Really broke! In alot of debt.

Question

I just got out of school. I graduated in november we were living off my husbands family and no they are not helping since we have jobs. My husband has a part time job and he's a full time student and I have have a 27 hour a week full time job as a hairdresser. Our roommate moved out and we are stuck in a 6 month left over lease. Trying to get another roommate. ANYWAY. We are so broke our paychecks only barely make rent utilities and then my tips go straight to car payment and car insurance. We have no money for food. Going to get food stamps I didn't know how broke we had to be to get them but we are apparently really broke to them and to me I didn't realize it. I thought we were just blowing money but we aren't. There really is none! I can't pay any of our bills and they are all threatening us. I was going to file for bankruptcy for all my past debt since I haven't paid any of them in about 9 months. What can they do to me if I don't pay them?? We own nothing. My car isn't even mine. and everything we do have is his parents. And we can't file bankcrupcty cause he's joining the military in January when he graduates. What will they do if they sue me what happens I have nothing for them to take.

Answer 1

27 hours a week can't be full time...Also, how did you incur so much debt?

Answer 2

Amanda,

You can't get blood out of a turnip.  A lawsuit would seem to be futile if the defendant has no assets.  That fact is not lost on the courts, or the attorneys.

Likely you are getting the most heat from the professional dept collectors from the collection agencies.  Their job is to bully and harass individuals who owe their clients money.

This mess will pass, no matter how unlikely it seems to you today.  If you live in a larger city, check with the Bar association for agencies or groups that offer free initial consultations.  Some attorneys do this to assess whether they should take a case or not.  Its free advice and you should take it.

You never mentioned how old you two were.  You could be just out of high school, or college.  Just because you get sued means nothing, even if you lose, because the law forbids them to take any essential items you need to live.  You won't go to jail.  You will simply have a court judgment against you and if you come into money in the future, you can be asked to start payments again, or if you get full time employment, a lien may be placed on part of your wages.  Again, the court takes into consideration what you need to survive.

Sure, it's awkward.  But it's not the worse thing to happen to anyone, and you can eventually work your way out of this.  Don't panic.  This is one of those temporary setbacks life sometimes hands us.

Answer 3

you both need to work about 65 hours a week or more and pay off stuff from the small up to the big buy nothing but eggs potatoes and bread and pay it down now!

Answer 4

http://www.daveramsey.com/

Answer 5

1) be direct with the creditors. Explain the situation. They do not want you to file bankruptcy either. Most creditors will work out lower payments for some period of time. If you cannot work it out directly with them seek the service of one of those credit councilor companies. They negotiate directly with your creditors for you. I think using these companies still puts a blemish on your credit, but better then bankruptcy.

2) well they can damage your credit if you do not pay, plus interest will continue to add onto the debt. I also believe that they can garnish your tax returns once the debt is high enough.

3) If nothing is in your name they cannot come take anything.

4) Slow payer is better then no payer... pay something even if it's half of what is due.

5) once your husband enters into the military they can garnish your wages directly from his pay check. The military will not tolerate this and will allow them to do direct garnishments..

Depending on the situation you can even get discharged from military for not correcting your debts!!!

6) move into base housing.. save on rent and pay off your bills.

Answer 6

I remember this feeling all too well. I have been there and I thought things would never get better, but the good news is that it did. It has taken almost seven years of ups and downs to get on the right track. This is what helped me and my family. We started writing a budget. Simple enough right? I am going to write a sample of my budget to show you how I did it. Our income is better than when times were tough but still, it will give you an idea. This is for a one month period (I have a family of 7).

Income $3600

Living expenses:

Rent 550

Electric 300

Garbage 100

Groceries 800

Phone 50

Total 1800

Transportation:

Car payment 200

Insurance 150

Gas 500

Maintenance fund 50

Total 900

Income minus necessary expenses: 3600-(1800+900)=$900

This number gives me something to work with for on things like luxuries, our cell phones $100, Gym membership $55, piano lessons $30, satellite $55 which add up to $240. Giving $660 to be used for paying old debts (hospital bills,) spending, and savings.

Write yourself a budget like this. Separate needs (living and transportation) from wants. Be brutally honest about which is which and about whether there is any way to reduce the amounts. After nine months you likely have already been reported delinquent on the other debts. This does not mean you shouldn't pay them but put them in the right order of priority. Pay all necessary expenses first. If you have any money left over at all when you subtract expenses from income, apply all of it to your your debt. As long as you pay each creditor something, even $5 a month, they will not likely sue you. By the way if they do sue you they can garnish your wages until they are paid back so you don't want it to resort to this. If you can pay each creditor a minimal payment and have any more left over, apply all of that to the smallest balance owed. Do everything in your power to eliminate that debt then move to the next smallest and so on until you are all caught up. Now if you do your income minus expenses and have nothing at all left over, you are going to have to make some serious changes and that may mean taking a second or third job or doing some side jobs until times are better. Do not try to borrow your way out of debt. You will only sink further. You can also talk to churches and various charitable groups that may provide some temporary relief like groceries, a gas card, or one-time assistance with bills. Your local Department of Health and Human Services likely has a list of people that can help you. Also try Angel Food Ministries for groceries. You pay $30 and get enough food for a family of four for a week. If there are only two of you (?) two of them should last a month. Good luck.