Who Gets Paid First? How to Pay Bills When You Have Too Many
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How to Survive Job Loss
Last night the TV show 60 Minutes aired a piece on Wilmington, Ohio, the mid-sized American town where German carrier DHL just shut down U.S. operations and laid off all of its work force. Ten thousand people live in Wilmington, and most of the adults in town worked for DHL. By mid-December of 2008 over 3000 DHL workers had been let go, and the rest are now out of work too.The job losses are currently rippling through the rest of town's economy, with the mayor estimating as many as a quarter of the local businesses will go belly up as a result later this year.
The report was very depressing to watch--lots of people crying, lots of desperation and fear. One extended family was already stacked up under a single roof because the son and daugher lost their jobs and had moved in with Mom & Dad, and now Mom & Dad are out of work too. There's a new baby in the household, and no money coming in.
Wilmington is a one-company town, but what the report doesn't mention is how many midwestern towns and cities are essentially one or two company towns, and how serious the current economic downturn is getting. We watch the people in Wilmington cry and its possible to think, "Wow, sucks to be them," but not too far around the corner here it could and likely will be most of us. Every day we get news of more layoffs, more shut downs, more corporate bankrupticies, more overwhelmed state governments.
What do you do when your paycheck to paycheck life no longer includes a paycheck? How do you handle that? Just this past Sunday morning the news show that precedes Meet the Press cheerily reported that out of the top 15 best places to work in the U.S., 12 are currently hiring.
That's swell. One of those great places to work is Google, and it's true: Google is indeed a very cushy employer. They provide their lucky workers with free food, free gyms, liberal leave policies--they even let them play video games at work. They're also one of the hardest places to crack if you are looking for a job. You'd better be under 25 and you'd better be a genius. A genius with connections. The guy who takes packages off a DHL plane and puts them on a conveyor belt in 10 below zero weather is not, I repeat not going to be getting any kind of job with Google. Not now. Not ever.
Trust me on this one.
I thought it would be worth posting some real advice and suggestions on how to survive in the current economic climate as opposed to the chirpy pretend advice we see on the news lately.
Some of you probably have more suggestions than I can think up, so feel free to post them if you want or argue with mine. I'm open to free advice myself.
How to Rank Your Bills
Our local newspaper recently published a kind of triage list for how to pay your bills when there isn't enough money to pay all of them. It went something like this:
1) Mortgage.
2) Utilities.
3) Food.
4) Car Payment.
5) Credit cards.
6) Everything else.
The mortgage has to come first because without a roof over your head, your problems are instantly 100 times worse. Utilities are hard to get turned back on once they get shut off, which is why they are listed second. If you have a utility shut off, you're looking at a huge deposit plus several months in bills that you will have to pay just to see that water or electricity again, which is why if at all possible it's best to just prevent the shut off in the first place any way you can.
Food at number three is self explanatory, and several of the people in Wilmington were actively stockpiling low cost filling food like rice, peanut butter, and cereals. When you see something that keeps well on sale in bulk, buy lots of it. That way, there will at least be something to eat. Learn about local food banks and swallow your pride and use them, if they are available.
Car payments are not that flexible, but you can call and work with your lender to some small extent. It usually isn't a very long rope. Still, you can't eat your car. You can't pay your mortgage with your unpaid-for car. Living without a car in most parts of the U.S. is difficult, but it can be done. It's just really hard.
Credit card companies are notoriously unsympathetic, but sometimes they will work with you. I do know of people who have been able to neogiate a lower interest rate and payment if they agree to a temporary credit freeze, but you have to ask yourself if trying to pay these guys back right now makes any sense at all? Is there a pretty good chance you will be able to get another job in the next six months? Then by all means see what you can work out.
If not, missing a payment or two will definitely wreck your credit rating, but beyond that there isn't a lot they can or will do to you in the first year after you stop paying them. They'll freeze your card, but you shouldn't use it anyway. They'll call you over and over again every single day. That's annoying. But you don't have to pick up. They'll send you hate mail. That's upsetting. But beyond all that, its likely they will do nothing else for a good year.
Basically, credit cards are unsecured debt, meaning no real property is attached. They can't come repo your Christmas presents. They can't show up at your door and kick you out of your house. They can eventually garnish your wages (if you ever have any wages again), seize your bank account (if they can find out where it is and what the account numbrer is), or take you to court and get a judgement against you, but all of those actions take time and in most cases they will do none of those things.
Right now, credit card companies are in lots and lots of trouble themselves. Credit card defaults are at an all time high and are about to get soooo much worse. So yes, these companies go at the bottom of your bills-to-pay list.
More Thoughts On Credit Cards
The conventional Suzie Orman type wisdom on how to deal with credit card debt goes something like this:
Pay your cards off one at a time starting with the highest interest card first. Send as much as you can to the highest interest card and the minimum payment to the rest. When the highest interest card is paid off, do the same with the next, and the next, until they are all paid off. Don't use any of them, and when they are all paid off, never take out another credit card again.
Well, that works out well when you are actually earning a decent income and you can make enough of a dent in the payments to make a difference. For many people however, using that system will not get their cards paid off in their own lifetimes.
People who have never gotten in trouble with credit cards generally have helpful advice like, "Wow that was stupid of you to use those credit cards, you shouldn't have done that," which of course is always welcome when you are knee deep in financial poop. But on a more realistic note, real wages have been falling rapidly over the past 12 years at the same time that the cost of just about everything else has been skyrocketing.
Many people are in trouble with credit cards because of medical debt and because of personal emergencies that had to be dealt with even though they were not making adequate incomes to deal with them. Once you are paying between 19% and 33% interest on those charges, plus interest on the interest already charged, plus whatever fees they can slip in there while you aren't paying attention, you are in a situation where you basically never touch the principal on the debt. This is called "usury" and it used to be illegal for banks and financial institutions to set up debt this way.
My attitude toward credit card companies is that we all should be doing whatever we can to destroy them. We could see it happen in our lifetimes, and soon. Citi is in serious trouble, and the other two big ones--MBNA and Bank of America--aren't doing much better. Keep in mind that this is true even after they were allowed to charge usurious rates on unsecured debt, extend huge credit lines to 18 year old college students with no incomes and recently bankrupted people, and charge hidden fees that often came to hundreds of dollars a month on minor debts that were not past due.
You know, if they can't make enough money to stay solvent when conducting business in such a greedy, sleazy way as that, do you really care what they think of you?The truth is, they don't care about you at all. They don't care if you pay, they don't really even care that much if you don't pay--it's all a big sick numbers game with them, and right now they are not doing so well with it, in spite of their grabbiness, poor underwriting, and carte blanche capital full of professional lobbyists and toadies. So don't the the bastards get you down.
One plan for dealing with credit card problems involves banking your minimum payments plus whatever else you can muster for six months (don't make any payments to them at all during that six months), and then negotiating a settlement with each company at about 1/4 of what they say you owe them.You can do this yourself--don't pay anyone to do that for you.
Even at 1/4 of what they present as your current indebtedness, you will in most cases be overpaying on the principal you originally borrowed, so they will still make money. Some will take the settlement, some won't. The idea is to get them to write off as much of your debt as possible so you can start over at zero and pay cash for everything the rest of your life. I personally think that's a more realistic plan for people who are already in trouble with cards than the Suzie Orman-type plan.
