacked our interest WAY up to the point we would never have paid these off.

The credit counseling place made a debt management plan for us. They took all of our credit card debt, and negotiated with each lender individually to get MUCH lower interest rates and how much we would pay each month. Our part was to close the credit card accounts and agree not to open new ones. The payment for the credit cards is transferred directly to them every month and they make the payments. Our monthly payments were much less than we were paying (remember that our interest was jacked WAY up) and we are paying the cards off much faster due to the low interest rates.

The whole program is completely voluntary and we can withdraw at any time, however our interest rates would go back to what they were before. It is also completely free – I think there is a tiny charge to us for them paying the cards for us – I mean tiny.

It has not damaged our credit score, however, it was something that didn’t look to good for us when we attempted to get a mortgage this year (on a second home, so it was iffy anyhow). We’ve been part of this plan for almost 2 years, and it is one of the best decisions we ever made.

I need a game plan!

game planI could really use some advice. We have 70K in credit card debt across four cards (3 Chase, 1 Bank of America). Most of that was to complete two international adoptions and to fix major house issues. Some of it was stupidity…well, actually all of it was stupidity. We should not have gone into such debt. I was thinking with my heart and not my head. (But not to do it would mean I wouldn’t have my daughters today. How to put a price on that?)

About 3 years ago, I completely revamped my budget to cash only using the Dave Ramsey Total Money Makeover. We did have a card balance of 90K, so have managed to pay down 20K of it. However, during that time I also had to finance a (used) car and our septic system required emergency replacement. So in actuality, my credit card debt went down 20K, but I incurred other debt to the tune of 23K. We’re pretty much right where we started.

We also have 5 kids, I work two jobs (one part time, one full time) and my husband is employed full time. He is going to be having surgery in a month and will need to be completely off his feet for 6 weeks. My job had a salary freeze, and his cut out 4 weeks of employment. All of this combined has made us unable to make the payments.

Right now we are current on everything, but I have paid down with our savings. We have $100 in the bank–that’s it–and next month we will be unable to meet the credit card bills. I have no way to buy Christmas gifts for the kids and getting food on the table is tough. I feel like such an idiot for putting my family in this spot!

I don’t know what to even do next. Should I call Chase and BOA and tell them what’s going on ahead of time? I am very worried about them calling my work or my kids. Because they’re older, I’m afraid the newly adopted ones will blame themselves for the situation.

I thought about making an appointment with Consumer Credit Counseling services. Can they do anything for me that I can’t do myself? Will Chase even work with them?

Right now my interest rates range from 7.99% to 11.24%. If they’d drop the payment amounts down, I might have a fighting chance. That’s about the only way, I think.

Should I use the cards to get a few Christmas gifts? Or should I just go delinquent on the cards next month and pay cash? (We keep it simple-3-4 gifts per child.)

Will they be able to even help me or am I talking bankruptcy? And what happens when my son wants to go to college in 2 years–how will I help him get a student loan?

I really want to pay this stuff off, but nothing seems to be working in my favor right now.

Thanks for any advice! I’m so scared and ashamed of myself.

Best advice for my situation

I have recently resigned from a position and now I am in a financial bind so to speak. When I took the job, my employer paid for three years of training up front (approximately $8,000) and now they want me to repay them. I was not given a specific timeline or amount to start paying back right away. The employer took my last two checks at applying about 1,000 off the top. Now, what would be the best course of action to pay this off? I do not wish to use my credit card or savings because it would leave me in even more debt. I have other financial responsibilities to think about. I am also in the process of trying to secure another position at this time.

In the past, my family and I have helped my husband. How do I get him to understand that he really needs to start stepping up and helping me through this very stressful portion of my life?

I am not down emotionally with the things that have gone on. As a matter of fact, I am taking proactive steps to secure myself as a potential employee with a great talent in my field. I am also trying to secure my financial future the best way I know how.

I hope I will find some info here – https://www.usa.gov/retirement, stil any help and suggestions would truly be appreciated.

Possible divorce and on disability

We got a question from one of our readers:

Any advice to the fact that I have been recently placed on disability and now possibly facing divorce and how to get the credit card companies to work with me on my fixed income and possible loss of husband’s income? I don’t want to file bankruptsy, but it is looking as if I might. I owe approximately 10,000. I live in Miami, Florida.

One thing people don’t realize is that even in a divorce or separation, debt collectors can careless (to some extent). All they really care about is getting their money and not hearing about personal problems. However, their is hope.

The first thing is to maintain at least the minimum balance until you can figure out how you’re going to pay things off. While avoiding bankruptcy is good, it’s not all that entirely life changing either. It actually gives you a fresh start, and by the looks of things you could file a Chapter 7 and be on your way in six months with a fresh start to life.

If however you have good credit that you don’t want to lose, I would pay the minimum, find out what the card companies can do to help you by calling them directly, and go from there. Also, make sure you find out how their methods to help you will affect your credit report if indeed it would. Then, like any other payment, set aside a certain amount each month (little more than the minimum) and have an end in sight. Ask them to help you calculate based on your interest rate how long would it take me to pay this cc off based on $xx.xx a month.

