Lost in Debt

It has been approximately three weeks, but for less than $200 - we painted our kitchen cabinets and added new brass hardware. I love the new look and it has brightened the kitchen up.

We had a dinner with 12 people today for DH's birthday - everyone was very complimentary about the cabinets and they could not get over how much it changed the look of our kitchen. I was going to add a new counter top for another $900 later on, but everyone said just leave it the way it is, they thought the kitchen as is would sell.

I have lived in this house for 25 years, it is going to be hard to leave when I sell, I raised all my children here and my nieces and nephews and are sad I'm selling too, a lot of memories here, but it will be nice to be able to do something different. Maybe when I get through this debt mess I could move south and get out of all this snow!

This has been a long winter and I don't think I have ever seen so much snow, it has gotten to the point that when you are in the supermarket, every corner I turn there are two guys talking about all the snow and where they are going to put it next. I hear we are expecting two more feet of snow next week; I'm so tired of the white stuff, but the ski industry is counting the cash ... we needed a good year for them.

I wish I could go to FL right now, my mother was down there last week and it was 80 degrees every day and perfect weather. Such extremes and it's all just a flight away. We won't see really glorious weather here until July and then I will drive to the coast of ME ... saving myself about $2,000 ... it generally cost me $3,000 to go to FL in the winter, ME only cost me about $1,000.
A much needed low budget vacation would be very nice.

In November my DH decided we needed a dog, he felt that I was spending too much time home alone and I needed a companion. I told my DH that I have never had a puppy and knew I was intimidated by large dogs. So my DH makes an appointment to look at german shepard puppies! There were nine of them and we go to look, I was very reluctant and knew that this would entail a lot of work for me, but really I didn't have a clue. He immediately spotted a female that he said was "the one". So he asked me what I thought, I could see he was totally smitten with her since he had had a german shepard in the past, I told him it was up to him and he decides to bring her home.

We set up a kennel in the living room by the back door so she could learn to go potty. She adapted well and within a week she was trained. My living room now looks like a zoo with a gated fence, so she can't get to the furniture, and doggie toys. I purchased a book on how to train your german shepard. Keep in mind I have never personally had a puppy or a large dog.

To make a long story short, the puppy is now about four and a half months old, training has been difficult and she weighs 40 lbs. My once quiet and clean, home has now become very active with the dog chasing my cats and treeing them on the shelves and table (I don't allow my pets on the shelves and table). I spend a great deal of my day going in and out with the dog, cleaning up messes the dog makes (tearing up paper or anything she can find), vacuuming up pet hair and I'm finding this to be a very stressful process. If I ever get back to work here, how will I deal with this high energy dog?

Last week she ate a hole in my recliner I purchased about two years ago; this is while I was talking on the phone in my office. This week she ate the molding off my french doors that cost me $2,400 when I put my addition on in 2004; again I had gone to my office to talk on the phone. My red oak floors are taking a beating from her claws which I trim every two weeks. Outside the house, when it was warmer out, she dug up the septic tank - big hole!! Came to the door covered in mud and looked very pleased with herself. She will love my flower beds in the spring!

Don't get me wrong, she is a beautiful dog and many days sits by me watchfully guarding, she is loyal and faithful and wants me with her all day long. With that being said, I have been in tears and am torn about raising this dog. She is like a small child and I have my children all but raised now, this is an enormous responsibility, very stressful and if I don't spend enough time with her she gets angry and chews something. I can't keep a mat in front of the door because she chews that up, the last one she chewed cost me $40.

I think my DH is very disappointed that I have become disenchanted with his act of kindness; wanting me to have a day companion. DH is gone 13 hours a day and I am it. DH says he can take her to work with him, but that doesn't train her to be a house dog and I think having free rein all day will cause her to be more disruptive in the house.

I have shared my feelings with my DH and he has said he has a single friend that would love the dog. He says he realizes I'm having a hard time here with all the other stresses in my life. Do you give your kids away if you can't deal with them? I have an emotional attachment to this dog, but I realize this is a long term relationship not just a walk in the park.

Any suggestions on what I should do?
I weigh 120 lbs, what will happen when she weighs as much as I do and I have to try to control her? What happens when mud season arrives? Should I just wait it out, will it get better? Will I have any furniture left? Will I be able to sell my house if I keep her and she keeps destroying things?

I really feel sad about all this and was reluctant to post ... but maybe others have experienced this and will know what is the RIGHT thing to do.

I have been a single parent most of my children's lifes. I have a son who is out west and is a Civil Engineer, I have a daughter who lives nearby who is a Human Service major but runs a Restaurant and I have a Senior in High School who is still struggling with school, girls and peer pressure. It has not been easy raising these kids, but there are a few things I have learned:

1. Pick your wars and make sure they are worth it. Your words and actions become memories that can last a life time. Is it really worth it to get upset because they left their clothes somewhere they shouldn't have? It was much easier for me to just take care of it and maybe later gently remind them to pick up after themselves.