Last but not least, if you have medical debt and they are sending you threatening letters, DO NOT PUT THE DEBT ON YOUR CREDIT CARD. So many people do this. Sometimes you have to do it to get access to to medical treatment. But once you do it, it becomes nearly impossible to pay off.
If you've never gotten in credit card trouble, hooray for you. Yes you do deserve lots of praise and pats on the back and so forth, but just for the next five years or so, could you please refrain from tearing into recently unemployed people who do have credit card problems?
Consider the possibility that there could be compelling reasons besides personal irresponsiblity and a love of Starbucks double mochas that got those people into trouble. A sick child, engine trouble when you work for $8 an hour, unemployment--all of these things happen and they are not always an occasion for assigning blame.
I think, as time wears on, we will see the best and worst of people. I'm already personally seeing both around here.
Finally, I would add, don't beat yourself up because you lost your job. It's going to be hard enough as it is, and you have to be on your own side. If sometime wants to lay some ideological trip on you about how you could have prevented the whole thing if only you were them, look them straight in the eye and make an autoerotic suggestion that will keep them busy for awhile.
Good luck. Feel free to add your own survival advice in comments.
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Is this what your Hubs look like when you are passionate about something? Wow, what a report. The absolute best thing is for people who can to get out of debt once and for all but, I know you need an income to do that. Meanwhile, we all do our best. Credit card companies will settle when they think they will lose it all. At one point in our lives my wife and I were on strictly cash, no cards period. Oh how I wish we had stayed that way. Great Hub page. Well said.
My company deals with debt, becoming debt free in a short period of time so I and my fellow agents have seen the devastating effect debt can have on people. By the same token, you would not believe how difficult it is to get people to let go of their debt.
Pgrundy,
This is a great hub. I know our family is struggling like most are. We make sure that the mortgage is paid every month and we aren't late on that. We try to pay all the bills on time for the most part. We have one big credit card that the rate jumped up on real high. Even if I pay more than the min. due, the next month it is over the limit again because of the interest rate.
Currently we have one vehicle that is paid off, but the other one is messed up and currently undrivable however because we still owe money on it, I make the payments each month. I don't want to ruin what credit we have though people keep telling me I should turn it in versus paying 400 a month on it. I just can't do it.
It is so hard when you have to decided whether you can pay some of the bills or put groceries in the house. I can understand buying low cost foods. I buy ramen noodles and discount meat plus canned goods. It seems like it wasn't that long ago I could keep fresh fruits and veggies in the house.
My husband drives an hour and a half each way to work. We wanted to try and sell this house and rent closer to his work. Because the economy is the way it is we are now underwater with the house. We can't sell it to break free from it because the value has crashed especially since there is a foreclosure down the road going up for auction. Crazy that my house value goes down but my property taxes went up. My propery taxes were higher than my mortgage payment. It feels like no matter which way you turn there is no room to breath anymore.
We don't have health insurance so I hold my breath whenever something comes up with one of the kids.
Great hub! There are so many in this situation, more every day. You had some great suggestions and very realistic information.
Hi Pam! Great hub! Your suggestion regarding credit card debt is certainly worth thinking about. Fortunately, I've managed to be able to pay my credit card bills off each month, but I know that this may change if my current joblessness goes on for much longer. I've never put people down for not paying off thier cards, as I have no idea what put them into debt in the first place and, as you say, it could have been something unavoidable, like a child getting sick. I do resent it when people who've never been there call those who are down on their luck 'deadbeats', because surely some of those, if not most, who are down on their luck are not there by choice.
Also, those who put down Ramen noodles need to know that they actually taste quite good! Especially if you add seasonings! And at 14- 16 cents a packet, it is a great bargain!
Again, great hub!
Great Hub! I totally agree with the whole credit card thing. I heard Suze Orman on Oprah talking about her new get out of debt plan and I thought to myself, this would be great if I were making any money at all. Also, I was talking to a creditor the other day and explaining to them that I had no dependable, steady means of income and they still kept trying to cut me deals. This is all funny to me because I tried to make arrangements in the past with this very same creditor and they would NOT because I did not have dependable income(no unemployment benefits, or social security, etc.) Oh how the tides have turned. Bass Ackwards!
Nice work, as always, Pam. I remember in the old days of my first apartment, "accidentally" mailing the check for the electric co. to the phone company and vice versa. You'd usually get a nice letter back from each (and your checks) explaining your boo boo. By then, of course, you'd made arrangements to have the money in your checking account.
As far as unsecured debt is concerned. It's just that. If I lend you $20.00 and you don't pay me back. That's it. I have no recourse. If you don't have it, you don't have it. What can I do, besides break your thumbs? If you've got unsecured debt and you can't pay it, walk away. To hell with your credit rating-which I don't think is going to be an issue in the "new world"
Wow, I appreciate all of your comments and your courage in sharing your own stories and how you are dealing with them right now.
Hi Teresa--Yes, Pam it is! I am not far from where you are financially. Lost my bank job the end of October and while I don't miss it one drop, all the critical financial problems I had before that are now even mroe critical. Push is coming to shove. I too wanted to pay my cards off the Suzie Orman way even though most of the debt on them was from my ex's business (we've been divorced since 2001). My reasoning was, I have an education, I have a job, I can do this, I'm not going to default for go bankrupt--I married him, I'll take responsibility. But when I moved to MI and couldn't sell my house in Indiana, all the progress I'd made fell apart. Then I had an apparent heart attack at work and the insurance didn't come close to covering the two days I spent in the hospital AND it put my job in danger (thank God for the second part). Now, I'm looking at it all much more coldbloodedly--like, OK, how do I survive here? Enough of this "do the right thing"--that's going nowhere. I think whatever is working for you at this moment is NOT crazy. The situation is crazy, not you. Thanks for your comment. :o)
Bill Beavers--I think the reason people are often slow to let go of their debt is because it means admitting their lives are not working and there is no hope if things continue as they are. Even though that is often the reality, it's hard to face. Thank you for your comment and thoughts.
Kelly's writing--Good luck! I know how hard it is to make these kinds of decisions. It sounds like you both are doing the best you can. That's all any of us can do, really. Hang in there!
Sandra Bean--Thank you! All the best to you.
myway--Thank you! I'm with you on the Ramen noodles. The trick is adding fresh vegetables and extra seasonings like soy and ginger. They're pretty good that way! I love Jasmine rice too. You can buy a 10 pound bag and live off that and some veggies for quite awhile. And it's good!
Hi tourmaline--Yes, I don't doubt they are changing their tune, at least some of them, but the trouble is it is too late and too little. I think we are in for some huge bank failures, and it really is hard for me to feel real sorry for any of them.
Hi rockinjoe--I like your utility bill gambit! Very creative! I am seriously considering walking away from that cc debt I've been lugging around since my last marriage. I've paid them on time, over the minimum, for years, and they are still dicking me around. I just got a bill from them saying they got my January payment one day late so they loaded my bill with over $100 in fees and doubled the minimum payment. Well, A) I don't think my payment WAS a day late and B) I don't have the next payment anyway. I just don't have it. When I got divorced I missed a single payment and they hiked my interest rate to 29% for three years. So this time, they didn't hike the rate, but they piled on fees and said "Send us a bazillion dollars right now or else." Or else what? It's Citi, and I'm finally to the point of, oh screw you guys. Come after me. I've got some dog kibble and an 84 Honda. Knock yourselves out ye scurvy bastards. But it feels bad. It's not like I didn't try, but I think I'm done trying now.
