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Scared to fall into the hole again


Frank4545
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First of all, I've posted here before in the past and have successfully rebuilt my credit and my scores are all around 750. I forgot my password and the email account I used is closed - so I have had to re-register.

I'm worried. Over the past year, I've run into a rough patch financially and my debt is climbing. It took me so damn long to rebuild that I don't want to fall into the pit again.

I guess the good news is that if it WASN'T for having such great credit, I'd be in deeper trouble. Here's is a bit of whats happened:

1. The heating system died in the house at the worst possible time - being 30 years old, it was nursed way beyond its design. A new one was installed. That cost close to $4000.

2. Our daughters financial aid was screwed up and she was nearly kicked out of college - we fronted the amount ($6000) to keep her in this semester - next year will be different, we will not have to pay anything since we are keeping careful tabs on it.

3. Both cars needed major repairs, one right after the other. Cost around 3000 for both.

Unfortunately, this was all put on the "emergency" credit card, which is now maxed out. We already had cut up several other cards and are paying them down religiously. We also have a loan we are paying down (from other old credit card debt we consolidated).

I'm just worried now. This was a huge hit and we didn't have any savings, we were so concentrated on paying everything down. I'm trying to find a light at the end of the tunnel, but I'm having a hard time focusing.

I guess I can see some good news:

1. Both cars are paid for and I own the titles.

2. Both of us are working full time and I generally make a lot more in the summer.

3. We are in no way in danger of losing the house. We are not upside down, quite the contrary, we do have at minimum 80k in equity.

Can anyone give me a pep talk?

Thanks

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Life does happen.. And that's a lot of life to happen all in one year!!!

Have you considered a home equity loan to try and consolidate all of your credit card debt? if you're in the 750's you should be able to get a great rate. Right now Bank of America has Home equity loans that are only a 1/2 point over prime!!!! That sounds like it would save you a hell of a lot in interest..

If that isn't an option I guess another way may be to try and talk to your "Emergency CC" company and see if you can set up a repayment plan at a reduced interest rate. They will usually do this for you but it will close out the account. This may make your score drop but it won't drop it nearly as much as late payments or charge off's.

Either way I wish you luck with this. Hopefully 2011 will be better to you than 2010 was.

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Thanks for the posts.

I had to sit back and take a few breaths to decide, plan, and act.

First of all, the emergency card is an interest free card for one year. This will give me time to pay it down as much as possible before any interest kicks in.

The bad news was offset by some good news: I found out we will get an extra 1k in refund this year - which normally would go to a vacation. We hadn't planned on one this year anyway, so some of that will go towards bringing down the balance.

Took a hard look at our insurances - turns out we're carrying far too much car insurance than we really need (collision on two clunkers is costing me close to $80/month) - so that's getting canceled.

I'm trying not to tie up the house in ANY kind of finances due to the strong possibility of moving next year.

Like willingtocope said, life happens. This scenario isn't likely to happen again. Short term this sucks. The long term - such as saving more electricity with the new system this year (possibly $400 in savings) - car insurance (almost 1k in savings) this year - pays off. Especially the college fund - as much as I hated having to put it out, I look at it as in investment in my kid - its not like I blew 6k at the casino and regret it. This gives HER a head start, something I never had growing up.

Thanks for the pat on the back.

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