2. Be willing to say you are sorry when you know you are wrong. I remember my son mowing the lawn and getting upset because he went to fast and tore up some grass, I confronted him and he began to cry, he was doing his best, he was still learning (I apologized, gave him a hug and told him to drive a little slower).

3. Make sure you tell them that you love them every day. I didn't let my kids leave for school or leave the house without telling them I loved them. You never know what is going to happen in todays world and I never let my kids leave angry at me or me at them, you never know it could be your last words together. (I know this from experience, my best friend had a very bad verbal war with her 15 year old son the day she died in an automobile accident, they said some bad things that have haunted him into adulthood).

4. Praise them often and be careful with criticism; make it constructive and do it kind and methodical; you get more bees with honey than you do with vinegar. After all, we are building their self esteem.

5. Ask them about their day, about their friends, about their relationships, let them know you are interested in their life and listen to what they have to say; sometimes you will hear things you would not have known if you had not have asked and listened.

6. Teach them to be kind to themselves and kind to others. Make giving to the needy and less fortunate an example in your home and they will never look down on others; it teaches them human compassion.

7. At least 75% of the time, put their needs before your own. They only have one childhood and they are only children once; make it special.

8. Make family meal time important and have sit down dinners together. With sports, work, sleep overs and etc. sometimes it is hard to have family dinners. We made Sunday a must, at least Sunday we had to have dinner together. It keeps the family close and is a good time to share our lifes; there is always a lot of picking and laughing at our table.

9. When they make a mistake and do something they shouldn't (they will because they are human and learning), help them to see what their actions have done to themselves and others, help them to forgive themselves because this is a learning experience and now they can move on. We have all made mistakes and we just need to do better so it doesn't happen again.

10. Give love, give hugs and don't be afraid to touch and show emotions. This teaches your child how to love others, bond with others and express their feelings. I've met people in this life who don't know how to express feelings, are uncomfortable with a hug and never say, "I love you", because as children, they were not shown this important emotion in a touching and affectionate way. I know parents who love their grown children, but I never see them touch, many write a check and think that does it.

I'm definately not or do I profess to be a "great mother", but I have been the best mother I know how to be. I've made mistakes, probably been too easy on them, felt sorry for them because they were raised without a father in our home and have given too much, but my children respect me, love me and come home often to see me, this is home, so I am doing something right.

Give them the tools and they will become everything you think they can be and more.

We've had over 16 inches of snow in the last two days, I had to shovel and snow blow my yard and my neighbors, took me two hours yesterday. The plow truck plowed a whole snow bank into my neighbors yard it was four feet high and two feet thick ... it's a good thing I couldn't find him yesterday, I would have probably given him a shovel and made him help, how rude can he be? He knows the yard is maintained and he doesn't do that to anyone elses yard.

When my neighbor was alive she told me she had a problem with them plowing snow in her yard, but I never knew it was that bad. My neighbor died the day before Xmas of cancer, she has been my neighbor for 25 years and she was only 62. I keep her yard maintained so people will think someone lives there, the estate will sell it in the spring. The executor of the estate lives out west and there is no one here to take care of the property. I miss my neighbor and it gives me some peace to know that I can still do something to help her family. She had a son that was mentally challenged and lived with her and he was in his 30's, the estate will go to him to help with his care; it is very sad and I want to do all I can to make sure no one takes advantage of him financially,I'll do what I can to assist the estate so that no one can bleeds the estate financially. I made sure my neighbor had a trust set up to protect her son because he is a ward of the state because he is not mentally competent and he can't have assets in his name.

My concern was that I had a friend that died 11 years ago in an unexpected car accident. I was the appointed executor of her estate by the probabe court, she had three children from the ages of 10 to 15, by the time the estate was completed, three different law firms had gotten involved and over $20,000 of the childrens money was gone. She didn't have a proper will ... something to think about if you have children and you want to make sure they don't lose their money. Have a proper will or family trust set up and have it filed with the probate court.

I've attached a picture of my back yard ... stop the snow!

My largest debt is with Bank of America, it is at $59,900 right now with the interest and late fees. I had a dream on Tuesday night that they were suing me for the balance. I woke up at 2:00 am and couldn't go back to sleep.

For those who been following me, you know I have that "Privacy Corp" ID machine that let's my calls go to the machine and I don't hear it ring. I thought I had all the collectors so far, programmed in. So my mother is traveling and I was concerned about her and the phone rang and I assumed it was her, well it was BOA. I had not planned to talk to them again until March because I'm not yet 90 days.

So I told them my situation, which has not changed and told them I'm looking to settle my debt. The nice gentleman I spoke with offered me a settlement of $21,000, I asked for $18,000, so he told me he would go see his manager and call me back. He called me back with bad news, they wanted $27,000, which I don't have available to me right now and it would throw off my settlement plan making me short to settle all my debts. So he hooked me up with the Manager, she thought I was threatenig her with a bankruptcy which I told her I was not, but .... that didn't go well. She then told me that if I did not settle, she was sending me to arbitration, that means legal and they make the decision to sue me or not to sue and she told me they would sue me and garnish my wages and put a lien against my house. So then she and I compromised and we finally settled at $23,000. A little more than I have right now, but she let me spread it over 4 months so my tax refund will be here and I'll have enough. That is a 38% settlement and I'll take it with the threat of being sued over me. My account was large and it is usually the large ones that get sued.

