[Renovation]

We are about to enter a period where we will have to stop paying our credit card bills and, possibly, our mortgage. The plan is to try to get deferments for 3 to 6 months to give me some time to get an income. We are going to try to negotiate with the credit card companies but I am not optimistic. The interest rates the banks charge is criminal. A couple of our rates have gotten jacked up to 32%. F--k these banks. I told one bank that doubled my rate to 28% for one missed payment that I lost my job and asked if they could work with me. They told me there was nothing they could do and to see if I could move my balance to another bank.

The questions I have are:

• Is it possible to deal with financial issues without it impacting your self-esteem?
• Is it possible to do this without worrying?

I am looking for advice on how to deal with financial issues emotionally. I am worried but believe there is a way out of this mess, so I am trying to be proactive by working with a credit counselor and trying to get a mortgage remodification. I am basically going to follow their advice. The hard part is that a lot of people are telling me that the banks are only willing to negotiate with you after you have demonstrated that you are having problems paying. This is perverse. I was advised by the credit counselor not to tell the banks that I am unemployed otherwise they will increase my rates.

I have no problem or at least very little problem with using the same business strategy that big companies use, which is namely to postpone payment until you have the cash to pay. I am willing to put up with the phone calls (I'll just take our phone off the hook) for a couple of months. My wife, however, is very worried about doing this and upset with me. We have a very loving relationship and my biggest motivation is to keep her happy and feeling secure.

I am trying to get advice on coping mechanisms for both her and me. Any advice would be appreciated.

[50guy]

Well, friend;

I've been down this road twice as I stated in other threads. Sure, ask the bank for a lower rate, if they say no, then just say how about you get nothing? If you are a good customer they will listen. I had one bank raise my rate to 32.2% after they found out I was late on my mortgage, I called and raised the roof on them. I was a long time customer and told them if they didn't lower it back down I wouldn't pay it at all ever. They lowered it to 13% and then I closed the account. It was 9.9%.

I am currently in agreement with my mortgage to take back my house under Deed in leiu of Foreclosure for satisfaction of the mortgage. they can have the house and I get off with a clean loan marked PAID. It can be done and I am going to do it. See, the thing is I keep in touch with them so it won't slide into foreclosure. I haven't paid them a dime since August.

To those that say I'm a crook, well, I paid that mortgage faithfully for 9 years a total of $267,250.32 on a $320,000.00 note. They could sell it for $275,000.00 and make a total of $542,250.32 gross or a 222,250.32 net profit, minus servicing cost mind you. So cry me a river, the poor mortgage company got screwed.

Every other bill I have will be paid in 2 years and I will never be in this prison again. So, my advice to you is not to feel bad, you didn't ask to lose your business in this downturn, which is only going to get worse, and put your credit at risk. All you can do now is protect yourself and lower your standard of living, aka, live below your means. Start saving that money you are not paying to the mortgage and buy some land cash, or do a lease purchase, get some ground, a dependable vehical and grow a garden, raise chickens and shop at the local butcher, go in with some friends and buy a half cow and have it butchered. Invest in a freezer, learn to can and hang on. It is going to get a lot worse before it gets better. We had the roaring 20's the depression of the 30's, the roaring 80's the easy money 90's and the half decade of money grabbing con artists of the 2000 -2007 period now it is time to pay the pieper. Keep cash handy, stay close to family and get ready to hunker down, it's going to take a long time to see better times again if we ever do in our lifetime.

Good luck to you and your wife, I hope this helps you some.

[lynn P.]

We recently went through personal bankruptcy 6 months ago - it's a big blow but at the same time, it's a relief. I don't recommend not saying anything and stoppping the payments - that's really bad for you credit rating. Be honest with your bank and tell them you're struggling - that if they don't work with you, they'll get nothing, as 50guy said. Have you consolidated all your credit cards?

I have saved at least half my grocery bill by shopping at lower end discount stores. The quality is even better and I'll never go back to the higher priced stores, even if I win the lottery. Saving has become a hobby for me now lol. I stock up when things are on sale. I realize for men it's a big blow to suffer financially, but it's okay. What really matters is your health. As long as you have that, you can keep chugging along. If your debt is huge you might want to consider bankruptcy. You're not the only one suffering - I heard on the news today, there are millions of people risking foreclosure right now. Good luck and don't feel discouraged.

