It was my husbands birthday last night and we usually would go to a really nice restaurant to celebrate. Since we are savings as much as we can, I had to become a Gourmet Chef, normally we would spend about $90-$100 for dinner, this would include the wine and tip. So what did I make:

2 NY Sirlion $14.38 at $7.49 lbs.
Bone In
Bernaise Sauce .99
Baked Potato 2.00
Greek Salad 2.00
French Bread .99
B-Day Cake 5.49
Pinot Noir 8.99

I tried something new with the steak. I had a jar of steak seasoning someone gave to me, it had salt, garlic, pepper, red pepper, dehydrated onion, in it, its a Canadian mix purchased at BJ's. So I took the steak seasoning and pressed it into the steak on both sides, then I got a pan very hot with olive oil (by getting the pan super hot, it seals the beef and keeps in the juices), I put the steak in and let it brown on both sides, then turned the heat to medium for about 4 minutes on each side: these steaks were about an inch and a half thick. While the steak cooking I made up the bernaise sauce from the package directions. When all was ready I served the steak on a plate with a touch of bernaise sauce (just like the restaurant does, beautiful presentation), we had baked potato and salad (romaine lettuce with black olives and a touch of shredded parmesan cheese with a oil based greek salad dressing) and bread.

It was so delicious, my husband kept commenting on how good it was and even said it was better than what we had had at our favorite restaurant. Nice dinner and all for under $35.00 - This was a splurge and I know I could have saved more, but after all, it was his birthday!

I have a home that was built in 1970 and I will be trying to sell it again when spring hits. The problem with my house is I've updated most of the home during my 25 years of living here, but I have never changed the kitchen cabinets, which are hard birch and in good repair. They are dated and need a face lift and could make or break a sale. The last time I priced cabinets they were about $5,000, I can't afford to put in new cabinets, so I researched my options online and decided to redo my cabinets and breakfast bar by painting them and putting new brass hinges and hardware on them. I made a visit to the Home Depot with my plan at hand.

I purchased two cans of paint (Behr for Kitchen Cabinets with a satin sheen finish), a can of primer (Zealer 1,2,3), sand paper, a hard wood putty (Miniwax Wood Filler), new gold tone hinges and hardware and I spent $222.17. These items should be all the materials that I will need to complete my project.

I am having a family luncheon in mid February, so my goal is to have the project done by then. I have half of my breakfast bar done now and it looks much nicer and really brightens the kitchen, but I'll save a picture of that for later since I have it all tore apart right now.

I've attached a picture of what the cabinets look like now, so 1970ish!! When my job is done, I will post a new blog ... I'm very excited and can't wait to get this done, maybe this weekend!

I couldn't sleep again tonight so I got up and decided to cook up a fast batch of my signature chili. It's cold out today and I thought it would be nice to have something hot and a little spicy to eat, so here it is:

1 lb. ground beef
2 19 oz. cans red kidney bean
1 29 oz. large can tomato puree
1 14 oz. can cubed tomato chunks
1 t. garlic powder
1 t. black pepper
1 T. salt
1 T. oregano
1 T. Basil
1 t. cloves
1/2 t. red pepper flakes
1/2 cup brown sugar

Brown the ground beef in a pan and drain off the fat, put the ground beef into your crock pot, add all other ingredients and let simmer for two hours and its ready to serve, sprinkle some shredded cheddar cheese on top if you like and serve with rolls. It's a delicious and hearty meal.

I guess what made me start to crave some chili is a recent joke that I found on one of the forums. My chili is not from Texas and obviously will not compare because it is tasty and mild in spice, but you need to read this joke and see what could happen.

A Texas Chili Contest

Warning - If you can read this whole story without laughing out loud, then there's no hope for you.

Note: Please take time to read this slowly. If you pay attention to the first two judges, the reaction of the third judge is even better. For those of you who have lived in Texas, you know how true this is. They actually have a chili cook-off about the time Halloween comes around. It takes up a major portion of a parking lot at the San Antonio city park.

The notes are from an inexperienced chili taster named Frank, who was visiting from Springfield, IL.

