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And Now It’s Time for a Breakdown (Part 1)

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Name that tune.

Now that we’ve done the formal introductions, it’s time to get you acquainted with our debt situation.  We’ve been working on our mountain of debt for 3 years so far, and our goal is to make our last payment on my 35th birthday in July, 2017.

At this point in the journey, we’ve paid off all of our cars, some credit cards, and our undergraduate loans.  Still to go, we have 2 credit cards that are a testament to our ongoing financial lack of discipline, and my remaining graduate school loans.  Here are  the debts we’ve paid off so far.

Emily Credit Line $180
Orchard Bank Card $250
Short-term Loan $500
Prudential Insurance $1,000
Citi Private Student Loan $3,070
Ford Focus $9,365
Emily Dept. of Ed. $7,000
Emily Sallie Mae $6,350
Citi Credit Card $2,400
Lexus RX300 $5,000
Adam Sallie Mae $15,200
Total Paid – July 2013 $50,315

Emily’s credit line was a revolving loan she took on with her bank after college. Thankfully we knocked that out right away, along with the dreaded Orchard Bank card.

Short-term loan: During my first year of graduate school, my loans for the entire semester were disbursed at the beginning, and it was my job to budget my living expenses until the next disbursement in January.  As I approached Christmas my first year, I realized I wasn’t going to make it! This was one of the most stressful times of my entire life. I was worried I might not be able to go home for Christmas, get anyone any gifts, or anything else.  For the first time in my adult life, my bank account approached $0. I’m grateful that my school offered a $500 bridge loan that got me through the holidays, but it was on our snowball list when I graduated.  I definitely knew at that point that I didn’t want to be in that position ever again, to the extent that I could control it.

Prudential Insurance:  Chalk this up to the stupid tax.  My parents bought me a whole life policy when I was a baby. They paid the premiums and the policy was worth about $5000 when I was in high school. I wrecked my car during high school and had to get some repairs, and my mom suggested I borrow against this policy.  She paid the interest on the debt every year (about $30) until I was 26. I finally said I wanted to get that weight off my shoulders and paid that stupid debt back, cashed out the remaining policy amount and paid off some of our other debts. I’m glad to be rid of it.

Citi Private Loan: The hits keep coming. My junior year of college, I had the opportunity to study at Oxford University for 4 weeks during the summer. Of course my family couldn’t pay for this, so Uncle Citibank came to the rescue. It was a great study abroad program, but every month making that payment for several years so I could do a cool extracurricular was just maddening.  Thankfully we got that one eliminated.

Cars: These stories are worth a post of their own. We currently have a 2009 Ford Focus with 60k miles and a 2002 Lexus RX300 with 174k miles. We hope these cars last us until we are out of debt so we can buy our future cars in cash.

Credit card:  stupid stuff that I thought couldn’t wait, like school expenses, interview suits, a plane ticket for the holidays here and there, and suddenly we have a big credit card balance.  We’ll talk more about this as we go.

Student Loans:  Both Emily and I attended small private liberal arts schools.  She had more help from her family than I did, but we both ended up with about $15k in loans.  This May, 9 years after I graduated, I finally paid off that bachelor’s degree.

That’s the story on what we’ve paid so far! Next time we’ll get into the tsunami wall of remaining debt we have to tackle!


Where To Begin?

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I’m feeling slightly overwhelmed with where to begin now that the divorce is final.  I feel like I’ve been a racehorse in the starting gate just dying for the shot to fire and the gate to open so that I can return to my open, candid self.  I have so much I want to share and I need to be patient with myself and ask that you continue your patient reading as well.

The first thing I want to share is information about my vehicle.  Through a series of events I am currently driving a 2008 Toyota RAV with just 25,000 miles on it.  It is a long, drawn out story but the most important thing to share is that I am currently not paying a car payment.  This may be temporary until my higher interest debt is paid off, but for now I am trying to gracefully receive the help.  Right after the separation as I was about to take a hit on the minivan and get into something smaller with a smaller loan and smaller payment, my parents were kind enough to bridge a gap for me with a car they were not using.  I was successful in getting out from under the van relatively unscathed considering that we had just purchased it in November 2010.  I intially began the process to trade in my van but thanks to a series of events, I ended up selling it directly for what I owed before signing on the dotted line for the trade in.  It was a stroke of being at the right place at the right time (and it helped that it was a very nice, low mileage Honda Odyssey) and a number of individuals simply looking out for me and getting me the best deal possible.  In that sense, Steve’s poor handling of his departure paid off.  I did not ask for people to help in this way, but I do believe strongly in doing good deeds and that when you do, the blessings come back tenfold.  They came back in the form of my ending up without a car loan payment.  I could not have done this without my parents and it has been a humbling experience.  They did not want to take any money from me and I thought about insisting they take something.  After putting some thought into things and looking at my debt–I humbly accepted their generosity and vowed to tackle the debt even more aggressively.