[50guy]

Lynn

You are soooooo right. Financial downturns are a big blow to the male ego but, it can be overcome. I too enjoy saving $$$. A little at a time really adds up. I save just $25.00 a payday and now have over $2k in that account. That is for a major emergency, car repair, A/C replacement or furnace. it is not for wants, it is for emergencies. DW and me do a lot of budgeting and we eat everything we cook, including leftovers. I found a cobbler shop that can fix my work boots for $20.00 verses $130.00 new pair. The guy down the road is a butcher and sells what he raises. We got 3 racks of ribs for $5.95 total each rack had 8 ribs in it and we have a freezer full of meats. This years is our first garden and I am going to get 4 chickens for eggs. I'm thinking of going in on a lamb and half a cow with my son. The folks around here sell cattle, sheep and hogs and the butcher does the rest. All the animals have records of what they have been fed and their health. We buy closest to the ground that we can (organic) and it has been a lot of fun doing this. DW is learning to can. we are determined to get out of debt and stay out of debt.

One good book to read is The Total Money Makeover by Dave Ramsey. It will encourage you and give hope.

Good luck on the road to debt freedom.

[lynn P.]

Just to give an example of how stores have different prices. We have a minor flood in our basement and the artificial tree got lost when the guys came to remove some stuff. So we had to buy a real one this year. I looked around and they were at least $40 -$100. I went to my lower end store and got a 7ft tree for $20. Good for you 50guy for saving for a rainy day and being creative with your food sources. This is how everyone did years ago - right? With antibiotics and hormone shots given to cows, pig and chickens it's fantastic that you know where your meat's coming from and what they've been fed. I actually feel in a good mood when I get a good deal -it feel great saving. I wish I had room in my back yard to raise chickens. I also bought those 'green bags' to store produce in -they are more expensive but they keep the produce fresh longer. I also negotiated with my phone company to get the monthly bill lowered to $29 instead of $70 by threatening to switch companies - I also took off some the extras. All these little things had up to a substantial saving. It's time to hunker down in these tough times and you'll make it through Renovation.

[NuckingFutz]

I have a few things to add to this wonderful thread. The first thing I ever read on this subject was to learn that you are not your bank account. I have the answer but how you get there is a very individual process. I was pretty much forced to economize over the years due to my illness over the years. I cut up all of my credit cards. I have dumped the pump by taking the bus. It was the most drastic move I have had to make. But you know, my transportation expense is five dollars for a three year disability bus pass! A lot of people would say they they would not go that route, but it saves me thousands of dollars a year and haven't been in a car crash in years. Yeah, my pace of life has slowed down considerably, but now I have time to read, listen to music, put on make-up or browse the internet. If I need a car I can rent one for the day if I need to haul something big home or take the girls to the vet for their annual exam. I shop at resale shops instead of the department stores. I have a lot less stress now.

[Renovation]

Thank you all for your kind advice and encouragement. I met with a couple of bankruptcy attorneys and a credit counselor at a Credit Counseling Center yesterday and today. I wanted to explore different options to include a debt management program that allows you to pay in one monthly payment. The problem with this program is that it doesn't really save us any money on a monthly basis and it's a 5-year program. The net of it is that our best course of action is to file bankruptcy. I feel I am getting good advice from people that deal with these kinds of issues all the time, so I believe it is the right decision. I desperately want to lead a simpler life and filing for bankruptcy might give us the fresh start we need.

[NuckingFutz]

Sounds like you have really been doing your home work on this. Maybe if you keep sharing your experience on this it will help and encourage others as they struggle with finances and how it effects them emotionally. Good luck with this and look forward to your posts.

[Zelev]

I've always relied on credit cards to get by when my money gets low but some of the card companies got me this time too. So far I'm managing but I did get overwhelmed and missed some payments by a day or two. I was immediately surprised how quick they are to jack up your rates. Cit_b_k is the worst. Anyway my rule is never give your creditors your work number or cell number. As a matter of fact none of the card companies have my home phone number either.