Frank: "Recently, I was honored to be selected as a judge at a chili cooking contest. The original person called in sick at the last moment and I happened to be standing there at the judge's table asking for directions to the Coors Light truck, when the call came in. I was assured by the other two judges (native Texans) that the chili wouldn't be all that spicy and, besides, they told me I could have free beer during the tasting, so I accepted." Here are the scorecards from the advent: (Frank is Judge #3)

Chili # 1 Eddie's Maniac Monster Chili...

Judge # 1 -- A little too heavy on the tomato. Amusing kick.
Judge # 2 -- Nice, smooth tomato flavor. Very mild.
Judge # 3 -- (Frank) What the hell is this stuff?! You could remove dried paint from your driveway. Took me two beers to put out the flames. I hope that's the worst one. These Texans are crazy!

Chili # 2 Austin's Afterburner Chili...

Judge # 1 -- Smoky, with a hint of pork. Slight jalapeno tang.
Judge # 2 -- Exciting BBQ flavor; needs more peppers to be taken seriously.
Judge # 3 -- Keep this out of the reach of children. I'm not sure what I'm supposed to taste besides pain. I had to wave off two people who wanted to give me the Heimlich maneuver. They had to rush in more beer when they saw the look on my face.

Chili # 3 Ronny's Famous Burn Down the Barn Chili...

Judge # 1 -- Excellent firehouse chili. Great kick. Needs more beans.
Judge # 2 -- A beanless chili, a bit salty, good use of peppers.
Judge # 3 -- Call the EPA. I've located a uranium spill. My nose feels like I have been snorting Drano. Everyone knows the routine by now. Get me more beer before I ignite Barmaid pounded me on the back, now my backbone is in the front part of my chest. I'm getting pie-eyed from all of the beer...

Chili # 4 Dave's Black Magic...

Judge # 1 -- Black bean chili with almost no spice. Disappointing.
Judge # 2 -- Hint of lime in the black beans. Good side dish for fish, or other mild foods; not much of a chili.
Judge # 3 -- I felt something scraping across my tongue, but was unable to taste it. Is it possible to burn out taste buds? Sally, the barmaid, was standing behind me with fresh refills. That 300-lb. woman is starting to look HOT...just like this nuclear waste I'm eating! Is chili an aphrodisiac?

Chili # 5 Lisa's Legal Lip Remover..

Judge # 1 -- Meaty, strong chili, Cayenne peppers freshly ground, adding considerable kick. Very impressive.
Judge # 2 -- Chili using shredded beef, could use more tomato. Must admit the cayenne peppers make a strong statement.
Judge # 3 -- My ears are ringing, sweat is pouring off my forehead, and I can no longer focus my eyes. I farted and four people behind me needed paramedics. The contestant seemed offended when I told her that her chili had given me brain damage. Sally saved my tongue from bleeding by pouring beer directly on it from the pitcher. I wonder if I'm burning my lips off. It really pisses me off that the other judges asked me to stop screaming. Screw those rednecks.

Chili # 6 Pam's Very Vegetarian Variety...

Judge # 1 -- Thin, yet bold vegetarian variety chili. Good balance of spices and peppers.
Judge # 2 -- The best yet. Aggressive use of peppers, onions, and garlic. Superb.
Judge # 3 -- My intestines are now a straight pipe filled with gaseous, sulfuric flames. I pooped on myself when I farted and I'm worried it will eat through the chair! No one seems inclined to stand behind me anymore. I need to wipe my butt with a snow cone.

Chili # 7 Carla's Screaming Sensation Chili...

Judge # 1 -- A mediocre chili with too much reliance on canned peppers.
Judge # 2 -- Ho-hum; tastes as if the chef literally threw in a can of chili peppers at the last moment. **I should take note that I am worried about Judge #3. He appears to be in a bit of distress, as he is cursing uncontrollably.
Judge # 3 -- You could put a grenade in my mouth, pull the pin, and I wouldn't feel a thing. I've lost sight in one eye, and the world sounds like it is made of rushing water. My shirt is covered with chili, which slid unnoticed out of my mouth. My pants are full of lava to match my shirt. At least during the autopsy, they'll know what killed me. I've decided to stop breathing; it's too painful. Screw it; I'm not getting any oxygen anyway. If I need air, I'll just suck it in through the 4-inch hole in my stomach.

Chili # 8 Karen's Toenail Curling Chili...

