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Why do you want to increase your limit? Getting a balance transfer shouldn't require increasing your old card's limit. Get a new card, transfer the balances, then stop buying things on credit and not paying the cards off.

Regarding the car, you probably want to get the loan discharged by the bankruptcy (Chapter 7,if that option's still on the table), then lose both the car and the debt you have beyond its value.

XorCist wrote:

yea but how does one get rid of a car that has a loan that is 9K upside down? yea our payment is 426/month

Once again, you need a bankruptcy attorney. S/he'll advise on whether there's a way to play hardball with the lender (who will appreciate the loss of $29k in Chapter 7 even less than $9k in a loan breach) or whether you have to file in order to lose the debt.

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do you know the name of the grant? im looking at grants.gov, and cant find one.

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I re-read this before I posted it and recognize it's a little harsh in some spots, but this is exactly what I would say to a close friend or family member or what I would do myself if I found myself in your situation. If you don't feel like reading it, just stop now.
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So i've read through this thread twice to try and not miss something obvious, but I don't think this question has been asked yet - why are you going to school? Were you laid off because you lacked education? Do you have another job already lined up after you graduate? 6 hours a day is a pretty heavy credit load and I would assume a pretty large tuition bill that is only adding to your debt. I am a firm believer in education and applaud you for wanting to better yourself, but unless going to school is going to fix the situation you're currently in, it's only making it worse right now. I would suggest doing whatever you can to find a job. Any job. Two part time jobs. Whatever it takes. Go to school part time at night if you need/want to, but full time student when you're in your situation doesn't seem to be the answer.

Do you have a budget? Do you follow it? Have you dropped all your expenses to the lowest possible? Do you both have cell phones? Cable? go out to eat? Seriously - if you haven't taken a good hard look at the decisions and spending habits that have gotten you here, bankruptcy would only treat a symptom not the problem. Don't buy >$30k vehicles and never new. Yes, they're nice and reliable, but so are 3 year old vehicles that cost half as much and if you're handy, 5-10 year old vehicles that cost 1/10th as much. The fact that you have that much credit card debt would tell me you aren't using credit the way you should be. California has got to be expensive to live in. Have you expanded your job search to less expensive areas?

It was mentioned earlier in the thread to check out Dave Ramsey. If you don't do anything else today, take the time to read his baby steps. http://www.daveramsey.com/new/baby-steps/

I really hope you and your family come out of this for the better in the end, but it's not going to be easy and it is going to take time.

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clone wrote:

it's nice to buy something new vs someone elses junk.

Yes, but the problem with new cars is they lose a huge amount of their value in the first few years; so if you finance most of the purchase cost, the loan is underwater until you've got it half paid off. That's not a good place to be if you're on shaky financial ground to begin with. If you want a reliable vehicle without spending a small fortune, you really should buy a car that's at least a couple of years old (but not so old that it's starting to wear out).

You're in a state of emergency, you've already moved in with your parents, things aren't really going to get worse for you, filing bankruptcy is a waste of time as it's not like you owe anyone enough that they'll really come after you for. If I were in your situation, I'd stop paying on the car and the credit cards, save up everything you can from your wife's income and your unemployment, by the time they repo the car you'll have enough saved to buy something else that you actually own that can't be repossessed. Then keep saving, the credit cards will offer a settlement sooner or later, it took me a few years before they got to that point. The finance company on the car will settle as well, but you'll need to have the cash to give them when they call.

If you do this make sure you follow through with the second half of the plan. Otherwise you'll end up in worse shape with judgements and garnishments for the whole amounts + fees and interest.