Hi Pam,
This is all very thorough and sensible, and I know it will help a lot of people. I'm so grateful that this time around I'm fairly okay (I was very much NOT okay in the 90s recession, so I know what it's like, and it isn't fun!) People need to plan for the long haul this time around, and I wonder if you'll see a mass exodus from those big one company towns like Wilmington, when the businesses shut up shop. The problem then moves elsewhere of course. A bit like people fighting for the lifeboats on Titanic.
Things are not so great in the UK either, and the news is full of job cuts and companies closing. Have you read the Chicken Little hub? There's a great video clip posted on there of all the TV investment gurus 18 months ago saying that the fundamentals were all still in great shape, and that people should buy banking stocks because they're looking cheap! (LOL!)
Hi Amanda--No I'll have to check that one out! I've been wondering that myself, about towns just shutting down. I know during the Depression, men wandered all over the U.S. looking for work anywhere they could. There are lots of really moving Margaret Bourke-White photos from that era showing that trend. I know that I ended up moving for a job, and now that job is gone and much of this town is shutting down, but the town I came from is much, much worse. I'm staying put unless they start rounding us up and making sausage out of us or some such horrendous thing. I think we will go through a very, very hard period, after which life will be very different for all of us. Right now it's hard to see what that life will look like, but I'm going to ride it out as best I can.
I have long described the Credit Card companies practices as "usary," so I was happy to see you use it here. Now I mostly describe it as "legalized loan-sharking," and it is. It is an outrage what our government has allowed corporations to do to its citizens, picking our pockets and now, picking the meat off our bones. The notion that the politicians "work for us" is laughable. In theory, yes, but when most of these montebanks get to Washington, they veiw the people who elected them with disdain, and behave as though they know what's better for us than we do. Even if they aren't taking money from these corporations, there are nice, warm seats on these companies boards that pay them high dollars to basically go to a couple of meeting per year when they 'retire' from politics.
Back to "legalized loansharking," another thing that many people don't realize is that fairly early on in the 'give us our money or else" stage, the original debt holder sells your debt to a collection agency, who in turn may sell it again. While the collection agencies will make you believe you they represent XYZ Corporation, they in fact represent only themselves. XYZ washed their hands of you when they sold your debt, and your credit is already ruined.
It's like this: You borrow $500 from Big Pete, but through interest and late fees you owe him $2000. You cannot pay Big Pete back. Big Pete is BIG and fat, and he doesn't feel like chasing you around for your measly little 2 grand, so he sells your debt to Nicky "The Knuckles" for $500 getting his original money back. "Knuckles" tells you to pay Big Pete back the 2 grand or he'll show you why they call him "Knuckles." You just don't have the money and while "Knuckles" gets ahold of you and scares the bejesus out of you--threatening to hurt your family and your dog too--he is on parole and he ain't goin back to the joint just on account of your measly $500 bucks. So he sells your debt to Lenny "The Legbreaker" for $200. Lenny tells you that if you don't pay Big Pete the $2000 bucks, he is authorized by Big Pete to break your kneecaps. "But Big Pete is dead," you say, "He was killed in that unfortunate buffet incident." "Don't matter," says Legbreaker, informing you that he is now collecting on behalf of Big Pete's widow, "Plus Size Susan."
Sometimes understanding how this works--that the original creditor actually dumped you a long time ago and has no interest in your debt--plus the fact that your credit is probably already ruined, helps us not feel so horrible about not being able to pay these bills off. Citibank--or whoever--already got their money for you, and the people after you now are only the vultures. The ones the government allows to pick over our bones. I say screw 'em.
My husband and I had an MBNA card once. I'll admit the purchases we used it for were rediculous (we were quite young...and stupid). By the time we realized we were in over our heads, we were pretty screwed. The easy thing to do would have been to file for bankruptcy but we didn't want to go that route. But wow! MBNA was pretty ruthless! They called a MINIMUM of 15 times a day, every day. I explained to them why we hadn't been able to make the payments every month and that we did intend to pay them, we just didn't have it right now. They didn't care. One of the reps flat out told me "I'm going to call every 15 mins until we receive a payment." And he did! I had to change my phone number! One of the reps called me a stupid bi**h! And when I got the supervisor on the line, all he had to say was, "We'll discuss that after we receive payment.' It was unreal.
Here's the kicker though: we eventually paid off the account. Zero balance. (we did settle for 1/2 the amount we owed). 9 days later we received an application in the mail from...you guessed it! MBNA! It was accompanied by a letter asking us to come back! Never, ever, ever will I own another MBNA card!
fantastic hub, and I really agree with your list of priorities for payment.
Hi Christoph and Sandra.
Watch the movie "Maxed Out" sometime. It's a recent documentary, and it will shock you. Two women are interviewed off and on during the film (well, lots of people are interviewed, but among them are these two women). The women turn out to be the mothers of college kids who got offered credit cards at orientation, took them without telling their folks, couldn't pay when the balances got too high, and then killed themselves over it. One of the students still gets 'free credit card' offers from the same company that so ruthlessly harrassed him while alive--years after his suicide.
When I worked at the insurance company call center I knew a guy who was in collections for a bank before he came on to the call center. He used to brag about physically chasing a guy he was trying to collect an auto debt from. He'd see this guy on the street, jump out of his car, and chase him down and verbally abuse the guy. The guy never did pay his debt and my coworker eventually got fired from the bank for chasing people on foot. Later he got fired by the insurance company for verbally abusing a supervisor.
I always used to think, man, this guy is lucky nobody shot him. Maybe by now somebody has.
I think it's all getting to the past ridiculous point pretty fast. I know people who defaulted on their cards--both of them said they were called constantly at first but after awhile it tapered off and then stopped. They just didn't answer.
Wow, great hub! I'll have to check out that documentary. I knew CC Companies were evil, but that's just so sad. I even had a rep call one of my neighbors and tell him to come and tell me to answer the phone!!!
Thankfully my kids like rahman noodles. They just have so much sodium, but when you're hungry I guess that's not much of an issue. Things are not so bad down here in the south, but that doesn't mean it won't be.
Nicey, Pam :)
Hope I don't get into CC debt, but under current environment you never know - so I might end up using your advice after all...
Did you see Hal's series on depression survival? Interesting stuff, too :)
I know one of the most devastating effects of credit card debt and letting go of it is letting go of a moral line -- the belief that you pay your debts, that you are an honest person. Thanks for this hub, Pam. You've laid it out well and I've been in that kind of situation more than once - way too many times in fact.
Most of it not carrying credit card debt though. I went bankrupt in the 80s and wound up with even my student loan written off during years of extreme poverty, before the Bush administration tightened up on both to the point that they are not remedies for people who can't work any more.
But here is one added thought for the many out there who are carrying everything from medical debt to purchases that seemed reasonable at the time and watched it all go way way over budget.