Judge # 1 -- The perfect ending, this is a nice blend chili. Not too bold, but spicy enough to declare its existence.
Judge # 2 -- This final entry is a good, balanced chili. Neither mild, nor hot. Sorry to see that most of it was lost when Judge # 3 farted, passed out, fell over, and pulled the chili pot down on top of himself. Not sure if he's going to make it. Poor fella, wonder how he'd have reacted to really hot chili?

Well now I'm ready to start my day. Have a great one.

With all the news about the Feds dropping the rates (and it's not over yet), people are being encouraged by the media to refinance. I've seen several and heard several news clips about refinancing your mortgage.

While for many people who have high interest rates,this is a good idea. If you can shorten your term and keep your payments manageable, that is a huge savings. If you can even refinance your current mortgage and keep it on track and save money, that is a good thing too.

When deciding to refinance there is a mathematical way to determine if it is right for you. In my state it would generally cost about $2,300 to $2,500 for the average borrower, with no points. Closing costs must be considered when determining if there is a savings. Generally I take the current payment on their existing mortgage and multiply that by the remaining amount of payments. Otherwise borrower has 240 months left at $500 principaland interest (240 x $500 = $120,000). Then I take the new proposed mortgage and multiply the payments by the amount of months to pay, and add the closing cost and you will have the savings. Example would be 240 months at $350 plus $2,500 closing costs (240 x $350= $84,000 + 2500 = $86,500; savings $120,000 - $86,500 = $33,500). Then we decide if it is worth it? If it is only a few thousand dollars it would not be worth it.

I get concerned when a client comes in with a slew of credit card debt and they want to put it into their mortgage to make monthly total debt more comfortable. Otherwise, take unsecured debt and make it secured and jeopardize your real estate. Unfortunately, most customers that choose to do this usually come in two or three years later in the same situation again.

My feeling is that if a customer can get an unsecured line of credit to clean up their credit cards and can stick to a plan to pay off that line, they should not refinance into their mortgage and secure that debt.

Lets face it, many people live paycheck to paycheck and if there were a major loss in their life; loss of income, death of a spouse, illness and etc., they would most likely be in financial trouble. If you get in trouble financially you want to pay your mortgage first keeping a roof over your head and providing for you and your family. If you have piled all of your unsecured debt into a mortgage, then you are paying it all and may have put yourself in a worse position.

If your financial position went bad,so bad you had to file Chapter 7 bankruptcy because your income was lost or you lost an income in your household; divorce or the death of a spouse, you would not get the financial relief of wiping out the unsecured debt that gives you a "fresh start" if it is wrapped into a mortgage and secured by your real estate.

I have heard how things are economically across the country, but what I know best is what goes on here, I live in a very rural area were unemployment is the highest in the state, poverty lives here and we have a food shelf in every town to provide for the needy. Most people here have a combined income of about $40,000 to live on. We have one of the best assistance programs in the country offering affordable housing, fuel assistance, health insurance and etc. We also offer education programs to get people off assistance. For the average income, houses sell from $80,000 to $150,000, but most people I work with are living from paycheck to paycheck and have very little savings. Our state offers 100% financing on a primary residence if your credit score is 660 or better and you have had at least three tradelines (auto loan, credit card, student loan and etc.) and have paid as agreed,to low and moderate income borrowers and the state program will pay their closing costs.

Most of these clients have nothing to fall back on since they have no savings generally. They will not be eligible to refinance for about five years, they have to wait until their equity is there. So five years later when one of these clients come in with a stack of credit cards and want to refinance, I feel it is a major step backwards, putting unsecured debt on to their home and jeopardizing their financial position,when you know that one major event could put them into bankruptcy and they would not get the relief they could have gotten because their unsecured debt is hidden in their mortgage. Now the relief they could have had is gone and their mortgage payment is higher, maybe too high to pay, and they end up lossing their home in foreclosure.

That is why I feel it is my professional responsibiity, in my business, to caution each and every client that tries to refinance their unsecured debt and make it secured against their real estate. Do not do it if you can avoid it, it is usually just a bandaid that allows you to continue spending out of control and I will see you again in another five years. Being in this business for 22 years, I have a list of habitual debtors that come back time and time again.

