IRS Rebate Received & Waiting for Other

I checked our bank account this morning and it has been received ($1330). It is going straight to Capital One next week for our settlement payment with them. Can't wait to say on the 21st that they're no longer in my wallet taking my money.

The one thing that may put a hamper on settling is I am waiting on getting paid for the programming work I had done on the weekend. I spoke to the guy a week ago and the check was on his desk waiting to get mailed (his wife had just had a baby, so he wasn't in the office for 2 days). I haven't heard from him since and been checking my mail daily, e-mailed him on Thursday night and no response yet. That check is for $2100.

For now it's nice to see our bank account at almost $3K. Too bad it'll be back down to $0 in a couple of days.

My Ethical Viewpoint

A reader recently questioned indirectly my ethics, especially due to me making choices recently to tackle other items ahead of debt payments. Here's the points in no particular order:

- Tree removal versus Debt

Yes, for most situations removing trees in your property are luxuries. Here's our reasons besides the "nice to have done" point:

1. Safety: We had 2 trees that were within 15 feet of our house (and our neighbor's house). Like clockwork every July we have had huge limbs come off the trees (20+ feet). They had missed the houses in the past, but the only ones really left were aimed for the houses. I don't need a 5-10K repair bill because I wanted to stay focus on our debt obligations.

2. Timing: The better times to cut down trees is when there are no leaves on them. It speeds up the process, less brush, etc. That prevents us from paying more money.

3. Time of year discount: During the summer months, tree cutters are a lot more busy because that's when everyone thinks of their outside projects. By doing it now instead of right before the storm, it prevented us from paying more money later.

- Replacement car versus Debt

Yes, we are a 2 car family even though I'm the only one that goes to a job during the week. Here's the main reason we decided to replace my car instead of paying more to debt: My wife's emotional well-being. I know my wife, we have fought a couple rounds of depression together. I know that when she does not have a car at the house, she fights loneliness, feeling trapped, unable to get together with others. Say what you will, but my wife comes before any debt.

- Fun money versus Debt

Theoretically, our fun money should be at $0 since we made prior obligations to our creditors. It's a great idea, but in real life it doesn't work too well.

1. We need to keep running the race. I tried the $0 fun money, it was not worth it. I'd much rather work an extra hour or two than be in that situation.

2. Our "free" entertainment items break down sometimes. My wife has her sewing machine that has brought her many days of entertainment, I have my computer. In the past couple of months we have had a power supply need to be replaced on my computer and some parts replaced on her sewing machine. The money came from our fun money.

- Debt settlement

I view it ethically ok to make settlement offers. Here's when:

1. When the alternative is bankruptcy. Almost 2 years ago I lost my full-time job and started working at Taco Bell. They don't pay much, but we had a whole lot of debt. Everyone was saying I should file for bankruptcy since I was unable to pay. I'd much rather give them something than nothing.

2. The debt has become "old". During that rough period of time when we couldn't pay, most of our creditors ended up selling our debt to collectors. The collectors paid pennies on the dollar in the hopes of collecting something more in the future.

3. They are offering settlements or are willing to listen to one.

4. Bringing the account "current" would be equal to the settlement amount. Because of the many months we could not pay anything, the amount to become current kept growing. At this point in time, if I asked them how much to be current, they would pretty much say as much as the settlement amount.

5. You don't have the money in the bank to pay them everything they want.

- Not making monthly payments on all debts

1. To be current is impossible: We went through a time where we could barely pay the mortgage, let alone any debts. Because we couldn't make payments back then, the amount to bring these accounts current is astronomical.

2. What we could give them would not be enough: This goes back to #1 regarding being current. I've only had 1 creditor be reasonable regarding paying them something monthly until we could do more, which we have done fairly consistently the whole time I've had this blog (except for 1 month, which was really tight).

PS: I've been mulling this post over for over a week, there's probably more I could have put in, but I'm wanting to get this up.

Another Card Settlement - Home Depot

Things have been busy for me working a lot between my 3 jobs and taking care of house-related items while my wife has been out of town. Our last scheduled monthly payment for our Home Depot debt was coming up soon, so I called them up and negotiated a settlement stretched over 3 months (yeah, I know it's best to do it in 1 lump sum, but I've been dragging them as long as I can to get the lump sum together).

Details:

We had 35% taken off the existing balance with payments of $1180/month for 3 months starting next month. We will have the money for the entire payoff by the end of next month, but with the games they've been playing, I'm wanting to hold onto the cash a bit longer. It will also give us ammo in case any of the other 2 CC try to bring us to court.

Our largest one, Capital One, I'll be sending them a letter this weekend with a $100 payment to keep them satisfied for the month and do that every month until April/May when we can settle with them all at once. The past year we've been doing that and it has been working well. Our smallest one, Menards, I won't be waking up until the Capital One is out of our lives.

I can taste freedom just around the corner. It's a great feeling to have $600 around the house and not having to rush it to a bank to cover a check just written or a bill needing to be paid.

Working my way out of this mess

Well, my wife is now out of town for two weeks visiting her parents, leaving me at home with the roommates. The programming job I have a fair amount of work left for them (15-20 hours), paying me $20/hour. I'm meeting with them today to go over what I've done for them so far, put the new version on and review the work they want done to make sure I implement it right.