It is humbling to share this with you and part of me just wants to continue hiding in the shadows on the car info but as someone wise told me, the readers will be persistent.  You do deserve to know if I am keeping this real.  I’m sure many of you will scoff at the fact that I am receiving this kind of help from my parents and I’ll just have to take the lumps.  It does REALLY suck but I am relieved to know that I have the help available and I will do everything in my power to both pay my parents back and pay it forward.

More to come this week but I am tired!  I had a very busy weekend with the kids!  One last thought to share:  My divorce was final on Friday but in light of the events in Connecticut, I couldn’t bring myself to “celebrate” via any social media.  I was reminded by that tragic event that  no matter what we are each going through in life, we don’t have to look far to see others facing much bigger challenges. Perspective. So I got duped by a man. I and my children are stronger for the experience and most importantly, I forgive myself.  Failure would have been to stay in an abusive relationship. There are far worse things than divorce. Remember there is always someone out there facing a much steeper climb than you.   Here’s to a great week!


The Bus is Feeling Shaky

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I don’t want to panic and say the wheels are about to fall off but the last couple of days have the bus feeling very shaky. 

It all boils down to poor communication between me and Steve.  I know many of you are going to be scratching your heads wondering how I missed the boat on this one.  I could write an ultimately funny book on the communication mishaps in this relationship but right now neither of us is laughing.  Bear with me because I am trying to give you a complete version but lose my wordiness.

As I’ve shared before, we have had a terrible time combining our finances.  There’s another book to write about how sick I am of the process that is combining money with this man!  I know this is tough for anyone but I swear this man I love got an extra helping of “stubborn” on this front ! Wow!  Yes, we have dramatically improved over the near 3 year marriage but this post makes me feel like we’ve gotten nowhere.

There’s a dispute about when I was made aware of the mortgage having late fees that were accruing each month because we were not making the payment on the 1st or within the grace period.  I say it was a few months ago (and I contend that I still did not fully understand that there were charges adding up each and every month).  Steve says I have known since the beginning of 2012 that we were not making the mortgage payment timely and, therefore, late fees accrued.

Now the history that you need to know is Steve was fiercely protective of that mortgage info in the early days, months and year.  Yes I know we should have had full and complete disclosure before we married, but we didn’t. You can still comment telling me that of course we should have known if you wish, but that ship has sailed.  (Tangent: I note a boat them here so maybe I should re-title this post!)  It was not until January 2012 when we started to get serious that I even knew how to get account access to the mortgage.  Keep in mind my name is not on the mortgage but obviously we now treat it as our debt.  I did continue to leave that bill to Steve and I am not sure why that is, but I am pretty sure it was out of a desire to avoid conflict.  Dumb.  Really dumb.  I am on top of every other bill and certainly look at statements and can see if fees are being charged and absolutely know the due dates of all bills.  We have the due date of all bills on our spreadsheet and yes, the mortgage says the 1st.  I don’t know for certain but maybe I went into denial and thought we were a few days ahead instead of near 30 days behind?  Maybe I was completley leaving that to Steve because it was his to begin with and I just didn’t want to “go there?”  I don’t know.  I just know that Steve was trying to move the mortgage up each month but because we didn’t prioritize well,  we owed $750 in late fees and more fees were being added each month.  The situation escalated because Steve felt like I should obviously know about the late fees and I felt like I was deferring to him because of the history and he failed to communicate the situation.  

Sometime in the spring of 2012, the mortgage was purchased by another lender and all account access changed.  Steve receives the statements via email so there is no hard copy coming in the mail.  Of course, hindsight is 20/20 but I should have been asking more questions.  By the same token, Steve doesn’t make it easy to ask question and should not have been sticking his head in the sand and avoiding the topic.  He assumed I understood that since we were not paying it on the first we were paying late fees.  Call me naive, but every mortgage I’ve had has a 30 day grace period with no late fees charged. Back then I wasn’t running late but I do know I wasn’t getting dinged for late fees at the 7 day overdue mark. We could have made a plan to pay that $750.  Instead it became a very ugly fight that ended with my unilaterally taking the $750 from savings and paying the full August payment online.  Yes, I can admit the decision to take the $750 from savings was driven purely by my emotion and to make a point.  I’m still not convinced that was the wrong thing to do because I don’t want to give the stupid mortgage lender any more money in fees that we already have!  I can admit I should not have acted so quickly.