Give them the knowledge to make a decision and sadly, many still want the refinance. Unfortunately, you cannot borrow your way out of debt, I know that better than anyone else.

These are just my thoughts on the subject of refinancing and I know there are many responsible people out there that know how to handle their finances. I'm not trying to offend anyone, I'm just trying to make an awareness of the situation.

Many lenders will not go through this exercise with their clients, they just let them do what they want without any advice because it brings in money to the bank. I guess this is my personal advice for people who are spiraling out of control in debt. Fix the problem, don't continue it by refinancing your home.

Bad things do happen to good people and you need to think through your debt restructure plan and see if is a bandaid or a fix.

Yesterday the Fed implemented two emergency rate moves in response to the continuing weakening of our economic outlook and the tumbling of the world markets. The Fed Rate and the Discount Rate were both cut by .75 bps bringing the Fed rate to 3.5% and the Discount rate to 4.0%.

So what does that mean to you the consumer? Fed Rates impact the prime rate, auto, credit card and home equity line of credit rates. First mortgage rates will also respond to a degree. The Discount rate impacts the cost to banks to borrow directly from the Central Bank, thereby making money less expensive to borrow for them. This can help banks increase profit by giving them cheaper money to lend for business loans,mortgage loans and consumer loans.

The market is still anticipating a further reduction in the prime rates of .25 bps to .50 bps, which will effect any loan tied to the prime lending rate; usually commercial loans, some consumer loans and eventually it will trickle down and effect mortgage rates.

Did this help? You bet it did, the Asian market has rebounded this morning. Will it continue to stimulate the economy? Only time will tell as it still appears investors have concerns about recession and global market stability.

Don't look at your retirement investments right now, they are most likely going down and you are losing money. This is the same thing that happened with 911, but people did recover.

Regarding the extra rebate this year for low to moderate income families; the Government is planning on having that in your pocket by the end of May or June according to the morning news. This rebate is expected to stimulate the economy as well and give people a little relief.

I'm curious to see how all this will affect the mortgage rates in the next few weeks. Of course my hope is that consumers will have more confidence and start buying homes and refinancing their current high rate mortgages and positioning themselves while the rates are low. Many people do not realize that they can do a streamline refinance if they have had a good payment history, a streamline requires no new appraisal and no income verification and lenders just put them through to give a better rate. Mortgage rates for a 30 year rate were as low as 5.625% APR yesterday, this was in the Northeast Region, generally they are lower out west and south, finally a rate we can live with.

I had some good news today, I was reviewing my tax information and have found that I'm getting back $5,000 in my income tax refund; I'm still waiting for some tax forms for mortgage interest and etc., but I looked them up on line to rough out my taxes. So now I can look at possible funds available to settle debt:

$22,000 Family Loan
5,000 Income Tax Refund
2,000 Loan Repayment
3,300 Hardship W/D
7,000 Sale of Used Car
5,000 Projected Savings
& Misc. Items Sold
$44,300

Finally, my Ace in the Hole is my loan against my retirement, if I have to settle in June I will have $18,000 available bringing the total to $62,300.
Assuming the debt creaps up to $150,000 and I can settle all his at 40% ($60,000), I would have enough for now, then later I'll need money for the IRS. I'm still not getting a clear answer from the''m on 1099C reporting. I've had two different answers so far and it basically comes down to the IRS and what they think.

When reading the guidelines it says that if a creditor forgives a debt, they must report it that year. However, the IRS says that if they do not write it off that year they don't have to file the 1099. Further, she told me that if I get the 1099C two years from now, that would be the point of settlement and I look at my insolvent position at that time. Otherwise, after I get everything resolved, then I get a 1099C and I'm no longer insolvent, I would pay tax because the credit card company didn't write it off yet. I believe that if I get a settlement in writing and I write a check, that is the point of settlement (the effective date the transaction occurred). I would fight this with tax lawyer. I don't think any of what she said made sense. So further would not give me a direct answer on "fair market value" on a home at time of settlement, says town has a value, I have a value and an appraiser has a value and the IRS would look at any documentation I had and decide. So the whole town was just assessed by a professional company and they came into my home, I would consider that an accurate figure? Oh she didn't know, only an audit would tell for sure.

