Well, I don't need to tell anyone here that the world has officially gone mad!  Our credit system has gotten us into such a mess and itself in the process that I am not sure what the final outcome for all of us will be but I can share my story with you.  This is a story of coming to terms with the changes in the world that frankly suck.

Lets go back a little shall we?  I grew up in standard middle class America.  My mother was a stay at home mom, my father still works for the same company he did when I was in elementary school.  When my brother and I went to school my mother went back and got recertified as a teacher which is what she does to this day.  They have worked hard, sacrificed, put money away, and plan to retire soon.  The American Dream at work.

Now lets move to my husband and myself.  I am also a stay at home mom, he is at times a stay at home dad, just depending on what we need to do.  I have found some ways to make a little money on the internet (nothing great so far, but as soon as I find that one I will let you know!).  My husband delivers flyers and does merchandising, while I do blogging, tudoring, and other odd and end jobs that allow me to bring our daughter with me.

So how does this relate to credit?  2 years ago we were making a combined 98k a year.  Living within our means and about to have our first daughter.  We started looking at houses.  The cheapest we could find with all the inflation was $168k.  This put us with $1500 a month mortgage, about $500 more than we were paying for our one bed room apartment.  (I had been drilled my whole life that your credit score is everything, and mine was in the high 700's.)  We bought our "starter home" and put pretty much all of our savings into getting it safe for our daughter when she was born…

And then the bubble burst.

Everyone now says it was "inevitable" or "they saw it coming" or "it couldn't sustain" etc.   The reality is no one expected home values to fall by 66% overnight.  Those of us who "followed the American Dream" are now looking at our largest investment being a joke, our 401k's down the drain, and many Americans at this point can't afford to even die.

So that leaves those of us in that situation with a choice to make.  How important is credit when lenders can't lend?  How important is your score when you are and Independent Contractor therefor a high risk to start with?  Why continue to throw money at something that was a starter home when it is not the right size for your growing family? 

The answer  lies within you.  By all means consult with credit groups, I did.  But keep in mind, many of these people are going to say whatever they can to get you give them money of some sort.  Do you have that money to give?  Many are scams, some are legit, and very very few can really do what they claim they can.  (If anyone has worked with any good or bad please leave it in the comments for the rest of us!)

Personally I came to this decision…  My home is not even worth 1/3 of what I have in it currently.  My stocks are a joke, and what little money we do have coming in can either go to the bank as partial payments, or stay in bank until I can put it somewhere that will actually benefit my family.  See we are all aware how perilous this credit slope currently is, but the fact is this:

MOST (notice I say most not all) Americans absolutely depend on credit to live.  Without it our economy will come to a grinding halt.  Obama wants to tax the middle class more to make up for what is being lost and these changes will create a shift that is already occurring:

People who know how to use the system will continue to, there is no option nbut for the companies to issues some credit if they want to survive and many will decide as I did, that making good on a loan/debt that is more than you can do is just not a smart move.  So where does that leave us?  The changes in society are vast and far reaching and they will affect all of us no matter if we have stellar credit or if our score is 350.  A major hit to your credit score of 200-300 points with a bankruptcy/foreclosure maybe the smartest thing you can do if it can get you out of the situation, but you cannot make the same choices again!