Stop and add up all of what you actually bought. Take the time to do that. If what you have paid is over that, probably way over that given the years they've been practicing usury, you are no longer repaying a debt. You're just being continually ripped off by a loan shark that presented as a reasonable convenience years ago because it had a logo and a building and was associated with banks and other trustworthy authorities.
Understand the difference there, because someone who's honest enough not to want to let go of their debt needs to know they were acting in good faith all along -- and settle if at all possible for a lot lower than the inflated amount just to clear it out for good so that it doesn't come back to bite you when times are better.
I'm lucky it happened to me in the eighties. I'm no morally better than anyone else for not carrying it, I just got bit earlier in my life and went very shy of it afterward -- went to a cash basis right after the bankruptcy and stuck to it. Later on when I was tempted a few times to get a card for survival needs, the companies looked at my uncertain income and turned me down. Good luck again because I can think of a few times I'd have used it to stave off losing an apartment or some other immediate crisis and then wound up carrying the same kind of debt I did in the eighties.
Purchases that were reasonable in their time turn into insurmountable debt if there's any job loss anywhere along the line, any financial trouble that interrupts a payment. You yourself said it -- you paid horrendous interest for three years for one missed payment. Those practices ought to be illegal. Just flat out ought to be illegal.
Thanks for a great hub.
My biggest survival tip is not to panic. Look at everything you can do and everything you own as potential income stream. Your tools can be used to create things to sell on eBay or in open markets. Your house or part of your house can be rented. Your car is a good income stream if you can do deliveries or anything like that with it.
A drastic and sometimes effective job loss decision especially for renters is to pack up, sell off everything at all that you don't need and want and *love* and move to a place with a lower cost of living. I would rate Internet access way up there with food -- a bit higher because with it you open up more income streams than owning a car does. Treat Internet access as part of "Utilities."
Not all pay for post online services pay out well, it depends on who you are and where most of your writing goes. But sitting up doing HubPages is a lot better way to spend the hours than sitting there mourning the loss of cable TV. It is doing something rather than doing nothing -- and one of mine, eHow, has paid off steadily from the first month I did anything with it. HubPages, Helium, eHow, all of these places have a core membership of full timers who turned it into a job and post enough good articles to get by.
Not on a high 80s Yuppie standard of living, but enough that they're not starving or losing housing. Some actively can pay much better than that. eBay reselling can be profitable for some people. So I would say to anyone recently unemployed or fearing it to start building up some kind of self employment especially involving the Internet. A trickle income that just goes into savings can help ease the disaster when it hits or if it hits, or the online income can become as big as the job or better for those who get very good in a particular niche.
Anytime I was down and out I was able to draw or write or do housecleaning or odd jobs, do something to get some cash in. Food can be cheap -- it is cheaper in some areas than others. It also helps people if you look for bargains at the local farmers market and do some barter, that can keep fresh fruit and vegetables in the menu so you don't kill your health living on breakfast cereal.
Hi mamacoots--I've heard of that call-the-neighbor gambit. Pretty cheeky! Oh well. That will get harder I guess as fewer people HAVE neighbors. The block I left behind in Indiana is only half inhabited...
Hi Misha--Well I hope it never happens to you. That would totally shock me! Then I would know for sure that we all are doomed! lol! Thanks for the heads up on the depression hub--I will check it out.
Robert--great advice as usual, thank you for sharing it. It's hard not to panick but that's probably the best advice of all. It doesn't help anything to panick--all the same problems are there when the fear clears off. Barter is good too--lots more people going to that lately. We may well find ourselves in a post-money economy at some point.
Wow, I think everything has been said. Well, mostly. It makes me mad that Susie Orman is taking credit for that plan even if it doesn't work. It is straight out of John Cummata's Transforming Debt to Wealth plan and he's been doing it for a very long time. I tried TDtoW, but I guess I'm not that disciplined or started too late because the big Bail Out happened and that was the end of paying down credit cards.
Consumer Credit Counseling is a nonprofit service that helps people figure out how best to move forward. Their site is found at http://www.consumercredit.com/howitworks.htm I used them when I was single and over my head. I am not a good financially disposed person. I don't care about making lots of money so I don't have much and I guess what I do get I share too prolifically- at least that's what my husband says.
We are facing a job layoff very soon and I am happy that we have been paying one credit card company to cover such a situation. The rest will be hassling us very soon, as they are my last priority. Criminals are paid last in my book. I'd rather contribute to an energy fund to keep people's heat on than pay credit card companies. Ugh. 30% interest is highway robbery.
I would like to encourage anyone who has health insurance to figure out some way to keep that because it's really hard to find a company to reinsure you when you have no insurance. For the first year you are considered some sort of major risk and they charge you up the yin yang. If you have kids, check into your school system and see if they have health insurance for enrolled students. Ours does-- I used it years ago when my husband's oil company failed to find anything down under, therefore our income and health insurance abruptly ended. Sometimes enrollment is only in the fall, but it's worth a try. The plans offered by the State are pretty prohibitive- who can afford $1000.month when you have to buy groceries? Still, if you can, definitely pay health insurance before credit cards!!! I lived in fear for nearly a year before I discovered the county school's plan for students. I had one teacher at my son's school call my husband and I abusive parents- to his face- because we filled out our field trip form and listed "none" under insurance. Witch.
I applied to work on the Census last week- you take a test and get on a list. They will be hiring in February for the first wave, I hear. Check out http://2010.census.gov/2010censusjobs/index.php for a number near you and keep calling. They pay about $13 per hour in my area, which is amazing for part time, temporary. I haven't heard yet whether I have a job. But it's something to hope for, anyway. There is a test but it is pretty straight forward and if you fail it, you can take it again.
Good luck to all and great hub, p.
Interesting- in Western Australia the headline today is that "WA will ride the slump" - even though BHP (mining) let 6000 people go since Xmas. The interesting thing is that they will- they are saying the unemployment rate will remain around 4%. The reality is what will go is the population - many people moved here for the mining boom and if it goes so will they. My brother may be made redundant in Ireland - if he does they want to be out of the country inside a month - why - because they can't afford to live there - same as WA
I really want to get my IM business returning a few thousand a month inside the next 6 months- no I can't live on that here - but I can fly to Asia and live on it pretty easily. Its not to say I will- I haven't got my partner to the point that he doesnt want to work yet - but it gives us the option. A nice apartment in Phuket inc utilities and broadband can be had for around US$600/month . For north Americans you must have similar options in Mexico and further south?
I know someone who just bought a house in Detroit for $10k - because there are no jobs- but because he makes his money online - he doesn't care- and yes its a nice area - he has a kid!
I think the digital nomad may well be one of the phenomens of the crash of 2008!
Providing we still have communications :D
This hub kicks butt. Thanks. Gary
Wow, interesting comments...
Storytellersrus--Good luck on the census job. I had a friend who did that one year and she liked it. I think I'm going to stay put and focus on what Lissie is focusing on. Can't imagine pulling 2K a month, but then, when I started this in 2007 I couldn't imagine making five dollars. So you never know. I like Susie Orman, sort of, sometimes, but I think she is totally fronting for the banks. I will say this--she's been pretty freaked out lately, so I'd say it's getting ugly now.