I asked her if I could report 1099C cancelled debt withou a 1099C? Definately not, you have to wait for the issuing creditor. Even that doesn't sound right, I have read that if you do not get a 1099C you are still obligated to report it as income. So no real answers just more confusion.

I had an interesting call from Bank of America yesterday, I know I said I wasn't going to talk to them, but after they threatened to send me to collection, I figured I'd see what that meant. Well she just went over my scenario then she said she would let everyone know nothing had changed and I was still working to get together some money. Within an hour of her call, they called three more times last night. I didn't answer the phone because I had programmed it not to ring and it was on my caller ID and they left no message. This is not going to be good. Numerous calls a day from all these creditors jamming up my phone.

So good news, not so good news and confusion. Tomorrow is another day!

On a credit report, when you settle debt for less, it has a very similar affect as Bankruptcy 13, except it doesn't follow you around as a public record for seven years.

I am choosing to do Debt Settlement because I ethicially feel it's the right thing to do under my circumstances. Yes, it would be much easier to just file the Bankruptcy 13 and I wouldn't have the added tax implications of "cancelled debt", but I would be in a five year plan;five years of my life on hold making payments to a trustee and answering to the same. Also, everyone in town would know my situation as well, bankruptcies are published in our local paper, there wouldn't be a bank in town that would hire me. I think it will be much easier for me to just settle up this mess and move on and maybe no one will find out.

I have spoken with an attorney about what I am doing. He of course wants me to file bankruptcy and has asked me not to settle with anyone until I speak to him first. He advises that the credit card companies will only get pennies on the dollar if I file and etc., etc. If I fail at settlement and end up being sued, I will probably be forced into bankruptcy for protection and I'm praying that doesn't happen.

I'm finding it very difficult to deal with anything else in my life with all this debt hanging over my head. There is not a day that goes by that I don't think about it or talk about it. This has been going on since last October, when I realized my work was not going to change, the housing market was not going to rebound and my sinking ship was going down. The more you make the more you spend and your debt is higher as well. I never planned on this economic disaster. It is true that "it is not the hard times that will get you, it is the good times", living beyond your means and living the good life will destroy you financially when the bad times come. I certainly earned this and should have known better and planned better. I guess I needed to learn another one of those lessons of life.

In my community I am a highly respected professional, no one would have any idea the mess I am in. When I'm out and about and I see another business person and they start talking to me about how everything is going and how is my business doing; I usually just tell them everything is great, but inside myself I just think about the horror of my situation and pray they never find out, that no one finds out that a professional like myself, got herself in such a mess.

In my business head hunters are always calling and making offers for me to go work for them. There is one in particular that has been after me for three years. I haven't heard from her in about 9 months and I know it is due to the declining housing market, but I know that when things pick up she will start calling me again and will make an offer for me to go work for her; sign on bonus, commission tiers and etc. If I accept, the first criteria is for them to pull my credit; that is considered character in my business. I am so screwed I can't even change jobs, I'm stuck where I am and if my employer finds out about all this, I risk losing my job with them. Although we have very little work right now and I am only paid on performance (you can't work if there are no customers), I could still be let go because of my credit. My once 700 plus credit score has crashed to below 500 I bet, I don't really know because I don't dare to look. Legally they would not come right out and tell me why I was being let go, they would just eliminate my position or something, I know how this works. Several years ago a very nice lady in a bank I worked in, filed joint bankruptcy because her husband's business failed, the powers that be kindly took her aside and her job was eliminated. A small community where everyone knows everything and bankruptcy is published in the local paper.

I've been struggling not to fall into depression here, but with the long winters here, the lack of work and my obsession with my debt, it's very hard not to. I never sleep through a full night anymore, I don't do much outside of the house and I really don't have a lot of energy right now. All classical symptoms of depression. Well now I can tell the credit card companies that not only have I lost my income, I'm now mentally ill; maybe that will help my case.

Guess I'm just having a bad day here and anyone who is in my position or has been, will understand. Sometimes you just need to ramble on. I think I will go cook something ... I love to cook.

