Debt Problems - How can I get out of debt? My wife and I both have jobs but we are not getting any closer to being debt free.?

How can I get out of debt? My wife and I both have jobs but we are not getting any closer to being debt free.?

We do not have credit cards (we both got rid of them years ago, and we would not qualify for new ones if we wanted them anyway). We have a baby on the way and want to be on our way out of debt (we have realistic expectations and do not expect this will be happening tomorrow or even relatively soon). Is bankruptcy a good option to look at?

Public Comments

Maybe by supplementing your income. Jennifer
Before you consider bankrupcy talk to a consumer credit counseling service (nonprofit). They should be able to help you budget and get out of debt. Since your income is fixed (you have regular jobs) consider what your expenses are. Is there anything you can eliminate, is there anything you can do without. Consider your assets is there anything you can sell to pay down your debt? With a new baby on the way you should reexamine your entire budget anyway.
How much debt are you talking about here? That's the first question.. Well there's two ways to get out of debt... Increase your income and or spend less. Generally you'll need a combination of the two, not sure what line of work you do now. here's the general rule of thumb, cut all expenses to a bare minium, find out how much money you have left over after all essential expenses are paid, then work out a deal with your creditors for a payment plan. Finally seek additioanl employment to increase your income and help better offset your debts. Bankruptcy , really should be a last avenue, as it will ruin your credit and really make a mess of things...
Every interract with someone who has declared bankruptcy, they say the same thing: don't do it if you can possibly avoid it. It will follow you for the next 10 years and you will wish you had never even heard the word. The only way to get out of debt is to increase your income or decrease your spending or both. Cut out every possible "extra" from your life. If you have cable/satellite TV, get rid of it. If you have an extra car you are paying insurance on but not using much, sell it. If you have club memberships you don't need (fitness, golf, etc.) get rid of them. Find ways to earn money on the side working weekends and/or evenings. With a baby on the way, this might be difficult but you can't start any sooner than now. List your all your income and all your expenses for a month on a sheet of paper or spreadsheet. If you income is greater than your expenses, start paying extra on your debts. If not, find a way to make them at least match. List your debts in order from highest interest rate to lowest. Pay extra on the highest interest rate debt until it is paid off. Then add that payment to the next one. Keep working on it until it is gone.
Really sit down and figure out where all your money is going to. I'm always surprised by how much our money goes to fast food. We literally can cut our food budget by 75% in the months where we decide to only go to the grocery store, and forgo the stops at a drive-thru, coffees, and pizza. I've talked to friends about it and they say the same thing. I was in a bad position several years ago. We seriously got ontop of it by sacrificing and making big payments to all our creditors month after month. After about 9 months, we were starting to see the light at the end of the tunnel. I had really thought it was hopeless, but my husband kept at it. We were actually able to pay a lot more than I realized. I had been holding on to my money so tightly, afraid that I wouldn't have enough at the end of the month, that it was keeping me from paying off debts. My husband also took on some side work at some point. It wasn't a ton of money, but it was amazing the difference $200 a month could make. We just had to be disciplined. What debts do you have? Can you sit down and project paying them off over maybe 3 years? I can't give any advice on bankruptcy, but if it's truly dire you might consider it. Think of it like divorce though, it's a big decision. If you don't already own a home, and want to in the next 7 years, you might not want to. Plus, somebody else might be able to verify this, but I was told that bankruptcy does not excuse student loans. If you have hefty student loans, bankruptcy might not be the cureall. There are 3 different types, CHapter 7, 11 and something else. One of them is like "the big one" and other is like "reorganization". Some places will work with you on paying your debts, it's worth calling and asking if you can cut your payments. I have also heard that you can send smaller payments to a creditor, and if they accept them it sets a precedent and they can't send you to collections or court (don't know how true that is, but I have seen that said more than once). With a baby on the way, I hate to say it but it will be harder after the baby comes. Diapers and formula are expensive and necessary. If you can buckle down now and work a 2nd job, it might make a huge difference. I wish you a lot of luck! PS - love your hat. :)
Bankruptcy is never a good option. I suggest you and your wife read "The Total Money Makeover" by Dave Ramsey. Then start implementing his plan and you will be able to get out of debt. Right now before the baby is here, work like crazy and get the debt down and an emergency fund in case there are problems with the labor, delivery or home care after birth. His book has budgeting forms for people on predictable income and fluctuating income (sales or commission based pay). His easy principles have helped us pay a ton of bills off. We still have the stupid student loan and an old unsecured loan but we now have money for things like brakes when my van needed brakes. We didn't even blink, we just wrote the check for the brakes and didn't stress out. Read his book- it will help!
This has helped us stay out of debt. If you'd like to see site descriptions, proof that they pay, and a lot more information, please see my profile. I have been averaging over $2,000 a month on line for the last 4 months. All of these sites are free to join. I would also recommend never paying an upfront fee. If a site/company was really making that much money, they would not need to charge you. Hope this helps, and have a great day.