Lissie--good luck with your plans, I hope that works. I hope you make 5K a month and move to China. Why not? As for me, I'm right here in Kalamazoo until they drag my frozen body out of the house and into the street. Detroit--wow. I don't know what to say. I'm glad it's working for them. I fear that in another 5 years Detroit will look like a Mad Max movie, but maybe not. For sure you can a cheap house there.
Hey Misha, if we revert to the stone age and all our commmunications go down, I just want to say it was good meeting you! lol!
Thanks Gary! Kicking butt can be fun! :o)
PGrundy, as always, superb advice superbly presented. It appears there are more than a few of us Hubbers facing financial uncertainty or worse. I keep looking around me and thinking -- I know there are people who are already worse off than I am. What are they doing? It's hard NOT to panic, you know? I know I'm waaay tense these days when the 1st of the month comes and I'm scrambling to figure out how long I can hold certain bills. The little "green envelope" from the electric company reminding me my account is past due and threatening to turn off my electricity has become pretty much a monthly occurrence.
I don't know what holds me back from just walking away from or trying to negotiate my CC debt. I like the comment above that in the "new world" credit scores are going to not matter. I wish I could believe that! What if we all staged a mass revolt. If EVERYBODY did it, imagine the impact it would have!
Meanwhile, I have to share one crazy phenom in my world. The one harassment call I get all the time is from Terminex. They hound me for their $95 quarterly fee to get rid of my ants. In the grand scheme of things, ants are the least of my worries:-). Yours, MM
Its fortunate I don't have high credit card bills nowadays, (did in the 90's), but still owe money on a few I have, and its a drain, as I don't make the same income I did before. I started paying off the lowest one, cut it up with big clunky scissors over the weekend, so I am not tempted to use it again. I felt so good. I feel paying the lowest balance, frees me to pay the rest.
This is an honest hub- we need to be positive but also to be aware, and you are always bringing awareness through your hubs. I didn't realize, that there are smaller towns where the residents are dependent on one or two main companies as their job source. It saddens me to think of all these people without work at the same time- in a town where there are no other job sources; makes their situation much more critical.
You've done it again, Pam, another spot on hub. I agree with MM - lots of us seem to be in the same boat. I just hope we can figure out how to make it until the "new world" where credit scores don't matter arrives.
Suzie Orman, like most "firm" people have lovely advice...sometimes for some people. But not for me. If you have no money to work within her parameters, you don't, and that is that.
Good info.
Karen
Great Hub,
Suze Orman works for the credit card companies. You can use a spread sheet and a calculator and figure out her method will cost you three times as much as this method on most debt scenarios.
Pay off your smallest balance first then use the payment that you save to go after the next biggest balance and so forth. The math is simply there isn't that much difference in the amount of debt service between your highest rate and lowest. So by attacking your highest rate first you will take longer to pay off your debts and therefore will maximize the banks profit which pays Suzie to make sure you do it that way. Nothing hurts like throwing more money at the principle. That is if you feel you must pay.
I am with Pam bring them to their knees. Get caller ID and never answer a call you don't know who it is from and call it a day.
I would change the order on which bills to pay a little myself, but I have a lot of skills on being abjectly poor, that some people might not be ready to adopt.
1) Food if you live in a city you pretty much gotta do this one, but it can be done very cheap. Park Squirrels anyone, I personally love them they are much fatter than the wild ones I used to eat growing up. Find an old pacemaker and a car battery and visit the local stream or pond and give the catfish a little taser action and dip up the eats. I love catfish and hushpuppies made with cornmeal very cheap and nutritious.
2) Utilities if you are in your house or rental you want to keep the heat and lights on as long as possible in order to help you with your job search.
3) Car Payment, Work with it or trade down; but, you need a car it can be a house in a tight spot and you need it to get to work in order to get back on your feet.
4) Mortgage Maybe, if you own a home and you are upside down, I would strongly recommend not paying your mortgage for a couple of reasons, banks will not negotiate unless you are about 2 months behind. You can get interest rate reductions then and you can even work on the principle and length of repayment. Point is, it is an easy free two months of rent, as the worst case scenario is they will load the missed payments into the principle big deal. This could be the seed money for your next venture. The moral is they will not work with anyone who is willing to pay the asking price, would you?
5) Credit cards Never again. Bring em down and bring them down hard, never again should we as citizens allow ourselves to be abused like this again.
6) Scrap everything else and don't buy things you don't need. It is Easy to say but hard to do. I like toys what can I say. Except I only buy with cash now.
7) For the truly ballsy get a lot of credit cards pay off as much of your student loans as possible and default on the cards. You can negotiate your cards or declare bankruptcy and get rid of that debt, but you can't do anything about student loans. I like to stick it to the man.
Loved the hub.
TMG
Hi MM--Yes I have the same kinds of thoughts at the first of the month. We are current on everything, but this month somebody will have to wait or do without, and I think it's going to Citi... Thanks for your thoughts on this.
Hi Violetsun-- I like to be positive if I can but it's hard to look at what is happening right now in the country and be too chirpy about out it. I'm getting to the point where I'm a bit scared. Thanks for reading this!
dineane--Thank you for commenting! You know, I've noticed too that Elance has become lots more competitive. Even the lowest paying gigs get tons of bids. I'm not even looking for a 'real' job anymore. There are no real jobs here. Seriously, there just aren't last Sunday the want ads section of the paper was HALF A PAGE long and it was all stuff that isn't real. Good luck to all of us! (Or should I say, like Tiny Tim, "God bless us every one!") LOL!
Peacewmn9--Yes I think much of the standard advice you find is not helpful. You find a lot of "call your creditors right away" advice for when you lose a job, and I don't think that's smart anymore either. Half the time you get a CSR who can'tdo a thing for you and doesn't want to, and the other half of the time they think of how to screw you. Utilities especially have been asking people to pay MORE if they think trouble is coming.
Hi Money Guy--Thanks for your ideas! My son in law shoots and eats squirrels. We've got lots of bunnies and deer here, but if I had to kill what I ate I'd be down to fish and birds. Unless I could get Bill to shoots some squirrels and bunnies and skin them. We did well last year with our garden though, and this year we want to put in lots of corn. I also planted a couple apple trees and will do pears this year and maybe a cherry and some raspberry canes.
Moneyguy: Had to join your fan club- some of your ideas are great! If you ever have a TV show a la Suze Orman, I would watch you. :)
And Pam, I know its not always easy to be positive, especially in situations such as you described where there is only one or two companies in a town that provides jobs.
Off to bed I go, its 3 a.m in my side of the fence. :)
Pam Fantastic hub. I had no idea how bad things have become in the USA. Here we are slowing down. Houses, Cars and increased reneging on debt are happening. Lay-offs have started but nothing like the scale you describe. Our banks are solid (no real exposure to the sub prime problem). Car industry still ok but not great. Our markets are down but simply follow the world wide trend. The government has not had to dole out bale out money to any industry...yet.
Getting rid of all forms of debt and paying the mortgage are sound bits of advice.
Thank you sixtyorso! I appreciate you stopping by and commenting. I hope you guys stay in better shape than the U.S. It's getting pretty scary here.
Excellent hub Pgrundy... reading the beginning about all of the workers laid off was so sad... here on LI we are watching entire towns shutting down. There are more abandoned commercial buildings than there have ever been. And vacant homes are now just an area for homless folk.... its so sad, getting so bad, and continues to get worse.