The first thing you need to do to plan your weekly meals is get out the sales fliers for your local food chain. So this is my grocery list for the week based on current sales and a family of three:

3-4 lb. Beef Shoulder Roast
5-6 lb. Roasting Chicken
4-5 lb. Ham, Butt Portion
1 10 lb. bag of potatos
1 Large bag of baby carrots
1 box white rice
1 bag of dried green peas
10 cans of veggies
Loaf of Bread
Bagels
2 Freacetta 4 Cheese Pizzas
1 c. pineapple slices
1 bag brown sugar
1 lb. of cream cheese
1 Dozen Eggs
1 lb. butter
1 bunch Banana's
1 bag of apples
Coffee
Creamer
1 Gallon Milk
Box of Cereal
Sliced Cheese
Rolls in a bag - keep refrigerated to preserve.

For simplicity sake we will assume that you can have eggs, bagels, toast or cereal for breakfast and fruit along with your coffee.

For lunches you can have leftovers to make a sandwich or just eat leftovers and add some fruit. My husband always takes leftovers to work with him so he doesn't have to spend money on the road and he has a microwave at work. I work at home so I eat leftovers as well. My son eats school lunch.

Dinners:

Day 1 - Beef Roast, Potatoes & Carrots

Wash and scrub 6-8 medium potatoes and put them in the bottom of a crock pot, put in desired amount of bagged carrots, wash your beef roast, salt and pepper and put on top of veggies in crock pot, pour one cup of water in the crock pot. Put on the lid and turn up to high for about two hours then turn down to low-med for the additional six hours. It is delicious and you will be able to cut it with a fork. Save all the juices from the crock pot and put them in the refrigerator in a sealed container.
(You can make small slits with a knive in the roast before cooking and add small cloves of garlic to enhance flavor).

Day 2 - Beef Stew & Rolls

Cube up remaining beef, potatoes and carrots. Take the juice you saved from the refrigerator, skim off the fat, put the juice and the cubed veggies and meat into the crock pot, add a can of cubed tomotoe pieces. Add an additional four cups of water and spices to taste; I usually add some basil, garlic powder, salt, pepper and a little red pepper. Turn crock pot to high until it begins to boil and then turn down to med for about an hour. Makes a hearty meal if served with rolls. (I sometimes add 1/2 cup barley and a cup of sliced mushrooms to this stew).

Day 3 - Roast Chicken, Baked Pototoes
& Green Beans

Turn on oven to 350 degrees, plan on 20 minutes per pound. Wash and prepare your chicken in a roasting pan. Salt and pepper the chicken, add a 1/2 cup of water to the bottom of the pan, put cover on and start baking. Wash and stab a few potatoes and place them in the oven about an hour before your chicken is done.

Open a can of green beans, put in microwavable dish and warm for about two minutes in the microwave add butter, salt and pepper to taste.

Day 4 - Chicken Rice Soup & Rolls

Boil your remaining chicken from the day before in about six cups of water, until the meat falls off the bone.
Using a colander placed in a another cooking pot, pour contents of boiled chicken into the colander. Put the broth into a crock pot, let the chicken in the colander cool then sort through it and put what meat you choose into your broth in the crock pot. Add a can of corn, can of green beans, can of cubed tomatoes and 1/2 cup white long grain rice add spices to taste (I usually add some salt, pepper, basil, poultry seasoning and garlic powder), turn crock pot onto high until it begins to boil, then turn down to med for an additional hour. Serve with rolls.

Day 5 - Ham Roast, Rice & Corn

Turn oven on at 350 degrees, plan on 15 minutes per pound if it's a precooked ham.

Put Ham in Roasting Pan, add 1/2 c. water to bottom of pan. With toothpicks, put pineapple slices on the ham and save the juice. Cover and put in the oven. When there is only a half hour left take juice from pineapple, add 1/4 cup brown sugar and 2 T flour, stir well and cook on the stove until it thickens, take your ham out of the oven, and spoon the mixture over the ham and put back in the oven to cook for the remaining half hour.

While the ham is cooking, put two cups of water in a large baking dish with 1 cup of rice and 2 T. butter. Put in the microwave for 15 minutes. Make sure the pan is high enough so the rice won't boil over into your microwave.

Open canned corn and warm in microwave in a microwave dish for two minutes and butter, salt and pepper to taste.

Day 6 - Friday Night is Pizza Night

Cook two Pizzas in the oven - I like to add sliced mushrooms, black olives and onion to my pizza. You can add whatever you like - maybe ham and pineapple from the night before (save out a couple of slices of pineapple and slice ham thinly).