I went silent with him for 2 days which for anyone who knows me (and reads me), that’s hard to believe.  I did a lot of thinking over those couple of days and I’d like to tell you I’m over it, but I’m not.   I do see where we both messed up but I’m stuck on the fact that we FINALLY get the savings up to $1600 and have to hit it for $750.   I hope a good night’s sleep turns me back into a pleasant person because right now I’m a bear! 

Tomorrow is a new day…RRRRRROAR!!!!!!!!!!!!!


We <3 our Credit Union!

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I made time today to call Discover in an effort to get that awful 18.24% interest lowered.  There’s about a $7,000 balance on this stupid card but with a good pay history and a long relationship…I thought I might be able to get some interest knocked off.  After making it past their first layer of defense I was sent to a “specialist.” I explained to her that we have implemented an aggressive financial plan as of 1/1/12 and lowering this interest rate will dramatically help in the debt reduction plan.  She reviewed my account, praised me for my on time payments, advised that this card is best used for regular monthly expenses that are paid during the grace period so the cash back benefit can be best utilized.  After the reminder of what I SHOULD have done was over, I let her know that my credit union had made a good offer on a balance transfer option–at 10% I threw out there–but I wanted to end things well with Discover so our future relationship could be protected (or something like that) and she politely said “no.”  I was bluffing because honestly I didn’t think the credit union would extend any credit to us! Allrighty then.  I reworded my request a couple of different ways but nada!  This created an internal reaction for me that I can’t really describe—I wasn’t offended but I guess both frustrated and irritated!  I likely would have been happy with 5% off taking it to 13.24% but to offer nothing simply motivated me!

The next thing you know I am on our credit union’s website completing a “signature loan” application!  I double checked with the hubs of course. I’ve banked with this credit union since 1985 and my Dad since long before that year–the 1950’s I believe.  My husband and I opened our joint account there even before we married as we saved money for our wedding trip with the kids.  He had banked with traditional banks in the past and liked what he saw with the credit union. We have a very good history with them and they have always been very good to us—this doesn’t mean they’ve always given me the credit I’ve asked for (thank goodness!) but always very fair.  We asked for $11,000 to pay off 4 credit cards.  Within 2 hours we received the email letting us know we were approved!!!  While not the 10% I envisioned, we did get 11.4%!!!  It is a 48 month pay off but that makes the minimum payment $280 and we already pay $340 on those cards each month.  Taking that $340 (and yes, we plan to pay more than that) this credit union signature loan would be paid off in 40 months.  If we pay $500 per month (completely doable barring any unforeseen issues), we are looking at 25 months to payoff.  We did some quick calculations–taking just the minimums on these 4 cards…if we had never started paying attention and just kept paying the minimums, we would have paid $26,230.46 in interest!!!!! Barf.  If we go with the $340 “minimum” that would be $2,356.13 and if we do the $500 per month…that amount goes down to $1,485.15!  That’s an approximate $25,000 savings!!!!  And as I type this my husband is saying that we will do $800.00 a month and that means 15 months and only $893.14 in interest.  UNBELIEVABLE!

We’ll finalize this loan this coming week.  I am feeling very, very thankful for the options I DO have.  Please know none of this is lost on me.  I am so grateful that we have options—and so, so grateful that my path led me to this blog and that I was selected to share my story.  🙂  Thank you to everyone who has nudged me via comments.  While I may not be able to respond to all, I read every single one and truly take the advice to heart.  Is there an emoticon for “beaming!”  ??? Thank you!


Details…details….

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Okay–below are the nitty gritty dirty details!  Please please keep in mind that the minimum payments here exceed what I have paid down amount noted on the right hand column…because I still have 11 days in the month to pay those bills that are not due until the last part of the month.  I have paid extra on cards this month–even if only 5 dollars extra!  I paid off a small bill and am ready to move on to the next.  In short, the total amount paid you see on the right (currently $1,458.45) is not comprised solely of minimum payments.  Does that make sense?  Remember that we get paid weekly so a little bit each week is going to overall debt reduction.