I didn't realize how much this has been bothering me, I knew it was upsetting and I thought I was dealing with it okay, but after I hung up I literally cried for an hour and then I broke down a few more times during the day. I was mentally wiped out and couldn't do much the rest of the day. I am still in shock that they settled with me and I'm so relieved that it has finally started and I was able to take care of my biggest account.

The bad news is I have $74,500 still in credit card debt to settle with four more creditors. I owe Discover $25,000 and they are they are about 70 days deliquent now and will probably be willing to talk to me in another month.
I checked out my 401k plan and I can now borrow more money than they told me I could, because I've lost so much money lately, I decided to put in a loan request so I can start planning how to finish this up.

There is a God and I may survive this (knock on wood).

For those of you following my story, I'm $133,000 in credit card debt and growing with interest, late charges and over limit fees and I have lost most of my income (commission based and tied to the real estate market) have $280,000 in mortgages and another $20,000 in vehicle loans. I've become unable to make payments on the credit cards which use to be $2,500 a month and have now shot over $4,000 with the new 29.99% interest rates I've inherited because of delinquent credit. My goal is to settle this debt and I'm saving and waiting since you need to be about 90 days delinquent before they will even talk about settlement and more like 120 days before they will give you a decent settlement. The waiting seems to be the worst part of this for me, I just want it over. Good thing they have Ambien CR or I wouldn't sleep at all.

So last week the refinances have started trickling in. Alot of people still need to refinance those high rates. In my area I'm considered one of the best in the business, I often get calls asking me to come work for a new company. Last week I got calls from Citi Mortgage and Wells Fargo. I declined interviews for both jobs for a couple of reasons. One is I won't make any more money than I'm making now by changing companies and it is not a good time with these economic conditions to be moving jobs. Two is if I try to change employers they will pull my credit and see the mess I am in and won't hire me anyways.

It really hit home when I realized that because of this mess, I have given up any possibility of changing employers and even if I wait a few years to do so, it will be extremely embarrassing when I have to explain my credit report. That is why I have to at least settle this debt and can't have a bankruptcy, I couldn't take 10 years of explaining and not getting the job because I had that public record. I've worked so hard to get where I am and now credit can ruin my career ...

I am in enormous debt as you can read from my prior post. The Feds are lowering the rates and I'm starting to see some slow activity in my business. However, it is confusing, one day the 30 year rate drops to 5.75% and then the next it is back to 6.125%, customers don't want to lock in because they think the rates are going down and I fear it's going to excite the market and make the rates go up. One customer accused me of not giving them my best rate after the rate jumped ... this gets very stressful and I just wish they would lock when they see what we have at application ... it's a gamble and if I knew what was going to happen, I'd be rich!

Even though I'm seeing some activity and maybe my income will increase, I'm overextended, behind on all my credit cards and have rates up to 29.99% with about $80 a month in extra fees on each card and there are 8 of them, with five creditors involved. There is no way I can recover from this without settling my accounts, my credit card payments were $2,500 a month when this started and now they are at $4,000, the debt is climbing. I don't even bring home that amount after tax and I still have two houses to deal with and two car loans, my cars are almost paid and we need both cars for work. So I will continue my plan to settle and clean up what I can. I'm figuring by April I may be able to take care of the first creditor.

In the meantime, my phone rings about 12 times a day from three of the creditors, not all of them are calling yet, I still have two more that will be calling soon. So I decide to talk to one about 10 days ago, we go over my situation for about the fourth time since this all started, I hang up the phone and they call four more times that night. Do they think a miracle occurred and I instantly found wealth? The fact is this is legal harassment, they try to wear you down with the calls. What they don't know is I purchased a machine that makes the calls go right to the answering machine and they don't ring in my house, so I can pick up the calls when I choose. I will not talk to anyone for another month, it is too depressing and it ruins the rest of my day. I don't feel it is necessary to talk weekly, things like this don't change quickly. I also have the option of sending them a cease and desist to not call my home, however, sometimes that will accelerate the sitution right to a lawyer, so the machine is on and I stopped looking at the ID to see who has been calling, the creditors are programmed so family and friends can ring through. The caller ID machine is called "Privacy Corp" and it was the best thing I could do for my sanity through this.

In over 20 years I never missed a payment, this is all a learning experience for me. I have my fingers crossed that I will have settled all my credit card debt by August and I have been saving everything I can. I've looked at hardship ideas and debt consolidation and etc., but that would be a bandaid for this serious situation that is bleeding all over the place. I've consulted with a Bankruptcy Attorney who has encouraged me to file, but I just want this over and I'll give what I can and what the creditors feel is acceptable. They will get more money from me this way then through bankruptcy.

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.