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hey OP here is what i did with my car when i couldnt afford it any longer to pay on it. i went back to dealership that i bought the car and i asked them if they could help me out. i told them that im having some financial difficulties and if they have a program to buy back my car. and they did and we settled on a price and i walked away only owing less than 4 grand on the car. now this saved me two thinngs. one is the humiliation of having everyone outside watching me get my car repo. two is i saved my credit worthiness and it lowered my credit scored to less than 750 but still above 700. i had over 800 in credit score. you will want to protect that number of 700 if you can as thats the threshold for getting a good interest rate. hope this helps..

sorry took so long to get back to answering your questions
first, i got laid off because the place i worked at was bought out by another company and the offer they gave me to stay there was a joke. less money and less benefits for the same job i had before, so i was laid off when the takeover date happened. i am going to school to learn a new trade, i am going to school to be a pharmacy technician, mainly because I was done with the field I was in before. My previous job was not something that I would physically be able to handle for another couple years, so since the opportunity came, i chose to go to school.
is there some kind of magic words to say to the CC companies to get them to lower my % so i can pay it off quicker? i'm curious as how not paying on the cards for an extended period will have them say "okay we'll give u a good rate to help you out" without it totally screwing my credit for having umpteen late charges. my credit score is decent now (mine is 650 and my wife is 660) the only thing that kills us is debt to income ratio.
as for the budget question...like i said, we moved in with my parents so we pay $0 for rent. I get $1600 per month from unemployment, $426 to car payment, $100 to insurance, $50 for life insurance, $50 for the gym, $120 for cell phone, ~$450 per month to the various CC's i have (minimum payments on all), so that leaves us about $400 left to feed my wife, 3 kids and myself for a month. I have a 10, 6, and 2 year old, so diapers add up too. (we're tryin got potty train the youngest, but she's been in a cast the last 2 weeks because she injured her leg)
thanks all for the tips and advice

canmnanone wrote:

hey OP here is what i did with my car when i couldnt afford it any longer to pay on it. i went back to dealership that i bought the car and i asked them if they could help me out. i told them that im having some financial difficulties and if they have a program to buy back my car. and they did and we settled on a price and i walked away only owing less than 4 grand on the car. now this saved me two thinngs. one is the humiliation of having everyone outside watching me get my car repo. two is i saved my credit worthiness and it lowered my credit scored to less than 750 but still above 700. i had over 800 in credit score. you will want to protect that number of 700 if you can as thats the threshold for getting a good interest rate. hope this helps..

what did u do to get another car tho? we have no savings to go and buy another car. we're already a 1 car family as it is.

Why in the free world are you paying $50 a month for a gym membership? Run around the block, do some pushes/situps at home, and pocket that $600 you are basically throwing away. Your car payment is also insane. For the kind of money you had best be driving something really nice. I'd also say life insurance is a luxury item, especially for $50 a month. I'd drop that too.

I'd recommend not having anymore kids as well!

Make a budget.

I don't have any experience over this (too young), but I remember my stepmother spending all my dads hard earned cash and driving us into bankruptcy, even though we lived on 5 acres of property, had 4 cars, and a quite large swimming pool. It took a very long time, but my father did eventually recover from those days and now has quite good credit. However...your situation is really not that bad. You barely make less money than I do, and I work full time. If you add in your wifes money you probably make more.

You need to cutdown on expenses. Do you drink/smoke? Stop. Don't eat out (this one is super important, youd be surprised how much money people blow in fast food every month). Research recipes for spagetti; pound for pound thats one of the cheapest things to eat. Drink Kool-aid (or Flavor-aid, the off brand) instead of soda. Rexamine your cell phone bill and see if you can cut back on it. Buy generic EVERYTHING. Buy in bulk when you can. Barter where you can ( I'll fix your computer if you fix my car, etc.) Ride a bike to nearby locations instead of driving.

I have found hitting up grocery stores in the late evening is a great way to score some really cheap bread/muffins. One time I got a whole bucket of fried chicken for like $3.

If you have kids old enough: educate them about what is going on. Watching my dad go through bankruptcy really helped me out in life. I still follow almost all these tips. Let your kids learn from your mistakes.

When you do get back on track (and you will), keep the good habits you've learned. My uncle is a VP for a large bank in America, and he still buys off brand laundry detergent. Budgeting well knows no price limit.

EDIT: Actually read the thread and added in some stuff.

