I've been in the housing market for 22 years. This year was the worst July in sales I have ever seen. I'm starting to wonder what I should do; I still make more money than I'd make in a factory or flipping burgers and I get the convenience of working out of my home. However, I'm scared that sooner or later, this is all going to completely dry up. Things are just not moving like they use to and it feels more like the winter in sales than the summer here.

I've kind of made a decision that when I move to the second home, I'm looking for a part time job waitressing or bartending somewhere. Maybe just a few nights a week for backup to help with the housing expenses.

I'm getting a check this week from the insurance company on my run away car that got dented and scratched on one side ($4,100) and I've decided to use it to buy fuel for the winter instead of fixing the car. The car is stored for the winter so I will worry about it next year. Also, the car is a 1999 convertible, if I have it fixed with paint and labor, the cost will only be about $2,000 and with the miles and the year and what I have already spent on that car, it can wait. The car doesn't look so bad I can't drive it and still enjoy having the top down and the wind blowing through my hair. Lately it has been a lot of rain in my hair; that is all it does here - looks like we are going to have a wet and damp summer and then go right back into a cold winter. Summers are never long enough here.

The house I'm in now hasn't even had a bite on it. So I listed it on line, bought some fancy signs with a brochure box to put flyers in and have been advertising it weekly in the local paper. I'm going to have an open house in another week and see how that goes. If I don't sell this house by October 1st, I'm renting it and moving. I'll wait until the market comes back next spring maybe, but I can't heat two houses all winter and the heat in this house is propane gas which is about $2.85 a gallon right now; last year I used 1100 gallons and that was for my furnace, cook stove, fireplace, dry and hot water tank. I don't think that is too bad, the fireplace uses the most gas and someone could cut back on that, but these winters are cold and long.

Let's all hope the housing market rebounds soon; maybe after the election something will change.

My car is 8 years old, it is starting to have some problems, one of them being rust around the wheel well. I took the car to a auto body shop and asked how much to fix the wheel wells. The guy tells me he can't just fix the wheel wells he will have to paint the entire side of the car on both sides so the paint matches. I told him it didn't need to match perfect, I just don't want surface rust to turn into holes in my car; I have to drive this car another year or two. He tells me that he has to do it that way and it will cost $2,000. So I told him thanks, but no thanks.

So I go to our local car supply store, I buy some sand paper, rust preventor spray, primer, had them mix up matching paint, sprayer gun, rubbing compound and a buffing machine.

I get home and go to work. I sanded off the old paint and rust. I then sprayed it with rust preventor. I waited 24 hours, then I primed it, waited for that to dry and then I sprayed paint on. It blended quite nicely; I was truly surprised. Then I lightly sanded the paint with very, very fine paper and I put rubbing compound on the car and buffed it to a nice shine. Total cost was less than $100 and the car looks fine. I'm sure it's not as nice as a professional could do, but I don't have any more rust and it will slow down the process of the car deteriorating.

I'm babying this car because the clutch is acting up and I have to prepare for that repair to the tune of $1,500. Hopefully, it will be the last repair in a long while. This car is a 2000 Audi A6 Quattro that I bought used in 2003, it has been very good to me, but she is getting old.

The debt settlement chapter of my life is finally over. I have managed to bring all my debts current and settled a massive amount of credit card debt. Now my credit will start to rebound and maybe after a year or two, I will be considered credit worthy again. I've seen this with my clients so I know that it does rebound; much better than filing a bankruptcy that stays on your credit for 10 years and would have ruined my career. I settled the following debts:

BOA - Settled at 38%
Chase - Settled at 45%
Citi - Settled at 38%
Discover - Settled at 50%
Sears - Paid down $1350 and am making 0% interest on the remaining $6,100 in credit card debt.

My total savings was $78918.93. It's not over yet; I will get 1099's from each credit card company and I have to count that as income; so I had a very good year and I wish I had made that much at my job.