I'm also taking up a few extra hours at my day job laying ethernet cables at our new office. I figure it will be a learning experience with a crimper and bring in a few extra dollars.

This will help with us needing to take my wife's car into the shop as well. Mine came back after $500 (had another minor annoyance of a rusted exhaust pipe sealed for $50 more). Hers was starting to have a new problem, I suspect one of the belts may be wearing down since we were smelling rubber. We'll have that and the hub assembly replaced.

Working towards a goal of $3100 by 2/20 to settle with Home Depot...Currently at $500 with the majority of the rest of the months income going towards it.

Settling on Discover Card

I got a very pretty blue envelope yesterday in the mail and it contained the following offer: "Our client will accept $2133.22 to settle this obligation."

The total balance due is currently at $5333.04, so I talked it with my wife and we're going to hold off on the Menards balance and tackle this one instead. I paid half of it last night and they will do the remaining balance on 12/3. I was thinking that it was going to take $4,000 to settle this one. This bumps up my aggressive settlement goals as follows:

• Discover on 12/3
• Home Depot on 2/5/08
• Menards on 3/20/08
• Capital One on 5/20/08
• Other Misc Debts by 8/31/08
  

We'll be free of all this by our birthdays in September!

Old Cingular Creditor Paid

Yesterday I took care of an old Cingular creditor we had from almost 2 years ago, settled for 35%. It was a pretty easy process, told them that I had received an offer letter a couple months ago and was wanting to know if the offer was still available. It was, I offered to pay in full, they tried to charge me a processing fee for my debit card, had that waived and I was pretty much done.

Our NetWorthIQ listing is pretty accurate for where we'll land at the end of the month, the only uncertain is exactly where the cash will be landing. If our roommate keeps paying us back like they are the next 2 weeks, we'll hit the $1K. If the other cell-phone folks pay us back, we'll be even higher.

Chase Creditor Chasing Us

I knew the creditors would start coming after us harder, but the one that bit this time I wasn't expecting. We had a Chase credit card and due to bad financial situations, we have not paid it. The debt for it has been sold a few times now and the newest owner decided to send it to court. It was a surprise because this is our smallest credit card balance, I was hoping to tackle them in November, but they've changed the timetable.

I called the local attorney's office that is handling the case, they offered either $200/month until it gets paid (with interest) or paying it all off. I spoke to my wife this morning and looked at our budget last night, we're just going to tackle the $2208.25 balance by 10/2 instead (court is on 10/3). There will need to be some tightening going on, including:

• We are going to have to push heavily on getting her student loans deferred for a bit longer.
• We have a credit with our natural gas company and they read the meter wrong the last time they came out, so I'm going to call them and see if we can hold off this month paying them. Our credit is about $350 and due to misreading should be around $500.
  
• Our house phone we have been paying right when the bill comes in, we'll delay paying it until it's due this time (next due date 11/10).
• Check when we get back the $200 deposit we did with our electricity utility back in the spring (we were behind for a while, so they required more from us as a deposit).
• Delay additional insulation until mid-October (we've been having warm weather that has been helping).
• Keep in touch with the possible roommate from last week. Last we heard it was pretty certain he had a job in the area (doing drug test for it), so now it's a matter of him starting it and them moving in.
• Mortgage will get paid on 10/12 after 1 roommate pays their monthly $350 and consulting job pays on that date.
  

Final Settlement on BofA Balance

Here's the final result on the BofA balance settlement. I received in writing the offer for $3909 to settle the balance and received a call from my buddy Mark over at the collection company. I explained to him the issue that I get paid on the 1st and 16th, making it hard to have the money by the 28th (tomorrow). They asked me how much I could have by the 30th (Saturday), explained again about my check not coming until the 1st (Sunday) and that I would just have $3400 available on the 2nd. (a little fib, I'll have around $3440 at the low end of my estimates, $3700 at the high end of my estimates).

In the end we made the deal of $3400 as full and final payment on our balance of $9772 to be charged on 6/30 (which may or may not bounce, my employer has been known to pre-deposit on Saturdays). If it bounces, the worst case is we get charged another $35 (A line they told me). I had this debt listed originally as $8561 on my debt list.

What I need to do in the coming days to make this happen:

1. Current bank account has $1100
   
2. See if one of our renters that pays on the 1st can get us the check on Thursday (enough time for it to clear). It shouldn't be a problem for him. ($400)
   
3. Deposit 1 check that has both our names on it into the bank account. ($30)
   
4. Move $750 we have in one account at one bank to our checking account at another bank.
5. See if we can extend the paying of our cell-phone bill by a couple of days until Monday.
6. Have my paycheck of $1349 direct deposit (already setup).
7. Deposit $100 rent payment made on Friday night into the account Saturday morning.

If you did the math, you'll see we will have $3729, but have our $150 cell phone bill to take care of too. I explained to my wife that the coming month is going to be tight, but we won't be rolling coins. We're just going to have to be walking on pins & needles this coming month, checking the balance in the bank account daily and not spending anything beyond the mortgage, utilities, and gas for the car. Everything though will be current by the end of the month.