My job strives to remain open, and its a scary thought to be out a paycheck....
What irks me most though, is that my generation (80s kids) are afraid to have children, because many of them cannot afford themselves,- add a baby to the mix, and we can just forget about it....... what has the US come to when the people fear having children!!!!!?!?!?!!?!? Ugh, it just makes me so sick.
Hi MellasViews--I agree, it's pretty disturbing. Although, right now, it's probably a blessing to be childless. If I had a child to take care of right now, as you say, I'd be terrified. I hope it gets better but I don't see how right now. I think it won't happen soon, at any rate.
Great Hub with great information!!! Most of us have probably made a financial mistake or two - but GREED is the biggest problem! credit card companies being at the top of the list.
IF you still have a job and some extra money one way to get rid of credit cards is to take the card that has the smallest balance and pay a little extra each month on it. Once that card is paid off take the money you were paying on it and apply the whole amount to the next lowest balance card. Repeat until all are paid off.
If you have lost your job, then I agree with your suggestion!
I don't watch much tv but thanks for sharing all the info!
When it's Pam, one can blindfold expect high quality work. Great advice. Although, fortunately I don't have to pay most of the bills you mentioned yet it's always good to learn how to prioritize things. Thx
Thank you Anjali and joyfulpraise!
Every newspaper in the United States should print a how-to-pay-your-bills list. That would leave some chance of word getting out.
Even if 2 out of ten people read it, thats still a percentage to learn.
I think its's tragic the way debt can leave people emotionally . I have just read on aol the follwing story 5 young children and two adults dead because they have lost their jobs , the parents ... sad:http://news.aol.co.uk/man-kills-family-after-losin So anything that can be done to alleviate the stress and anxiety people find themselves under can only be commended .
Interesting hub. I think we have to stop depending on large corporations to take care of us. Diversify. Develop many talents, begin at home businesses, create products you can market and sell yourself while you work away from home. And of course, spend less than you earn.
Having said that, I do think that corporations buying up smaller businesses years ago helped us to land right where we are. I know sub-prime and other mortgages played a big role, but so too did the beginning of huge conglomerates buying up small local companies. Big ain't always better!
And now here we are where a few major corporations own a chunk of a large percentage of all businesses and where major corporations came in and bought up Mom and Pop stores. As best as I recall this buying up of small businesses happened 2-3 decades ago. It happened to bookstores. It happened to retail stores. It happened.
Denise Hubbing It Up!
wow. lookee at all these comments. You struck a nerve, Pam.
You're batting at least a thousand pgrundy.
I guess your list is as good as any. The priorities seem pretty sensible.
We haven't had any credit cards for several years now. It took us forever and we had to jump through a lot of hoops and over a lot of hurdles to get rid of them.
FYI, anything you owe a CC company that they end up writing off will be reported to the IRS by the CC company. They usually won't bother to let you know about that though. If your lender writes off say $5,000 that you "owe" them the IRS will consider that as additional income for YOU in that year. Since you didn't pay taxes on your adjusted income with that extra five grand added in, you're liable for taxes, interest and penalties. I know this is true. They did it to us.
Also be aware that many food banks are already unable to keep up with the steadily rising demand. I know this from personal experience as well as research.
If you or your family are without income, there are usually state agencies that can help with utilities. That probably won't be true much longer if things continue on their present course.
The changes that are needed aren't going to be made by our governments. They'll simply have to happen in spite of them. Who knows how that will work out.
great hub and really good information.the way you have mention the priorities and credit cards payments methonds and all are really nice.thanx for sharing this information.
I really loved this hub...Luckily I don't fall into the credit card debt problem merely because I don't trust myself with them - Which I'm glad I learned at 21 versus years down the road with family in tow. I do however, have the medical bills which have inadvertantly gone into collection because I work a $10 and hour job. At just 19 already experienced unemployment from a position merely because of budget cuts. Collection companies seem to be almost as ruthless as credit card companies and I feel for people in these situations! Thanks again! -Chrissy
Wow, thanks for all the comments guys.
CWB--the U.S. government is going to have trouble collecting all the back taxes on that 'income' pretty soon. When people don't have jobs, it's hard to pay. On the other hand, maybe debtor's prisons will be part of the next stimulus plan. That's create at least a few jobs, plus some of us will finally have housing. :o)
Great hub, PGrundy.
I myself see the credit card companies point of view, too. They have to charge high interest rates because they run the risk that their customers might follow your advice.
Nets
Well, yeah. But my point is that the industry should be more tightly regulated. Self-imposed restrictions based on sane underwriting would be best, but failing that--and I think it is very clear that THAT is not going to happen anytime soon--government regulation is what is left.
PGrundy,
The way things are going, most likely we'll have government ownership.
Nets
LOL And then, to "satisfy the customer demand", government will unify all CC interests rates, at 39% level :D
Yes, and then tack on any defaults as tax debts or whatever.
You know, what is most frustrating to me right now is I would like to do the right thing, but it gets harder and harder to know what that is. I think a lot of people feel that way. Everyone is off on their own tangent about economics and the free market and capitalism and socialism and all these 'isms' but down here at the Pam level it's just very bleak. I've watched my wages fall over the past 8 eight years from $18/hr to $12/hr to $10/hr and now I have no wages. I've watched my health care costs rise dramatically and now I have no access to health care. I tried for two years to sell a perfectly decent little house in Indiana that I put all kinds of work and love into and got not one looker never mind a buyer--and now the house is worth less than a quarter of what I paid for it and half the block is vacant and boarded up.
So I'd like to pay Citi, just pay them, just pay everybody and be done with it, but I can't get a job to save my life. I just LOST a fight-to-the-death over a crap job that paid $10 an hour for 15 hours a week with no benefits. I'm 55. I'm freakin' doomed. I'm not trying to be dramatic or wallow in pity, I'm just being real here. Any day now I expect some government agent to show up at my door and hand me over to Purina to make cat food.
It's so damned depressing.
Since we are going to be morbid, I think we should grind up billionaires to make chile for the soup line!!! The only issue I see with that is it isn't very nice to feed rotten food to needy people. :-)
TMG
LOL! Thanks Money Guy! At last, a practical suggestion!
Seriously though, watching these guys in Washington hash out this 'stimulus bill' leaves me kinda feeling like nobody has a real handle on the severity of what is going on. I don't have a lot of confidence at this point that anything they manage to pass is going to do much for me personally or most other people like me. Where is this recovery coming from long term?
I do wonder though why people aren't doing more violent sorts of things. Not that I think they should, but it just seems like, if I were Richard Fuld, I'd wanna watch my back. I might not go out much right now.
Pam,
A good read of History will tell you that they very much know and understand the severity and just don't care.
I am not surprised violence has not erupted as the program paid for by the industrialist has worked very well at creating a nice and easy to control base of subjects to serve their needs.
That same read of history will also tell you that people will break and they will result to violence, and it is what they should do, as it is the only way our kind has at it's disposal to free itself.
TMG
Unfortunately :(
The even scarier part of the history exercise is that the first person or group to lead the violence is usually worse than what they replaced. Cromwell, Hitler, and Stalin come to mind at first, but after that things tend to level out, but it usually takes a generation for stability. Which doesn't bode well for us.