XorCist wrote:

canmnanone wrote:

hey OP here is what i did with my car when i couldnt afford it any longer to pay on it. i went back to dealership that i bought the car and i asked them if they could help me out. i told them that im having some financial difficulties and if they have a program to buy back my car. and they did and we settled on a price and i walked away only owing less than 4 grand on the car. now this saved me two thinngs. one is the humiliation of having everyone outside watching me get my car repo. two is i saved my credit worthiness and it lowered my credit scored to less than 750 but still above 700. i had over 800 in credit score. you will want to protect that number of 700 if you can as thats the threshold for getting a good interest rate. hope this helps..

what did u do to get another car tho? we have no savings to go and buy another car. we're already a 1 car family as it is.

well if you can go to another dealership and try to get one thats less expensive say under 5K but a good reliable car. but you may have to wait for a week or two before you can get another loan. as for me i had another car thats paid for so we didnt need another car. good luck on your pursuit of a transportation.

Gail Vaz-Oxlade does a bunch of TV shows here in Canada about getting people out of debt. She has some good worksheets on her website including the recommendations on % of income to be spent on the various things http://www.gailvazoxlade.com/resources.html

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Generally you can't "do what we did before cell phones" because cell phones have killed off most payphones as well as many landlines in places where they used to be available, but no longer are. Also, with a large family and one vehicle, there's going to be a fair bit of car coordination going on throughout the day.

However, getting out of the contract and switching over to prepaid might be an option.

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Seriously, as far as cell phones go, you can save quite a bit going to an MVNO/Prepaid setup. Page Plus, Straight Talk, Net10 all have great options that cost substantially less than what the big carriers charge. Your $50/mo bill could possibly be cut down to $50 every 3-4 months depending on your usage....

I agree with getting rid of the gym membership. Going for a run or a ride on the bike is free.

The life insurance policy I would personally keep as a hedge against things going even worse for your family should the unthinkable happen.

As for food, I know some folks around here find this objectionable but a family like yours would probably qualify for ~$200 in food stamps and S-CHIP health coverage for the kids. Not pretty, and nothing to be proud of, but in your situation you have to do what you have to do - especially with your kids. And I certainly hope you took advantage of the EIC and Additional Child Tax Credit on your 1040 this year.

As for the vehicle? I would be done with the whole thing. See if a credit union can help you get an unsecured note on the portion that is underwater and then sell thing and buy something cheaper that can still meet your needs. They probably would go for it if you can make the case that you'll be able to bring your DTI ratio down. Yes, used vehicles require more maintenance, etc, but my 20+ year old accord still gets me around with annualized maintenance costs far below what the payments on a newer vehicle would run.

Your credit cards? Defaulting and saving up to make a settlement might be worthwhile approach. Now this would make getting an unsecured note from a CU next to impossible, but if you can get the timing right it might be possible.

All told - in my opinion you do have a way forward that doesn't involve a BK filing. Whether it is worth doing or not is up to you.

clone wrote:

Yes, but the problem with new cars is they lose a huge amount of their value in the first few years; so if you finance most of the purchase cost, the loan is underwater until you've got it half paid off. That's not a good place to be if you're on shaky financial ground to begin with.

vs a night out for dinner where you lose 100% of the value by morning, or going on a vacation which loses 100% of it's value 5 seconds after boarding the plane home, vs buying electronics vs buying a boat,

Put it in context. Someone who's so hard up for money that they're thinking of filing for bankruptcy shouldn't be doing those things either!

The biggest issue I see here stopping you getting through this easily is you trying to hold on to your credit score, which filing for bankruptcy will destroy anyways. Face it, you're broke, you're barely getting by. You're going to be a renter for years to come, which isn't a bad thing. As long as you go back and settle your bad debts they won't haunt you, you're not going to have perfect credit, but you don't need perfect credit to buy a house, you need a real down payment and a favorable debt to income ratio with no outstanding bad debts. By the time you do finally have income you'll be able to settle your credit cards for probably 1/3 of what you owe now if you face the reality that paying them isn't important right now. You can't take care of your family on 400 a month unless your parents are paying the food bill.