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Money Problems


Luis

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I have massive debts, and the debt relief agency that I am working with expects me to pay $527 every month to them, so they can use it to pay off my creditors, after they negotiate with them to bring in some settlements. I can't do that because I don't make enough money on a consistent basis. Two paychecks ago, I made $710, but this past pay period, I made $450. I can't afford books for school, and I've been cut off from financial aid because I spent too much time without progressing. So, I won't be going to school this semester. The way I see it, I need a better job, so I could make more money, so I could pay off the $527 per month. But all I have is five years experience in food service, which, if it paid enough, I wouldn't be in this situation to begin with. I wish I could have an office job or something, with pay well over the minimum ($12 per hour here) and benefits, but I haven't had office experience since 2011. And I could volunteer in an office, but I don't have time for that, because I have to be available to work as often as possible, so that I could make as much money as possible! If I cut back on my work availability, all that does is guarantee me fewer shifts and less money, when I need the exact opposite! I suppose I could try to get a second job, and work at two fast food places, but having no days off would seriously make me go insane. I've tried that before, and I quit the second job pretty quickly. I already hate my job as it is, and if I've stuck with it, it's out of necessity, not out of love for what I do. Doing it 7 nights per week would make me mad.

It feels like I'm stuck in an endless cycle. The only thing I can think of to do is cancel the agreement I have with the agency, thereby saving myself from having to pay them anything per month, and then just accept that I'll have a massive debt that will follow me still. I will simply ignore the debt for a while, and use the money I get paid to pay things off that need immediate attention. Then I'll pay my debts off later, at my own pace. Unless I strike it rich or find another agency that can help, this will take me my entire life. It's an extremely depressing and debilitating thought, to think that I'll be working for years, to pay off creditors, instead of to have money for myself. I've become exasperated and exhausted by these thoughts, thinking every which way about what I could do to make this problem go away. It has set my life back by years, but that's the least of my worries right now. I am just trying to remain calm, whilst I devise a plan to liberate myself of this. 

 

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If you can't realistically pay it off then you may want to consider bankruptcy to give yourself some breathing room. You still have the option of paying your creditors voluntarily if your situation improves.

The other option, like you said, is to just ignore it. Once the debt is sold to the 2nd or 3rd collection agency you can usually get a bargain if you offer them a lump sum settlement. You do risk one of them trying to sue you though, judgments have a much longer statute of limitation and tend to look worse on your credit report than a bankruptcy. 

There are some people who'd tell you to just get 3 jobs and work 100 hours a week but that's stupid unless you can pay it off in a few months, any longer than that and you'll risk a burnout, particularly if your mental health isn't the best to begin with. Not something you want, I've been there and was completely unable to work for like a year, my body just went on strike and ended up getting severe panic attacks and depression so bad that I was suicidal for much of that time. Not fun and you'll end up with even more debt than before. 

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lonelyforeigner is right that bankruptcy might be a good option for you. I think you should at least look into it. You can google bankruptcy to find out about the process. I've also heard that some lawyers will do a one-time consultation for free. I've heard of people filing for bankruptcy on their own without a lawyer after educating themselves about the process, but I'm not sure I'd want to risk that.

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I'm on with the bankruptcy option. Just beware, as I did mine through a paralegal, and they gave me some really bad advice.

I had an okay job and a few credit cards. No big deal. One day, the IRS shuts down the company. I get a final check for $247. Long story short, I'm writing checks here and there, $5 for dry cleaner, $15 at the grocery store. This was back in 1987/88, so we didn't have online banking or alerts. The paycheck BOUNCES, I don't know about it, and Bank of America decides to try to process each check 3x per day, at a charge of $20 per check, per run.

Next thing you know, Bank of America sends me a letter saying that I owe them over $5,000 for bounced checks.

Bankruptcy is my only option. I hire a paralegal for a few hundred dollars.

The paralegal gives me bad advice: One of the things they said was to "make an attempt to return any merchandise that you've purchased with a credit card. This excludes clothes. I had a watch that I had purchased with a credit card for about $125, and a ring that I had purchased for $80.

I went back to the store to try to return these items. They would not accept the watch, and I can't remember why, but they said they'd be more than glad to accept the ring. All I had to do was fill out a form. I filled out the form and gave them the ring.

Then I went before the judge on the day of my "BK," as they call it. None of the creditors showed up to contest it, because it wasn't really worth it, and with the waive of a hand, I was debt-free.

Why the advice from the paralegal was bad: A bankruptcy goes away after some time, like 7 years. I was FIVE years past my bankruptcy, had a new job, and decided that I'd buy a car from one of those places that advertises. BAD CREDIT? NO CREDIT? BANKRUPTCY? NO PROBLEM!

Ooh, bankruptcy? No problem. I'll give that a shot.

The guy at the dealership comes back and says they cannot help me. He said the bankruptcy isn't the problem, but the voluntary repossession is a problem. Ah, that $80 ring, coming back to bite me in the rear end. He said, "With a voluntary repossession, we don't know if it's a cheap ring, as you say, or a mansion, or a yacht. We just don't know." I tried to argue that since it was "voluntary," it meant that I'm the kind of person who returns things that I cannot afford. 