Day 7 - Pea Soup and Rolls

Prepare your dried green peas per package directions, cube up a cup of ham, cube up some baby carrots, add an onion (optional) - simmer until done and serve with rolls & Butter.

There are always lots of leftovers at our house so there is plenty of food. A larger family would obviously have to increase the amount I prepare.

I go through the sales flyers weekly and take advantage of all the buy one; get one free sales that my family eat. Many times, beef, pork, chicken, ham, bread, bagels, butter, juice, and etc are buy one; get one free. I freeze the extra items. I buy canned veggies, chopped tomatoes and puree when it's on sale at the price of 10 cans for $10.00. I buy rice in a four pound bag for $4.49 and store it in a plastic container for easy access. Potatoes are constantly on sale here with the buy one; get one bag free. The list goes on and if you are vigilant and use coupons, the savings is even higher.

It is worth the investment to buy a small chest freezer, I bought one at Home Depot for $165.00, I've noticed them at the same price at Walmart. Also, regarding paper products, laundry supplies and cleaning products, I usually watch flyers for Walmart and buy them in bulk when they are on sale.

Last night I received a call from Bank of America. They called to advise me that my account was now being transferred to collection (I thought I was in collections, they are calling almost daily). They further advised if I could give them $$$$ they would not send it to collections.

So I'm thinking to myself, this person is doing their job so I'm going to be real here. I tell the guy that if I had the money I would have paid my payment, I explain my financial situation and my lack of income. I further explain that I can't sell my home and pay them because my house is worth what I owe, a company that big and one that deals with mortgages, has to know about the housing crisis (they are buying Countrywide; what is up with that?).

I advise him I'm totally insolvent, owing more than I'm worth, I further inform him that I will be getting assistance from family and etc. to "settle" my debts with them. I advise him that I have consulted with a bankruptcy attorney and that is an option, but because of my strong convictions to pay what I can, I will settle with them at a later date.

The gentleman I spoke with was very nice and told me he was sorry to hear about my situation and wished me the best. He said he was following policy transferring my account to internal collections and he also said that later on I may be able to settle.

I then had a conversation with him about the IRS rules about cancelled debt. I told him that the lawyer had encouraged me to file bankruptcy because of the tax liability associated with cancelled debt and that with the state of our economy, I would think that the major credit card companies would lobby to eliminate that tax because it discourages people trying to settle their debt and this must be affecting the credit card companies and the number of filings people are doing (Bank of America was one of the biggest advocates for changing the bankruptcy laws and they lobbied for the change). He eluded that there may be other tax benefits to the credit card companies when a person files bankruptcy? Hmmmm, never thought about that.

With all the talk from the politicians about reducing tax and etc., you would think with all the foreclosures and credit issues people are suffering today, the cancelled debt tax would be eliminated, a good place to start instead of cutting tax for the rich.

To those readers who do not know about this tax, if you have debt that is forgiven, you will receive a 1099C and you have to claim this forgiven debt as income. Otherwise, if I have a credit card for $20,000 and I settle for $5,000, I will have a 1099C for $15,000, which I am to count as income on my income tax forms that year. However, if I am insolvent, meaning I owe more than I'm worth, I can file IRS form 982 and not be taxed on the 1099C to the amount of my net worth. Otherwise, if I owe $100,000 and I only have $50,000 in assets, I do not have to claim the first $50,000 in 1099C income. The flip side of this is if you file Bankrutpcy, you are exempt from the tax (doesn't that encourage bankrutpcy for many people?)

Well the wheels are rolling now and it will still be several months before I can settle. The credit card companies raised my rates from 2.99% to 29.99% and they are charging over limit fees of $39.00 per month and late charges of $39.99 per month, really trying to help me out here. Most credit cards will not settle until you are at least 120 to 180 days delinquent. I need the time to save money and pull things together, but there is a part of me that just wants this all over now. I can't imagine how much I will owe when I get to settlement, probably at least $150,000 - it scares me just writing it.

I've been debating with myself as to whether or not I want to blog about my debt. There is embarrassment and shame associated with having $133,000 in credit card debt, but I'm hoping that maybe writing about this situation and trying to resolve it will make me somehow feel better and that it may help others in this situation.