Fortunately the IRS has an insolvent provision (publication 908, form 982; cancellation of debt) so you take your financial position at each point of debt settlement (the day you paid) and if your liabilities exceed your assets, you are insolvent. According to my calculations; I'm insolvent to the tune of the first $45,000, that means I have to pay tax on $33,918.93 at possibly 28%, which would be approximately $9,500. I generally get $5,000 back in a tax refund so I will need about $4,500 when I file taxes next April. I am definately going to need a tax professional to help me deal with this; the last thing I want is a tax audit.

My saving grace will be if I can sell the house and make about $15,000; that will solve the tax problem and the rest of the funds would go toward the $26,000 401k loan I have remaining; I had to take out a 401k loan to settle this mess. I'm fortunate that that is all I owe, I was able to save money, sell possessions and had some money given to me by my DH. If I do not sell the house, I could make installments to the IRS until next filing,in 2010, when I would get enough back to pay them in full. I've talked to them at length and they have a 5 year, 8% interest installment plan (I don't need another payment, but if I can't save enough between now and then, I will have to do it; I don't want a tax lien on my house or a freeze on my bank account).

So I should feel a great relief right now, but I have a tendency to worry about unfinished business. I guess I consider this unfinished until the IRS is done with me. I have considered consulting with a tax professional in the next few months just to be sure I'm understanding everything properly. I have filed my own taxes for several years, but I've never had this situation before and the tax instructions and definitions of assets and liabilities are vague.

So technically, I went from $135,000 in credit card debt to $26,000 in the form of a 401k loan, $6,100 I still owe Sears and $9,500 in tax implications; a total debt still owed of $41,600. So in the last six months I have reduced my debt by $93,400. That is truly amazing when you look at it in dollars and cents. My goal is to pay off that debt by the end of next year. I have several plans on how I will do that, including selling the current house I live in; this housing market has to turn around soon.

Don't get me wrong here; I'm very grateful and thankful that I've been able to clean up and reorganize this situation I'm in. I feel truly blessed and feel there was some devine intervention here.

I am down to may last creditor and I am also down to the last money I have. I have approximately $4,000 that was given to me to use for debt settlement. My last creditor wants $4,100 right now to settle my final debt. This is my dilemnia; I only have $4,000 right now, my clutch is going in my remaining car (my last blog explains second car is probably being totalled), my tenant gave notice she is moving out of my second home so I need to give her back $1,600 for her last months rent and deposit, I need to purchase a wood pellet stove before winter ($2,000) or I'll never be able to afford fuel for the winter and I need to move. My house may not sell and if it doesn't, I have to find a tenant before winter and I won't be able to rent the house for what I owe monthly, I'll be short about $150 a month; better than a full mortgage payment and paying to heat an empty house.

So my last creditor has offered me two options to choose from; first would be 0% financing for 5 years on my balance. This means the nightmare is over, one small payment until it is paid in full (giving a better credit rating) and the ability to use my reserves for necessary car repairs and the wood pellet stove. The second option is debt settlement of $4,100 (55%) which will clean out my cash reserves leaving no emergency money and will pay off my final credit card debt.

I have additional funds coming in the form of an insurance check on my totalled car, which I wanted to use to pay off my remaining vehicle. I may have to trade my remaining vehicle next year as it is 9 years old and is very expensive to repair and it seems to be having more problems now, so next year I will be able to trade the car and not be tipped on my equity or I could use the insurance money to fix the clutch and buy the wood pellet stove and do the debt settement.

I'm leaning toward the 0% financing for 5 years and I'll pay more monthly to pay it off early. This way I will have money in the bank and be able to take care of expenses coming. It will leave me with a more positive credit rating on this card, but I will still owe $7,500 in credit card debt; I had wanted to get rid of all credit card debt, but I guess this is better than having the possibility of not being able to fix my car or heat my home this winter. It will take me a few more years to be credit card free, but the nightmare will be over and my credit will start recovering.

What would you do?