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.

learn more about debt collection laws here – and here (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. Ш 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!

Another check in of a dedicated saver

Hi All!

I’m glad to see so many familiar names here! I was hoping that most people would just transfer over to this new list. I’m Debbie, wife to my great hubby Jeff and mom to Jaysn (12) and twins Joshua and Christopher (10). I’m a former special education teacher who taught in the public schools for about 12 years (some full time and some part time) along with teaching in a drug and alcohol rehab center and at a juvenile detention center. I now am a homeschooling mom and love it and the lifestyle that comes with it. We are a Christian Family who seeks to honor the Lord in all we do and that involves being good stewards off all He has blessed us with.

Our home is in a tiny farming community in Eastern Washington state. We love the lifestyle here with everyone helping each other out. This time of year that means getting phone calls from friends saying their cherry trees are ready to pick and so are the raspberry patches! We had already finished with our Lambert cherry tree, so we headed out to pick Bing cherries at a friend’s farm yesterday. Yummy! This is also the time of year that everyone is tending their gardens (including us), canning, dehydrating, making jams and jellies, etc.. It also means sharing all the lettuce you have in your garden before it goes to bolt in the heat! LOL! Our family is very active! Besides homeschooling year round, the boys taking swim lessons during the summers and playing other sports the rest of the year and trying to just keep up on the housework, we find ourselves with lots of other things to occupy our lives. We share our home with 2 dogs, 3 cats and about 12 fish (at last count).

Our home is tiny and we try to cram everyone and everything into it! LOL! We have strived to make our home a warm, inviting and welcoming place for friends, family and anyone who needs some love to be. We pretty much have an open door policy here. Friends come by all the time, I never know how many kids will be in and out of the house and yard at any time, and the phone is always ringing! There is always room for one or 2 more here for meals and to stay the night (from kids through adults). We are also very active in our church (about a 30 minute drive) and enjoy it and the fellowship we share there soooo much! I enjoy working in the baby nursery there once a month, singing in the choir, teaching VBS, reading budgeting and payday loans tips and being a table leader with my husband on Wednesday nights. My husband is an usher and table leader. Our kids are all active in the youth groups and love church!!! More important than that, they love the Lord! Our children enjoy writing songs. They will frequently write one and sing it while Josh figures out how to play it on the piano. Josh has a gift for being able to play piano by ear. He did not get that from me or his father! LOL!

Jaysn has a gift for writing both songs and stories. He also loves to write and illustrate his own comic strip. He draws beautifully free hand. Christopher is our clown! He keeps us all laughing with his humor. He and Josh also are our sports minded children. They can be found playing pick up games of basketball with people of all ages. My husband is a very loving and hardworking man. He is working construction for a dear friend of ours now and loves it. It’s hard work with long hours, but he is learning a skill that will help us to some day be able to have a large home. We really would like to be able to have a huge older home and open it up to incoming college freshmen that are away from their families for the first time and need a good Christian home environment to be in. This has been on our hearts and right now, our home is just too small to do it.

I really want it to be a welcoming place where they and their friend will be part of our family and yet have some privacy at the same time. God will make a way for this in His timing! As for me, I enjoy gardening, reading, cooking from scratch, spending time with friends and family, my pets (ok, so I call them my babies) and many other things! Our family is very close knit and I cherish the time that I have with my kids and husband. We really do all enjoy each other! We love to cuddle up for a good read or to watch a video together, make cookies or wontons in the kitchen, play board games or go to the park and play together. Camping is also something we love, but never seem to have enough time to do much of it. Now that I have written a book, I’ll stop! LOL! I need to go and rescue a plant from a kitten who thinks it’s just delicious!

Treasure trashing

Treasure trash, dumpster diving, curb picking…. no matter what you call it, we do it and it saves us money. I have found some great items at no cost whatsoever:

  • swivel desk chair
  • wood base lamp (even had a working light bulb in it!)
  • curtains for a large window that were still in the dry cleaning bag
  • small area rug
  • tie out stake for the dog
  • wooden crates
  • wood skids that we broke apart and used the wood for camping firewood
  • decorative curtain rods
  • hanging plant baskets
  • extension cords

That’s just what I remember off the top of my head. DD17 found the lamp and the swivel chair when she was 6 yo at the dumpster in the apartment complex where we had just moved in to. Let me tell you, that was one proud little girl as she rolled that chair up the side walk and proclaimed “Look what some idiot threw away!” We used the chair for 8 yrs and then sold it at a yard sale for $8.

In addition, I like to “put the word out” like Amy D. does. This has worked well for us. We got our computer desk that way from DH’s coworker that was liquidating his parents home after they went to a nursing home. Got twin beds that way too. If you are looking for something in particular, tell everyone you know to be on the lookout. It just may turn up.

We have used them

We have used the Priceline gas card and saved a good bit over a period of time.

The stations in our area were the cheaper stations and ones we used anyway. I feel like it is still a savings even at .04 a gallon (10 gallons = 40 cents), every little bit helps. On our list, the average price shown for our area is indeed the average price.

The only thing I don’t like is if you go over the number of gallons that you have paid for, you are charged the retail pump price and a service charge for exceeding the number of gallons.

Priceline gas card

Has anyone used the Priceline gas card? I got mine a couple of weeks ago, but have not used it yet. So far they are not saving me any money.

You have to pick three gas stations in your area… but they are expensive gas stations… It then shows you the “average” price for gas at those stations. Right now I’m paying $1.48 at the cheap place in town. That station is not offered at Priceline, but stations down the road are, and it tells me the “average” price is $1.56, so they offer me a discount opportunity of $1.51. Maybe if I was paying $1.56 that would be a deal, but since I have to go to the “fair” chance to just save .04 a gallon it hardly seems worth it.

I’ve also tried picking one station close to me, and two more that are further away but cheaper, and it averages out better… Still don’t save the “up to 20 cents a gallon” they advertise.. .more like .04-.08 cents. I don’t know if they will still let me get that price at the station near me though…