How I got to this point comes from at least nine years of being a single parent, making a good income and thinking that I could just keep spending. I put two kids through college, bailed out a failing business and have helped numerous friends and family members through some financial problems. I've been more than generous with my children and have charged on my credit cards like there is no tomorrow, thinking there would be no problem paying it back. Then the inevitable, the housing market slowed to a crawl and my income is commission and it is connected to the housing market and real estate. This year alone my income dropped about 45%, when you have two houses with mortgages to the tune of $280,000 and $133,000 in credit card debt, something has to give.

I have charged my credit cards to the max in 2007. I've been unable to keep up with my expenses without borrowing from my cards. Both of my cars broke down with repairs of $6,000, and one was involved in an accident, another $4,000, my house needed some serious repairs to the septic system and I needed to paint it to get it ready for sale, and my income declined. So here I am, I've maxed out my credit cards, I don't have enough money coming in from my job to pay all my monthly bills and I have to find an alternative to bankruptcy, before I cash in all my assets just to make monthly payments. I don't know when this market will turn around and my income will be more stable, but is commission ever stable?

I've researched it all and I've decided that debt settlement will be the best option for me. I've talked to three debt settlement companies and with their fees, it will take me longer to get out of debt. Also, I really think creditors want to talk to their consumers and I can do anything a debt negotiator can do. However, they do have more experience and they settle large amounts at once, which probably makes them more of an expert, but I need to do this myself because, as it is, I don't have all the money I need to be swift and successful with this and with a debt negotiator it would take me longer to settle and the longer it takes, the more chance I have of being sued. Although I want to avoid being sued, there are worse things in life, but publically it would be very embarrassing.

I have consulted with a bankruptcy attorney and I could file Chapter 13, but that process would take five years and I really want this over in one year and I don't want to live with that on my public record for the next 10 years. It could affect my future employment opportunites because I believe that if you have had a bankruptcy you can never get bonded?

How do I plan on taking care of this in one year? Right now I'm thinking I will have to borrow against my 401k - I think I will have about $19,000 available by June in a loan and a $3,300 hardship withdrawal. I've been able to borrow $22,000 and I am going to try to sell my second car and some personal belongings for about $7,000 in the spring. I'm thinking I will get a tax refund of about $3,000. That still isn't enough money, I'm figuring I'll need about $65,000. I'll have to try to save an additional $5,000 by June. I tried to get a home equity but was denied because of a low appraisal. I figure waiting and negotiating will take a total of six to eight months so I have some time to do the things I need to do and hopefully the car will sell and etc. It's pretty much up in the air right now. My goal is to have this credit card debt behind me by the end of 2008.

Regarding the houses, I've been able to rent one house and that pretty much covers the mortgage payment, taxes and insurance. The house I'm currently living in is going up for sale after June. If the housing market doesn't turn around, I will not be able to sell it and I will have to live here another year. My mortgage is an adjustable rate mortgage, interest only and that scares me. I took out a five year ARM about a year ago thinking I was selling the property and needed some breathing room until it sold, but with the housing market falling, I can't get what I need to get right now, if worse comes to worse I may have to "take my bath while the water is warm" and sell for what I owe on it, we'll see.

So who are my creditors with the credit card debt; BOA, Chase, Citi, Discover and Sears, five creditors with eight credit cards. I figure by the time I am ready to settle these cards they will be at $150,000 to $160,000 with overlimit fees and late fees and their famous 30% interest. They really try to help you out once you go delinquent! By the way, I haven't had a late payment on anything in over 20 years; I'm really nervous about this whole thing.

I hope I am able to get through this without getting sued or ending up in bankruptcy. If I end up in bankruptcy the creditors will get a lot less. There are some concerns regarding my tax implications. I'm currently about $70,000 insolvent so my first $70,000 in debt cancellation will be tax exempt. I still have research to do on if fees can be deducted from the cancelled debt; a good question I intend to ask the IRS and will update later.

Am I proud of my situation? I am not, but hopefully others will learn from my experience and have the courage to take care of their own debt without the expense of a debt settlement company. However, if this doesn't work well for me, they may decide to hire a debt settlement company. Time will tell.