Today I am in Debt Darkness

I knew there would be times like this. We were paid on the first of the month. I paid some bills and purchased groceries and household supplies.

I even pulled out some cash as a safety net.

I continued to check my bank account to see whether the bills cleared. After 4 days the house note still hasn’t cleared. So I checked the mortgage company website and no pending payment was listed, so I submitted the payment for almost $2900.

Unfortunately I only have about $2600 in my account now. I’m expecting another $200 in a couple of days from a FSA (Flexible Spending Account) reimbursements. So that still won’t be enough to cover the mortgage.

I’m feeling extremely nervous. I am not sure if I made the online payment and it was rejected or if I simply wrote and marked the payment on my ledger but forgot to actually make it while I paid the bills. Regardless, there is not enough money in the account now and I don’t get paid again until the March 14, next Thursday.

It’s bad enough that we won’t have any money to live off of for the next week, but now our mortgage payment is in jeopardy. I’VE NEVER NOT PAID MY MORTGAGE. That’s the bill that I always pay first because I don’t want to take any chances with the mortgage. Now I feel awful. This whole financial situation seems to be slipping into an abyss of darkness. There’s already a whole slew of bills that were knowingly going unpaid, and now the mortgage might be among them. I can’t explain how demoralizing this situation has become. Any advice of words of encouragement are welcomed.

DEBT TORNADO – A New Method to My Madness

I don’t feel that my debt snowball is getting me anywhere. The problem is I don’t have enough money to make all of the minimum payments, let alone pay anything extra on the smallest debt. Therefore, I have decided to implement a a new method that I have coined, DEBT TORNADO. It works like this:

  1. Pay a large designated amount from one of your paychecks towards the smallest debt until that debt is paid in full.
  2. Take turns paying the other minimum payments of the debts that are not being paid due to the DEBT TORNADO payment.
  3. Still go in order from smallest to largest debt so rinse and repeat until all debts are paid, or at least until enough debts are paid to where you can transition back to the conventional SNOWBALL.

The DEBT TORNADO has the promise of tearing up my financial life so any moral victories obtained from winning by erasing debts will be needed. I am anticipating late fees, credit damage, and even threats of debts being sent to collections. This is why it is will be particularly important to take turns paying the other minimum payments. Have you ever heard the saying, “If a dog starts barking, throw it bone?” Honestly, I’m very afraid to try this new method. However, I finally realized what Uncle Dave Ramsey has said all these years… My hair is on fire!! This is an emergency that so I’m taking this chance because I think that it’s my only way out. My only alternative is to struggle making minimum payments until I’m dead and still not be able to make all of the payments. I guess I just don’t have anything lose at this point. Please let me know what you think in the comments below!

Mini Update! And the Illusive 3rd Paycheck

Hi! It’s Debbie Debtor…

Is anybody out there? In my last post I told you that I was trying to decide whether to use the last of my bonus to pay my car notes ahead or knock off a few small debts. Well I decided on a hybrid. I paid off my smallest debt, a hospital bill of $2400 and I used the remaining $5,000 to pay the car note ahead through August. I’ll have to try to pay more periodically to get it paid through December. Last year I only had it paid through September and my finances went on a tailspin starting in October because it. From October until I was paid my bonus in December I was in the most financial stress I’d ever experienced because other bills were unpaid due to the car and to be honest I just got tired of overdrawing the account paying bills when there just isn’t enough money. So I just didn’t pay. And they called and called and called until I got the bonus and paid nearly $10,000 to catch up credit card payments. These payments were humongous. Some had grown to over $1,000.00 with me missing the November and or December payments. Sigh….thinking of the situation has caused my heat to beat fast so I’ll stop.

On a happier note...

Tomorrow is the third pay check of this month. At first I thought that I was hitting the jackpot; however, I soon realized that all my same bills would be due at the first of the month as usual and that I would not have any extra money anytime soon.

Thanks for listening,

Debbie Debtor

The Journey Begins

Thanks for joining me!

Hi! You might as well call me Debbie Debtor! I have messed up really badly and now I need to fix it fast! So I need your help for company and encouragement. If I had no hope I would tell you that I have ruined my life and the lives of my husband and children. I don’t know how, but I still have hope that I can turn this around.

I’ll warn you though, this is the worst situation I’ve seen. Worst than any story I have ever read on a blog or heard on Dave Ramsey’s show. My bills are astronomical and unending. Hence, my debt darkness. There will be no light or FIRE at the end of this tunnel for a very long time.

Good company in a journey makes the way seem shorter. — Izaak Walton

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We have close to $300,000 in consumer debt. We usually have a combined gross income of about $200,000 depending on a non-guaranteed end of year bonus. The income sounds decent. However, we have now reached a critical point where we can’t pay all of the bills, and we definitely can’t afford food, gas, or anything else. Right now I’ve started to address the mess by:

  1. getting organized
  2. stop using credit cards
  3. implementing Dave Ramsey’s Baby Steps and the debt snowball method
  4. limiting spending and
  5. strategically either delaying payments or making partial payments for certain bills.

I’ll lay out the numbers in a future post but right now I’m facing a dilemma. With the last $7000 of my bonus I’m trying to decide whether I’ll pay my car notes through this October or pay off three small bills (Wayfair Credit Card, Hospital bill, and Home Depot credit card). The combined payments for these 3 bills are about $300. My car payments are $725.

Obviously, I’m leaning towards paying the car payments, and I’ll stomp out those 3 bills with my income tax refund in a couple of months.

Please tell me what you think!

Thanks!

Debbie Debtor