May 20, 2010

Debt Counseling

Yesterday, I called a Debt Counselor.

I thought it was time.  Troubletron and I have done everything we can think of to cut costs.  We live in a house with no cable or even basic channel access, like it's the 1800's.  We shop with coupons.  I've even started only washing my hair every OTHER day, to save money on shampoo--cheap, grocery store brand shampoo.


But, with only one income, and all my law school debt, plus regular bills, we just aren't making it.

We will be moving in with family members soon, but that's still not going to be enough to set us right.  So, I sucked up my pride and called one of those non-profit credit/debt counseling services, hoping they'd have some magical (or at least, insightful) solutions for me.  After an hour of telling the counselor all our sources of income, and all our required bills, here is what she said (in purple) (my thoughts in italics in green):

"Well, it really sounds like you are in a predicament.  It's important to remember that the economy is bad right now, so you're not alone.  Lots of people don't know this, but there are really only two ways to fix this kind of situation: cut expenditures or raise your income, or both. (um, what people don't know that?)  Here's our advice.

First we suggest you cut costs by starting to use coupons.  (check)  The best place to start doing this is by going to already hoard coupons like they are crack, so move on) You'll really be surprised how much money you can save with just a few coupons.  (Right, 45 cents.  Ok, I got it.)

Second, we suggest you cut costs by looking at your budget and cutting out all inessential activities. (wait, this one is SECOND? So, for you, that could mean thinking of free activities to do (is that what it means for me?  Or, is that what it means for everyone?)You said you spend extra on groceries when your kids are with you.  Maybe you could try to cut back here. (don't feed kids.  Got it.)

 Third, you may want to move somewhere less expensive (Is she not listening?).

Fourth, you may want to consider getting a job.  (Ok, I'm going to punch you.  What do you think I do all day?That's really going to be the best way to increase your income.  Are you registered with any employment agencies? (SixThat might be a good place to start.  (Right.  I  STARTED there.  A year ago.  With six.)

 Next, you should consider bankruptcy.  (WHAT?It won't discharge your student loans, but it will really help you get a fresh start.  (um, how can I get a "fresh start" when my credit is ruined from a bankruptcy and I still have huge law school loans to pay off?  That's not a fresh start!) (ALSO, you aren't a lawyer.  You can't give this kind of legal advice).  I know you're a lawyer, but you should consult a lawyer.  (It's like you can't hear yourself talking).  Bankruptcy is really a good option for a lot of people.

She went on and on with more "options," half of which are common sense fixes we have already done, and the other half were ludicrous.  How is BANKRUPTCY the option you present to a woman who has NEVER MISSED EVEN A SINGLE PAYMENT on any bill in her entire life?

This is what passes for sound financial advice?  She just reads the same script to every caller!  Why did we go through the charade of examining my actual finances!?  Those were cell phone minutes I'll never get back.

I'm thinking of writing a strongly worded letter.  Or email.  Email would be cheaper.

I'd love to hear your money-saving tips.  Unless you are stupid like my debt counselor.

For those of you invited, there are new blog entries on our private blog!

9 Robot Reactions:

Side of Jeffrey said...

This is not a money saving tip, its a money earning tip. I heard that that underwear cowboy guy in NYC makes like $125,000 a year playing his guitar in Times Square. Is there an underwear guy in Washington DC? If not, Leo is a prime candidate for banking in some money.

I'm serious though. My old roommate plays the violin. One day she went and played her violin for like 2 hours on a Saturday in Little Italy and cashed in $75. 2 HOURS!

Do any of you have any special talents you can do in a subway or busy street? If so...its money! Ashley, maybe you can play Dr. mario for people in the subway to marvel at you powers.

capitolhill20210 said...

From personal experiance the debt counslers/debt consolidation aren't worth a crap. I used one and I was not impressed. You know you can put a forberrance or defer your student loans, I had to do that for a bit.

Good Luck.

JakieWakie said...