On the upside we are witnessing a future history class in the making.
TMG
Yes it will get ugly. We just don't know the moment. Everything accumulates at the top. The top won't relinquish anything. The bottom gets fed up, starts throwing the top out of windows, hanging them in the public square and so on and so forth. Then the revolutionaries take control and act even worse than the capitalists, so they get thrown out windows and hung in the public square--In come new revolutionaries. Welcome to United Banana Republic of America. Who wants to be dictator? Wait a few weeks, everybody will get their turn. I'm past depression into fear now. I think I liked depression a bit better.
another good article
Great American Socialist Revolution in the making :D
With friends like us Pam you don't need enemies. :-)
TMG
Well comrades, at least for now we can have a laugh about it here. :o)
If you don't see me at HP for more than a week, don't eat any cat food...LOL!
I love your writing, I'm new to hubpage and I have been following you from day 1. The way I see it,is that we are being sold off to German and other.. which come in,get what they want and roll out!!
Thank you for commening fatuisred, and wecome to Hub Pages!
I saw the 60 minutes show and it made me teary; there are familes in real trouble right now. I really wish that, in addition to the gov creating jobs and providing more help for those between jobs that we should create an "adopt a family" program where those who have a job and a little extra cash could provide cash directly to the landlord to help with rent, help with mortgage payments or even groceries in the form of debit cards that could be used for food. It should be handled just like a charitable gift which is a tax-write off and would encourage people to help.
We have some friends here on Hub who have lost their jobs. I don't think that there is anything that is much more devastating than losing a job; financially and mentally.
Great Hub, as usual, Pam.
Madison
Hi Madison. That is such a good idea. I think the key to getting through this is going to be for everyone to work together. We've become very isolated from each other over the past 20 years or so. That will probably change as people have to barter more for goods and services and money is less plentiful. I don't think it's all bad but it's scary. That 60 minutes bit made me weepy too. Thanks for commenting.
Here you go Pam,
Just declare part of your house a museum and then you can collect millions in Tax Subsidies:
"Cabela's has been so active in seeking public money that it probably deserves a subsidy newsletter all to itself. In the past month or so alone:
Officials in Hoffman Estates, Illinois approved $18 million in direct subsidies for a new store, part of which will be designated a "museum," allowing Cabela's to save an additional $5.5 million in property taxes over 20 years.
The Louisiana Supreme Court upheld a plan to use sales-tax increment financing (STIF) to provide $50 million in subsidies for a Cabela's in the town of Gonzales south of Baton Rouge.
Reno, Nevada's City Council gave initial approval to a $54 million STIF deal for Cabela's.
A plan to use $21.9 million in state funding for a Cabela's in East Hartford, Connecticut became a matter of controversy in the state's gubernatorial race. "
Corporate Welfare at its finest.
TMG
OMG. That's crazy. I'm going to get on it right away. That is so nuts. It seems like every day something new like that is in the news, making the rest of us feel like suckers.
I'll agree with your rankings of who gets paid first.
Credit cards will always be a problem for consumers since the penalties for soliciting people are very lax. The laws are never stiff enough as loopholes are always found to let the sharks come for those unknowing shoppers.
Great Hub enjoyed the read with lots of useful info.
Oh wow, this is the best, most awesome, incredible advice. Wow. I am so bookmarking, stumbling, printing this bad boy out for myself.
You know I was reading all the comments and pretty much echoes a lot of what I am thinking. So it is time to sit back and let us normal people take care of ourselves. So many ideas and you have helped out a ton in my reasoning as well
Thanks! I hope things get better soon but I doubt they will. Thanks for stopping by. :o)
Thank you for this - it makes me feel a whole lot better!
A few years ago I made an online payment to Household Credit Services - they owned our Union Plus Mastercard. Because my bank had just gone through a merger, the payment did not go through. My bank immediately called to apologize, and corrected the problem. My payment wasn't even late, and I had never before missed a payment with this or any other card. The Household Credit collection center started calling me the next day. Evil, abusive phonecalls during which I was belittled and threatened. The calls continued for two weeks, even on weekends, up until 11pm (I thought that was illegal!). No matter how many times I tried to explain that it was a bank error, which had been corrected, I was on The List. In the end I got a cash advance from another card and payed my Household Credit balance off in full. I still have the card, because I read somewhere that closing a card is bad for your credit score. Anyway, that's my evil credit card story.
I live in upsate NY - our entire state is bankrupt! Our "survival plan" right now involves learning how to garden, getting a wood stove and hoping we can keep our house. I have long considered that, if it comes to it, I can use our still pretty good credit rating to take out cash advances on all our cards, close out the bank account and move. Doing so would make me feel like a horrible person, but I guess I could get over it if it meant the kids could eat and we'd have a roof over our heads, right? I've been wondering lately, do we even remember how to live without credit anymore? The first year we were married my husband and I didn't have credit cards, but we also ate a lot of maccaroni and cheese. The idea of ruining our credit and starting over seems like a huge step backwards, but maybe its a better idea than the struggle we're going through now. If I'm so stressed out that I no longer enjoy my life, what can good credit do for me? The idea sounds more enticing every day, but I can't quite shake visions of cult-like communes out of my mind.
Hi alasbabylon,
I hear you. Wow, it's just getting scary out there. I just read an article in The New Yorker about different end-of-civilization theorists called "doomers" that was pretty interesting. I'll probably do a hub about them, it was pretty intriguing. Most of them had the doomsday visions you mention about an impending cashless nomadic wasteland where America used to be. I think pretty soon here credit cards will be irrelevant because no one will have them. I still don't see how this mess gets better. When I figure it out, I'll be relieved, but so far, nothing looks all that encouraging.
Well, hang in there. And thanks for commenting.
I dont have a mortgage yet but I do have too many bills to pay. This has at least helped me decide which ones to pay first, cheers!
Pgrundy,
I really enjoyed this article. I am among the several that are unemployed and have been since the first part of December. My partner and I are really struggling with the bills and trying to put food on the table. It is quite the hardship. I never thought that it would be like this for us and that I would not be able to find a job. I am getting the feeling that I am unhirable. I have worked in the medical field most of my life and I still cannot find employment. It is really tough out there. I am going to show this article to my partner and see what he thinks. I hope it will be helpful for him and us.
Thank you for writing it.
Sevaggia
Thank you for commenting rambo & sevaggia!
Sevaggia, I know how you feel. I live in Michigan and before that I lived in Indiana for most of my life. I have watched my earnings fall and my expenses rise over the course of the last decade, and now I am working for myself after giving up on finding a decent job around here. I think it is very hard right now, it's not you, it's just that so many places are laying off, and for every new job that is advertised there are 1,000 applicants. Hang in there. I hope it gets better for you soon.
Very good article! You have those down correctly.
I must add that there are agencies out there that can help you with some of these things. If you get in a bind most communities have a program that will pay your electric. This is usually a one time shot thing. So if you get in this situation take advantage of it.
When it comes to food there are food banks as we all know. There is also Second Harvest. There is no requirement for anyone to use this. They have meals for a family of four for about $40 a month. The only requirement there is is that you are a person that eats. Look them up on the internet for a place near you.
