Saturday, July 29, 2006

writing it down




so i did it. i went through my bills and wrote down the amounts owed. some things i didn't have the bill for, so i had to call and find out the balance. what's the damage?

$67,529.65

that is the amount i owe including my student loans. without my loans i owe
$6831.62, which isn't THAT high, but as i stated in the last post, most of that is owed to collection agencies.

so now what? i tried to do a preliminary sketch of how much i have to pay out per month and check that against my salary. every month i have to purchase/pay for...

SallieMae--$350
Discover Card--$335 (will be paid off in October)
Babysitting--$400
Baby Formula/Supplies--$150
Bally's Fitness--$36
Netflix--$16.23
Webhosting--$5.98
Gas--$120
O--$300
total: $1713.21

my monthly take home is around $2200/month, and once i switch jobs it will increase, although i'm not sure by how much.

so writing it down has taught me a few things (some i already know).

  1. i don't owe THAT much: i owe less than $7k, which is totally doable.
  2. I spend money on random things: I take home nearly $500 more than I need to spend, yet at the end of the pay period i'm always broke.
  3. I have some room to pay off my other debt, but i have to be smart about it: before i call up the collection agencies and play let's make a deal, i should have an idea of what i can pay and not get bullied into paying more than i can handle.
overall i'm happy i wrote it all down. i now know exactly (more or less) of what i'm up against. i told DH and he said he's proud of me. he's happy i'm tryingto get it all together. that made me smile. i do feel 20 times smarter (but also 20 time broker), but at least now i have the power to make some changes.


now....if anyone has advice as to how to deal w/ collections agencies that would be great.

10 comments:

Tired of being broke said...

That is a first step to getting a clearer picture of your financial situation. I did that for my credit cards, but I need to do it for all my debt.

Single Ma said...

Congrats on getting organized and laying it all out on the line.

Paying a collection agency is not always the best thing to do. I'd recommend that you go to creditboards.com and get advice from some of the pros over there. I've been a member for years and my credit has improved tremendously. I'm talking from low 500s to upper 700s. It's empowering when you're armed with the right information.

Calling a collection agency can get you into more trouble than it's worth. It is against the law for them to strong arm or intimidate you into paying. Some of them are bottom feeders, some are unscrupulous, and some are just plain scum. They are not honest people, so don't be quick to pay something just because they send you a bill.

There are laws to protect you as a consumer and you can use them to your advantage. All communication should be in writing, but please before doing anything, spend some time reading at creditboards.com.

If you have any questions or need clarification on something you read, start a new thread on the board and ask. The people over there are so helpful, they'll jump to your assistance if they see you're trying to learn but have firt expended time to find the answer for yourself. If that doesn't work, send me an email and I'll try to help you.

There is no quick fix, but it'll be worth it and save you lots of money in the long run. Please, just take the time to do it right.

Good luck!

Common Cents said...

Tired: yeah, it is helpful to get a clear picture. i was afraid i owed a lot more, it's good to know my other debt (besides student loans) isn't SO out of control.

Singla Ma: hanks for the advice. i will check out the site & email you if i have any questions. going from low 500s-700s is inspirational, especially to me because i'm at the 500 range. thanks again.

Lost Flier said...

OK, well see I jumped the gun on saying "try credit counseling". I ASSUMED as I should not have, that you had more credit card problems than you do.

Keep this in mind...there will be lots of opinions on what you should do to get things "fixed". Listen to them all and do what feels the best to you.

OK, I am armed with more information, let me see...
1) What is you "O" category? Is that other?

I agree with single ma that dealing with collection companies can be trouble. Go back to contacting the original company you owe-- they'll have record of it.

Also, it is smart to do everything in writing but to do that you have to start with calls. It's really harder than it sounds to do things in writing...in this day and age "in writing" can mean via email! But your last email should say, "send it to me on letterhead."

I'm going to watch your post on CreditBoards and see what they have to say.

What types of loans do you have charge offs on? Are any of them places with local offices that you could go talk to someone. They may be williing, if you work with them, to change the status of the debt from "CHARGE OFF" to "PAID AS AGREED" any deal you make with them certainly needs to be in writing.

The bottom line is that people appreciate communication...just don't communicate with the collection agencies.

There are several steps still left here. Don't get overwhelmed and quit.

Common Cents said...

Lost Filer,

thanks. none of my loans are charged off. my student loans are actually the only positive things on my reports. the charge-offs are old credit card debt & just random things i've never paid/didn't pay on time. which brings up the issue of "dead" debt. i have 2 cards that MUST be past the SOL, but i'm just not 100%, but i don't want to mess up and revive it. i received a letter a few months ago about one of them (i think) but it didn't list the old CC company, just the amount. i don't want to inquire and start the clock on that old debt. i know i haven't made a payment in the last 3 years...and i'm pretty sure i didn't make a payment on those 2 accounts in 2002 either...so should i just let it ride? or should i inquire? the total on those 2 accounts is less than 3k (i didn't add that to my total).

Lost Flier said...

My opinion...let them ride. Don't start the clock over! I mean you don't even know who the original creditor was?
How do you know they are even legitimate claims?

Bottom line advice: Focus on keeping current what is current and don't worry about those "old" things right now.

Common Cents said...

Thanks for the advice Lost Filer.

I do have some Collection Accounts that are within the SOL. I've posted over at Credit Boards and I think i will start the validation process. I will probably just pay off the small ones, but only if they remove the negative from my reports once it's paid off (do i make this deal with the CA or the OC?).

The 2 old cards...i'm not sure who the original creditor is anymore. it was "The Associates" but they were bought about by another major company, so I'm not sure. I think Citibank. I'm definitely not paying that $1109, i'm going to let that one ride.


I will definitely focus on keeping things (mainly student loans) current. They are the only "open" accounts I have now. so I need to make sure they are in good standing.

Thanks for the advice.

JLP said...

Knowing WHERE YOU ARE is the first step towards freedom! Most people stick their heads in the sand and avoid thinking about their situations. So, I applaude your taking the bull by the horns.

One step you might want to consider is tracking where your money goes each month. If your bills are less than your take home but you don't have money left over, you have a leak somewhere.

Anyway, you should feel good that you do at least have money left over after your obligations. That at least gives you something to work with.

Best of luck to you and your family. It takes courage to stare those debts in the face!

JLP

AllFinancialMatters

jasai said...

you ROCK for this!!

D said...

Sorry for the last post, I didn't keep reading to see your progress.

1. Pay-off baby pics
2. medical payments change to $5.00 per month.
3. Negotiate utilities like I explained in 1st post.
4. Call Discover and TELL them you are lowering your minimum payment to 1/2 of your current payment. This will extend your payments, but allow you to breathe.
5. Keep paying the rest as agreed.

You can start moving forward. Go to my website 2 Nickels Making a Dollar use my links and beginning making a little extra money every month. Apply that dough to the lowest medical bill until paid off (this is in addition to your minimum payment). Send this extra in a separate check or payment. This way it shows you are keeping to your payments and applying any extra dough you have, creates integrity.
You can do this yourself. Email me I would be happy to help you.