Most customer service reps at this point are from collections. I worked customer service in soft collections (less than 30 day lates) before I went back to school. We got incentives and bonuses for successful collection calls. No help is generally offered until you are more than 90 days late. Point is they don't care about your situation they just want to collect.

Accepting calls from collections is depressing and degrading, that the point! They want to bully you into paying. Nothing you can do by phone that you can't do by mail. Change your number or better get a second number. You can always call if you need information just don't update your number. Use one line for family, friends, etc. Do not list that number on checks or any applications unless its a job.

Don't let them psych you out

[50guy]

Creditors calling is a real pain. They want you to try and make arrangements and such. I told them "if I had the money, don't you think I'd have paid the account?" One time I asked the man "what are you gonna do to me....stab me....shoot me?" Do me a favor....forget this number because I am not paying. They stopped calling when i told then I was filing bankruptcy.

Good luck to you,

[Willow13]

Hi Renovation--50 guy mentioned Dave Ramsey. He has a web site http://www.daveramsey.com/radio/home...strMode=listen and you might be able to pick him up on the radio where you're at. If you can listen to him for a couple weeks, it might provide some of the emotional support you need for this financial crisis. He tells people to prioritize -- food, keep the lights on, the water on, etc. when in a crisis.

[Yoda]

I stopped paying on some credit card bills. One was only eighty dollars, another just a little over a hundred. The biggest was eight thousand that I had borrowed from a loan company and with interest over a couple of years it got up to about ten thousand. After not paying anything at all to them for about eight or nine months they sent me a letter and said they would accept two thousand as payment in full for the balance and it wouldn't go against my credit score any worse than it already was.

I was really lucky that my mortgage was owner financed because I got six months behind. They were not happy but they were willing to work with me until I could get it fixed.

It is very trying emotionally. Good luck.

[hesterprynne]

i stopped paying everything but the mortgage, car insurance and utilities. the phone rings all day with bill collectors. i tried explaining i just don't have the money anymore, and they write that i refuse to pay. apparently being unable to pay and refusing are the same thing to them. i don't answer those calls anymore. thank god for caller id.
sometimes i get so stressed i wish i could just crawl under the bed and hide, like a little kid. i hope the economy picks up soon.

[Ygrec23]

I've been in private practice as a mediator for 22 years. The Depression has hit us hard, since the vast majority of my clients are the less well-to-do. I'd say my income has dropped 80% over the past three years. At least we have social security. But reading this thread gives me lots of ideas about how to do things. I wish I'd run across it a year ago. I don't want to go into the details, which I've done before and which make me sick. One unfortunate consequence of the situation is that I began drinking a whole lot more than I did before. If you're tempted, people, don't do that. It's a whole waste of time and money. I'm completely on the wagon now, and it does make it easier to face the situation instead of doing it through a terrible hangover. I'm 65 and I can't even get a job as a bagboy at the supermarket (overqualified). Nor is s*****e an option; it hurts too much for those left behind. Somehow, a lot of people made it through the Great Depression, and we can make it through this one.

Take care.

[Perna]

Wise advice, Ygrec. I was thinking you should write a book now about all you've learned. Was reading about mediation and being a mediator and came across this US News article, don't know if there's a thought in here that might help you:

http://money.usnews.com/money/career...-mediator.html

[Ygrec23]

Originally Posted by Perna

Wise advice, Ygrec. I was thinking you should write a book now about all you've learned. Was reading about mediation and being a mediator and came across this US News article, don't know if there's a thought in here that might help you:

http://money.usnews.com/money/career...-mediator.html

Why, thank you, Perna. That was nice of you. The article was interesting too. As for writing a book, I can think of quite a few better candidates on PC for that particular undertaking. Although there was that time a psychiatrist called me the day before his patient's mediation, just to let me know that his client was a paranoid schizophrenic capable of any kind of violence. I actually called the psychiatrist back to make sure someone wasn't pulling my leg. No. He was real.

Take care.