One thing to keep in mind is that even though you are divorcing, credit can still be ruined until your name is completely off your spouse’s debt. Thus, even if you hate him/her, you’re still responsible for their debt (as them as well) until all joint accounts are made separately. I would start there.

If your sole income is disability, creditors cannot touch that. It’s protected income. Work out a budget where you cover your four walls first (housing, food, utilities), then divide whatever’s left and send it to the credit card companies. It may be $5 a month. Send them written notification that you are divorcing and that your income will be disability only. Then, tell them how much you can send each month. (send the letter certified so you can prove that they received it) Yes, they’ll complain and threaten and not want to play nice, but they can’t do much else.

Bankruptcy isn’t as horrible as it’s made out to be. My hubby and I had to file back in 1999 (chapter 7). Since then, we’ve been able to buy four cars and a house. If you think that may be your only option, find a bankruptcy attorney who does the first visit free and go talk to them. Also consider taking out a payday loan – it may help you with urgent cash needs. In Florida we would recommend this company (payday-loans-florida.biz) – they have been around for 10 years and have a lot of great reviews.

The disability is a guaranteed monthly payment that they can garnish up to 35 %( like unemployment) of as I understand it which means they will be relentless in pursuit of this money. You are protected up to a certain amount of your income and assets no matter where it comes from or what you have then anything beyond that is subject to seizure or garnishment. That’s just how it was explained to me when we filed BK but I dont know the exact science of it all… I was told it was 75% or something that was protected as long as you fall under the ‘median income’ guidelines etc. I dont remember it all. BUT I have been told by others that if you have a guaranteed gov. check coming in monthly like disability or unemployment that they are aggressive because you are going to get that check and they can seize a percentage of it no matter what your situation. Again I dont know and maybe someone here does but I would be careful.

It’s the same for all states:

Social security benefits can ONLY be garnished for student loans, back taxes or child support issues. Credit cards are out of luck.

This is where people get confused. Disability is protected income but if you put it in a bank account for example and a creditor receives a judgment against you they can freeze that account and they often do this without warning. In some states those with these types of income are encouraged to separate accounts for wages that are protected and also garnishment laws are different state by state in terms of the amounts and what can be garnished etc. I think one of these articles mentions that in Florida the head of households wages-including earned wages are protected entirely. In the state of New York I think it said they can only garnish 10% of your earnings for example. Here where I live they can garnish up to 35% unless that amounts to be more then the federal law allows. Here are 3 links to three different articles that explain alot of things about garnishment in detail. Some of you might find them helpful.

http://law.freeadvice.com/estate_planning/asset_protection/protecting-wages-from-creditors.htm

Good luck!

Short Sale Question

Sale questionI am considering doing a short sale, and trying to weigh all of the ramifications and would like some advice or insight. We can afford our mortgage and pay our bills. Unfortunatley, our condo is a one bedroom unit, and I’m expecting in July. With the mortgage, taxes, insurance, homeowners assoc fee, and neighborhood fee, it’s close to $1,700 a month. If we are lucky we could rent it out for $900. Even if we lower the mortgage by a couple hundred dollars, it’s still not really feasible to rent. I really want out because the second hand smoke from our neighbor is out of control, and I don’t want my baby in that environment, plus it’s too small for three people.

We can’t do a traditional sale, we owe $176,00 and they are currently selling for about $110,000. If we do a short sale, how is that going to affect our credit rating. I was told only about 110 points. Is that correct? It’s only in my name, I bought before we got married, will my husband be affected? If anyone has gone through this I would love to hear their insights.

We are trying to do a short sale. The bank is taking forever to process our paperwork. We are current on our mortgage and all bills and was wondering if we stop paying our mortgage if that will help the short sale go faster. The reason we are using for the short sale is that I lost my job a couple of years ago and got a new one where I have to commute to another state. It now is no longer working to commute such a long distance. We owe more than it’s worth, and to rent comes no where near covering our expenses.

My friend told me: “It will affect your credit but I am not sure where you got the 110 points information. If your husband is not in the mortgage then it will not show up in his. Make sure if you do the short sale that it is a non-recourse and the bank does not come back at you for the difference. If the mortgage is strictly in your name and you do the short sale, then only your credit gets dinged and pretty bad. The note below is correct, make sure it is without recourse. BUT, when you go to make another home purchase and IF you put your name on it, expect higher than normal interest rates. The next home would almost have to be in just your husband’s name.” Is that true? Thanks.

Question about assuming new debt

Assuming New DebtWe are a self employed couple (22 years) in Maryland with nearly 200K in combined personal and business debt which we incurred when we moved our business to a renovated space on our property. The economy over the last 24 months has severely impacted our income and made servicing the total debt impossible. Despite many cost cutting measures we may be forced to file Chapter 7 for personal and possibly business debt.