I've always wondered what debt magic those debt counselors have at their disposal. Now it makes you wonder when you hear their adds on TV or the radio and they use one of their customer's success stories. If Gina managed to go from $25,000 in debt 12 months ago to debt-free now, what kind of financial retard was Gina before you people told her to use coupons and stop paying for HBO?

Cathy said...

we went through the same thing, the Debt counselors only care if you have Major credit card bills and INCOME so they can negotiate with the credit card company to lower your payments. Which you can do yourself and avoid paying the credit counselor.
We live like it is the depression. Wash out ziploc bags so they can be reused. Keep the kids clothes that they have grown out of to make patches/add length to current clothing. I only purchase food if it is an ingredient in a recipe - NOTHING extra. This has cut my grocery bill in half. If you need a snack you eat the leftovers or sometimes there is a tomato or carrot left over that didn't make it in the meal.
I am emailing you another option - it is a but personal for my so I don't want to share here.

Sparklebot said...

Side of Jeff: If only I had some kind of performing skills. I'll talk to Troubletron about the underwear idea, though. You may have something there.

CapitolHill: My student loans are definitely in forbearance. So, no worries. It's regular bills I can't pay with my zero income.

JakieWakie: Those ones on the radio are usually scams. Don't every use those. Those will RUIN your credit quick-fast.

Cathy: You are completely right. She told me to feel free to call back if I got a job, and then they could do more for me. I said, "If I get a job, I won't need to call back because I will just pay my bills on my own . . ." It's very ridiculous.

Lisa said...

You could start growing corn and raising chickens on your balcony (I'm surprised the credit counselor didn't suggest that, so obvious.)

Then stop showering and using soap of any kind, and stop eating. Just drink free water from water fountains and live on air. Easy.

Third, get a job as a credit counselor and share your ideas.

Shackles2Garlands said...

@ Lisa, lol!! :- )

Moving in with family will help a lot.

Bankruptcy is best suited if you have outstanding credit card debt. I declared Chapter 7 five years ago, and although I felt guilty about it in the beginning, it has allowed me to live my life again. My credit is back to the "good" standing and I am pre-approved for a house loan (only $120K, which is perfect, because anything higher I would refuse to consider). However, I declared only on credit cards.

I'm not a financial advisor, and I don't know where, or if, you are behind in anything. It sounds like your loans are in deferment, which is great (if not, ask about it, but it sounds like you have your student loans handled). If you are behind on credit cards, send me a private email. Even if you are $2000 over a $3000 limit, things can be worked out for you to pay the minimum. You don't need a third party, you just have to stand your ground. I'd be happy to walk you through a few pointers if you'd like.

Cutting back though, does mean going cheap. Very cheap. No cable, not even basic. The library and the Internet become your best friends for entertainment. You might be eligible for government assistance too, especially for things like food stamps (which is just any other debit card these days). For craft goods, take advantage of services like Freecycle. People are always giving away extra cloth, yarn, etc.

It is TOUGH. Obviously, when it comes to food, the kids get the better food. My mom ate peanut butter and jelly sandwiches through her first year of marriage because there wasn't enough money for both her, my dad, and my brother to eat well. What you are going through now really re-evaluates your wants vs needs.

I think you are really doing good though by moving in with a family member. So many people won't due to pride, but I think it's great. They love both of you and are a great support system :- )

Jana said...

These are definitely some sucky times. We're right there with you on the couponing and cutting everything out of our budget known to man. Can't stop laughing at Jeff's comment.

Anonymous said...

my BEST money saving tip:
read dave ramsey's book "The Total Money Makeover." it has helped my family become the minority in america that has NO debt, a savings nest egg, college/mission savings for the kids, and we're ahead several years on our mortgage and NOT because my husband makes a ton of money, but b/c we follow his "baby steps" and have rearranged our priorities. we, like you, live a very simple life without any tv, shopping sale with coupons, and other things like making our own laundry detergent, using a dryer rack, shopping for clothes off season, etc. pick up the book and read it. the worst that could happen is that you don't agree and you wasted maybe 3 hours of reading it. hope this helps.