That voluntary repossession stuck with me for just over TEN YEARS.

So if you go through a bankruptcy, DO NOT return anything. Ever.

There are situations where bankruptcy cannot be used. My ex poked holes in my condoms before we had "farewell sex," and it resulted in a child. Eventually, we went to court for child support. They base it on amount of time spent, her gross income, and my gross income. She fought for minimal time, which raised my cost. She lied downward about her income, which raised my cost.

Then the judge, after looking at my unemployed self, said, "I am going to base your income on what I feel you should be making, as a white man." It took me six years to get to a place where I earned that.

The judgment was for $700 per month. That money got drunk up by her alcoholic boyfriend, and our child never had his own bedroom.

Anyway, with that type of debt, you cannot avoid it. And even if you pay 99% of it, you're still delinquent. With the first offense, they take away ALL of your licenses. Drivers license, business license, fishing license... everything. With the second offense, they throw you in jail, where you wait 18 months while they try to set up a "speedy trial" hearing.

Then good luck finding a job with a jail record. Wash, rinse, repeat.

I had to struggle and really do without for six years, while trying to find my bootstraps. As a result, I've always been afraid to buy a home, because there will be a bump in the road and I'll lose everything. Minimal life, minimal responsibilities. But that's me and my fear.

The first story was to be helpful. The second story was a warning. Be safe out there.

Edited by LifeIsATemporaryDisease
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6 hours ago, LifeIsATemporaryDisease said:

The paralegal gives me bad advice: One of the things they said was to "make an attempt to return any merchandise that you've purchased with a credit card. This excludes clothes. I had a watch that I had purchased with a credit card for about $125, and a ring that I had purchased for $80.

That's really strange advice... AFAIK creditors can contest it if you rack up debt on purpose before filing for bankruptcy so going on a spending spree would be a problem since it shows malice but smaller purchases like the watch and ring should definitely not be a problem. Ridiculous! Why did it show up as a repossession though? Never heard of that happening...

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2 hours ago, lonelyforeigner said:

That's really strange advice... AFAIK creditors can contest it if you rack up debt on purpose before filing for bankruptcy so going on a spending spree would be a problem since it shows malice but smaller purchases like the watch and ring should definitely not be a problem. Ridiculous! Why did it show up as a repossession though? Never heard of that happening...

Indeed. I bought the ring and the watch back when I had my job and was making payments.

When I returned the ring, they had me sign a form. I thought it was just a restocking form, but apparently it was part of a "voluntary repossession." I can't recall any of the details about the form, as this was about 30 years ago.

I later asked someone about it, and they said, "You would have been better off keeping or selling that stupid ring. That's what you get for being honest."

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2 minutes ago, LifeIsATemporaryDisease said:

I later asked someone about it, and they said, "You would have been better off keeping or selling that stupid ring. That's what you get for being honest."

Being honest sucks, doesn't it? I lost my driver's license because I was honest when I tried to transfer it... I was foolish enough to answer the medical questions honestly which apparently is a big no-no in Europe. They wanted $1400 for psychological testing and when I didn't have that they revoked my driving privileges. Now I have to get a new license for a measly $2000 - $3000, never had an accident and never even got as much as a parking ticket and now I'm supposed to pay to practice with an instructor in the parking lot? Ridiculous. 

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  • 1 month later...

Thanks to all that responded. I took the time to think about it, and I have decided on filing for bankruptcy. I don't exactly know how to go about it, but I'll figure it out. I am tired of working to pay off creditors. My job is a really lousy one, but if I had zero debt, I'd have $800-1400 per month. That's mind-boggling to me. And the prospect of keeping that money after I file is very exciting to me. It will destroy my credit, but it's not like I have stellar credit at the moment, anyway, so I have nothing to lose.

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On 8/24/2017 at 4:16 PM, LifeIsATemporaryDisease said:

It sure does suck. I was raised to be honest, and was told that honest people always win.

Looking at the world, my parents did me a MAJOR disservice by instilling that "moral value."

I second this.

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3 hours ago, Luis said:

Thanks to all that responded. I took the time to think about it, and I have decided on filing for bankruptcy. I don't exactly know how to go about it, but I'll figure it out. I am tired of working to pay off creditors. My job is a really lousy one, but if I had zero debt, I'd have $800-1400 per month. That's mind-boggling to me. And the prospect of keeping that money after I file is very exciting to me. It will destroy my credit, but it's not like I have stellar credit at the moment, anyway, so I have nothing to lose.

That's a good decision, it'll make your life a lot easier and one of the most surprising things is that bankruptcy is often viewed less negatively by new creditors than a bad credit score since they know you won't be able to discharge new debt for another 7 years.

Keep in mind that filing for bankruptcy isn't free so you may want to stop paying your creditors for a few months to save up enough money for an attorney. Last I looked at it it was about $2K or so for the attorney and filing fees. I'd definitely spend that money on one since some creditors may try to object and you don't wanna end up still owing money because you didn't defend yourself properly or screwed up some paperwork. Best thing right now would be to just call up a local attorney for a free consultation and then have him/her lay out the next steps. 

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