We have met with one attorney so far and gotten a second opinion from a CPA who reviewed recent tax returns. We plan to meet a second attorney before making any final decisions. We have been advised by the first attorney that “by law” he can not advise us to assume any new debt prior to filing. We are in need of a vehicle and he knows that but has emphasized multiple times he can not advise us to take on new debt. Frankly his tone and his contract language beg us to read between the lines.

I have had a friend (also self employed) nearly file and they advise us to get a car loan before we file. Our credit is good, we are current on all loans and credit cards, but feel certain we are at risk of defaulting soon. If our personal debt alone is discharged our cash flow will allow us to continue our mortgage and other necessities as well as make a modest car payment.

My question is this, since we have applied for a mortgage modification as well, and our case is now in the hands of an agent, will applying for new credit before they determine our case be a big mistake? Does anyone else have thoughts on options? We do not own any assets of value that we could sell or we would have done it already.

We may or may not opt to file business bankruptcy as well. One of the businesses is owned 51/49 (woman owned) the other business is owned jointly. Both are S corps. The house and most of the credit cards are joint debt.

Thanks for your input.

update:
learn more about debt collection laws here – https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text and herehttp://www.federalreserve.gov/boarddocs/supmanual/cch/fairdebt.pdf (PDF document)

Spouse being persued for part of debt?

Hi, I am a newbie. I’m going thru a bankruptsy in OR, and the legal aid group asked for my x spouse’s details, age, name, etc..they sound like they are going to go after him. I’m going to do the full on request for hardship around college loans if I possibly can and the only thing I can think of is they could go after him for part of the interest that accrued on them during our marriage, has anyone experience with any of this?

Or could they go back over the divorce paperwork and go after him if they think it wasn’t fair. He apparently just wanted a green card, and left me in very very poor straights during the divorce, I negotiated with his lawyer, I was so poor and got only 2 grand and made him take his credit card debt from very man restaurants(excessive purchases of food to impress others as well).

All I know is that in my own divorce my ex accepted full, sole responsibility for a vehicle we’d bought during the marriage. He stopped paying for it and the people that held the debt garnished my wages. The only way I can stop paying for his van is to declare bankruptcy but right now this is my only real debt. But the judge set a monthly payment, which beats the weekly garnishments. The van was bought during the marriage and both our names were on the original purchase papers. No clue if this will help but this is my experience. Oh, and I’m in Michigan.

Any advise on consolidating?

I’v been looking into doing “debt consolidating” I have about 3000.00 in collections and another 3000.00 that i pay on time in CC and such that i want to clean up. Has anyone had any experiance with debt consolidating, or have any advise? Anything is appreshiated. ะจ know, that unless you are willing to cut all credit cards and swear to never use credit again and can keep that oath, DO NOT DO IT!!!!!!!! Let the voice of other’s experience talk to you. You will find yourself having consolidated your current debt into one nice, neat, little payment and start thinking, hey – I can buy that on credit. Next thing you know, you are back in the same boat, only there is more water inside the boat this time!

The only way to do it is to get rid of the credit cards. I had over 16,000 in credit card debt and went through a credit counceling place and with that those cards are closed and you can’t have a card through them again.

You just don’t have a lot of debt (although I’m sure it feels like you’re completely under water). You can totally do this on your own. To that end, you’re better off NOT consolidating. It will make your credit even worse because the first thing they advise you to do is stop making your payments. You have a couple of good options though.

1) Keep on keepin’ on with your current payments.
2) Call the collections co and ask to settle for a lower amount. This will only work if you have cash stored up to give them.
3) Call your credit card co and tell them that you’re in hardship. Ask for a lower rate.
4) Take out a personal loan from a credit union or an online place to consolidate gracefully.

I’m assuming that you’ve destroyed the credit card so you aren’t still using it. Right? :)

The good news is that you’re in charge at this point. The collections stuff has already hit your credit report so it’s not like you’re trying to prevent them from reporting. Use this power to your advantage. You’d be surprised how much you can do on your own. Google things like “work with credit card companies” or “how to settle a collection” and you’ll get some good advice.

I do not use any of my credit cards anymore, and my two bigger balance ones iv called and had the interest rates lowered. It just seems like I don’t get anywhere even paying much more than the minimum. I’m just trying to get my stuff straightened out the right way.

There is nothing to fear but fear itself

There is something to be said about, there is nothing to fear but fear itself…When we allow fear to guide us, we tend to make some poor choices. At this point you can’t afford this. I agree with qkjones, “get any job”, for more than one reason. Idle hands make idle minds! Alot of people do not take jobs below their pay scale for reasons that I don’t have time to get into. But this sets them up for more depression, lazyness, and increased spending. There are many organizations now that can assist you including churches, till you can get back on track. Dave Ramsey’s site is a good tool also.

The best thing is what you are already doing…seeking advise. Roman’s 12:2 Renew your mind and God will take you where you need to be! Praying for you and many more as we tread this economy.

God Bless you and yours!