Take a look and tell me what you think.  Now…when I say “tell me what you think” might I suggest that we all practice that tried and true “if you don’t have anything nice to say, don’t say anything at all.”  In other words, just throw me a flippin’ bone and tell me ONE good thing I am doing…I am human after all and even if just ONE thing before a list of 20 I am doing wrong…I promise I can hear the 20 bad things better if I just have that ONE!  Sorry if that sounds sensitive but this continues to be a HUGE deal to put my neck out every single day…and then someone comes along with a HATCHET and…well…you get the rest of that terrible picture.

Side note:  big boss in from Houston tomorrow and Thursday.  If we don’t hear the announcement this week…just anticipate my next post to be from an undisclosed location where they had to send me to manage “things.”  Ha!

  • Credit Union Line of Credit: $163.67    
    Minimum payment: $20.00 
    Interest Rate:  12.25%
  • Credit Union Line of Credit: $163.64
    Minimum payment: $20.00 
    Interest Rate: 12.25%
  • Credit Card: $217.00
    Minimum payment: $15.00
    Interest Rate: 9.9%
  • Personal Loan: $550.00
    Minimum Payment: $100 
    Interest Rate: 0% (LONG story on this one…to  my Dad…)
  • Credit Card: $760.54
    Minimum payment: $25.00
    Interest Rate: 23.99%

  • Credit Card: $1042.72
    Minimum payment: $29.00
    Interest Rate: 18.65%
  • Credit Union Credit Card: $1,834.16
    Minimum payment: $50.00
    Interest Rate: 15.70% (closed at my request)
  • Credit Card: $2062.73
    Minimum payment: $105.00
    Interest Rate: 24.9%
  • Credit Union Credit Card: $2,460.13
    Minimum payment: $50.00
    Interest Rate:  11.70% (closed by Credit Union b/c of divorce)
  • Credit Card $7071.02
    Minimum Payment: $140.00 
    Interest Rate: 18.24%
  • Credit Card: $14661.00
    Minimum Payment: $268.00
    Interest Rate: 11.9% (totally the divorce on this card)
  • Honda Civic: $16340.05
    Minimum Payment: $280.00
    Interest Rate: 2.9%
  • Credit Card: $23868.07
    Minimum payment: $560.00
    Interest Rate: 12.9% (closed at my request)
  • Honda Mini Van  $25447.49
    Minimum Payment: $436.00
    Interest Rate:  2.9%


Making Home Affordable Tips…

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I learned a lot about the Making Home Affordable/Home Affordable Modification Program (HAMP) in my 2 hour call with Bank of America.

1 – If you are hoping for a huge change… this is not the answer. Not all changes are permanent and/or large. Some adjustments may last as little as 3 months.

2 – Loan modifications are not quick. If you can’t wait the standard 9 weeks for the review of your file and another 5-9 weeks for paperwork processing, you don’t have enough time and you may want to move forward with other options like a short sale or foreclosure.

3 – Give an accurate listing of all your expenses. Don’t exaggerate but don’t minimize either. Have a good understanding of exactly how much you are paying. Keep this information available for when you call the bank.

4 – You will be rejected if you have recently made large purchases or if your credit score is low. You shouldn’t be making large purchases anyway so I can’t say as if I blame the banks for this stipulation.

5 – If you have a second mortgage with another lender, they will likely require you to get approved for the Making Home Affordable Program on your first loan before they will consider a change to your second mortgage. If you are accepted for the program on your first loan, it’s easy to submit the same paperwork for your second mortgage.

6 – This should not be your only option. It’s worth a try, but don’t fool yourself into thinking this will solve your problems.

7 – If your home is not a Fannie Mae/Freddie Mac mortgage, this program does not apply to you… BUT some lenders are still willing to modify other types of loans.

8 – This is a voluntary program. No one HAS to help you. Sure it’s good business sense to lessen foreclosures on the banks part, but if you are a problem child, don’t expect any help. Banks don’t want to keep you as a customer anyway. Be kind, courteous, and polite even if you are frustrated.

According to the bank’s calculations, my husband and I qualify. We are now in the first 9 week waiting period while they review our files. We have stellar credit scores and we haven’t made large purchases in a long time. We are good candidates for an interest rate reduction from the over 7% it is currently, down to the market rates of 5-6%.

Do I really think it will really happen?

No. But it’s worth a try.