Thanks Sandilyn. Great info too about Second Harvest. I looked them up--if anyone is interested their website is www.secondharvest.org
I really agree with your list of priorities for payment. Really great hub, fantastic job done
Great Hub filled with useful information. Thanks for sharing.
I'd have to put the car payment right up there below the mortgage payment, because without a car how are you gonna get to work?
Great lens! I immediately said rent! Yes, having a place to live is always the best, but it looks like alot of people let that go first!
What is sad is that most Americans can easily find them selves in this situation ofter. The remedy is to fix expecting a set income from and employer. The rich get richer because they figure out how to produce money themselves....no matter what market they are in or economics.
God didn't create us for us to live this way.
Teach 'Em to Fish,
Billy Anne Crews
I agree Billy Anne. We shouldn't have to live this way. I don't know how we're going to get good jobs back in this country, but that would help. Thanks for your comments.
Pam, fantastic hub! Yours was the same priority list I made a couple of months ago. I have to say, my husband didn't agree with me on the credit cards, but there was nothing that could be done about that. I felt really guilty for a while, but I'm glad I made the choice I did, because quite honestly I we are holding our heads at water level and wouldn't be able to if I hadn't made that important decision. The sad thing is, if I had been given a loan for my cars (which are paid off), all debt would have been cleared completely. It was when they wouldn't give me the loan I applied for (because at that time no one was getting loans) that I finally decided I had to make the decision that was best for me and my family and I'd paid way more at that point than anything was worth, so they could get screwed. What really got my gander happened long before that. A credit card company that was, I assume, on the brink of going under last summer, and decided to lower my (and probably many others') credit limit to below how much I owed.
Thanks for this hub that made me truly feel confident about my decision.
Hi Frieda,
If you get a chance, check out Elizabeth's Warren's book on the middle class and debt. It will make you feel better. She has been a tireless advocate for consumers for years and she has nothing good to say about these companies. There's also a really eye-opening movie about credit card companies called "Maxed Out" that's worth watching. Good luck to you!
Pam, very enlightening hub. I have been in the same situation as most of the hubbers are experiencing. I have been a single mother for 10 yrs after my husband passed away. From stay home mom to going back to work was not easy. I learned to live according to my means except everything can turn against you. ssuddenly I found myself in deep trouble. I really thought i might lose my house because my part time job does not cover my morgage alone what more the rest. Anyway, I am going to apply for loan modification so I can keep the roof over my head and my payments at 31 % and not 68%. Credit cards really sucks especially when you start applying for a job and your credit is not so good, we also lose out on this. Isn't this a Catch 22? Hope the economy does not really sink or we might end up being a new republic under another country.
Thanks again.
Hi Maria--Things can go wrong really easy even when you are doing all the right things. Lots of people are in your situation right now. I agree that it isn't right to turn down a person for a job over a credit check--that is messed up. Abraham Lincoln filed for bankruptcy before he became president--Imagine if we'd had that rule then! Good luck to you and hang in there!
nice hub dude
great hub with great content. thanks for sharing these valuable info.
I want join ur group
Very insightful, money-managing hub, thanks!
very good post. Check my blog for Free and Easy ways to make extra money to help pay your bills http://HelpPayingBills.blogspot.com
Hi Pam,
Great hub!
Settling credit card debt seems to be the rage right now judging from the number of commercials on tv and the radio. Trouble is, most settlement companies charge around 15% of your total debt - upfront, before you start banking a dime. These guys are getting to be as bad as the credit card companies. Kick you when you are down...
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I just set up a hub for protesting credit card usury at: http://www.dont-pay-credit-cards.com Pam. I like the order in which you have put the bills. Credit cards are unsecured. Also houses under water can be walked away from unless there are recourse loans.
Hi bgamall--I agree. There is really a limit to what credit card companies can do to you if you default on their usurious debt. It would be great to see a nationwide protest. Thanks for the link.
From all the comments, it is clear that debt is a major concern for many folks. When I sit down and try to figure out where the money is going to come from and which bills to pay, I am reminded of a "Rosanne" episode. Her bill paying method was "Pay the pink ones and throw the rest away."
Hi lafenty,
I remember that! I love Roseanne. Great show, good method. Thanks for bringing it back. :)
loved your post.i will disagee with one thing having been with no income before, if your making no payments and you make a less than owned settlement with just one company.Then when the rest start calling and you tell them what account you made a deal with,and you tell them look your not the only people i owe,and you tell them if you dont want the sellement let me know cause im gonna go down my list and whoever makes a deal will get paid.all the others will get nothing.its amazing how they come around.One company theated to take every thing i own unfortantely i didnt record the conversation.if i had the collection company that called would have to pay my card off.i do live in 1 of four states where they can't even garnish your wages.thanks,god bless texas.and bank of america who hires idiot collections companies,boa you can go screw.agains thank for your hub and letting me vent.
Hi ucandoit--Thanks for venting! And thanks for sharing your experience and that tip. Good luck to you. :)
Hi,
Yes, I agree, take it easy on the people who are in credit card debt. I've been there and it took me two and a half years to get out of it.
I put together a Hub which explains how I finally got out of credit card debt. Take the time to visit my profile and you will see the Hub there.
This Hub was an interesting read. I learned a lot. Thanks.
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Gosh, Pam. What a helpful hub this is. I really liked your list. The only thing that I might tweak is that I've heard from other financial advisors encourage debt-tees (not a word) to pay themselves first...But if it means starving to death or facing poverty is wholly impossible.
I also liked the fact about credit card issuers encouraging college students (especially first semester freshmen) to apply for credit cards. I was a victim and am just now recovering from it.
Thank you again, Pam. I'm sure this helped oodles of people.
Thanks dohn! If you ever want to see something really disturbing, rent the documentary "Maxed Out". It's by the same guy who made that documentary about eating McDonald's for a whole year. It talks a lot about credit card companies targeting college students. Good stuff.
Your list of 'who gets paid first' is wonderful. Credit is important to our life, but we should never make it our life. A bad credit rating isn't the end of the world, in fact it can be a new start. It's easier to settle for less than what you owe when you're in collections.
Hi EZSAYiz24K--I actually think at this point that working people have an obligation to default on credit cards debt. Stop paying, cut up the cards. Imagine what would happen if EVERYONE, or even just 1/3rd of the people with outstanding balances did that? It would bring the bastard banks right down. I know that sound extreme but it's where I'm at today. Thank you for your comment. :)
Teresa McGurk says:
10 months ago
Thanks, Pgrundy (is it Pam?). This is sound advice and very heartfelt. I have serious credit card debt and yes, I paid medical bills with the cards.
I put my house on the market, thinking that the profit I would make would wipe out the debts I had. Ha bloody ha. Wishful thinking at its most optimistic.
Now I'm scraping by, for the moment, but the idea you suggest as a means of handling the credit cards is looking very tempting (I don't want to NOT pay what I owe, but I don't want to make minimum payments for the rest of my life, if there is a way to settle my debt).
Thanks again. My friends told me I was crazy when I rented out my house and moved into the camper, but while it's a slightly desperate plan, it has paid off. I get the feeling I'm not the only person doing it, either, and certainly know that the women in LA who are sleeping in their cars now because they are homeless would prefer a camper. . . .