Yes, that's right! After a year of trying to pay off our credit cards, it's finally happened, we are now credit card debt free! I know I've been neglecting this blog, but believe me, a LOT has been going on. First I'll explain how we were able to finally get it all paid off.
Well, we found a house for rent in a gorgeous area of Solebury Township of Pennsylvania. It's an old house, but that's how I like 'em! We'll finally have a back yard for the kids and it's right across the street from the school my son will be going to!
In order for us to afford to move to this house, we needed some money. We didn't have enough saved but we needed to move out of our apartment. Rosemary needs her own room and we were tired of the area we were living in. Plus, this house is actually cheaper than our apartment! So, we decided to take some money out of my husband's savings fund at work.
At first we tried to come up with other ways to get money to move, but there were no other alternatives. We realized that this could actually be a new start for us, so we took out enough to pay off the credit cards in addition to the amount we needed to move. We got some good settlement offers from the credit card companies and we are now officially credit card debt free!
We still owe some money for medical bills, but those should be paid off in a few months. In other good news, we only have a few months left on our car loan! Once that is paid off, we'll have over $400 a month left over!
I know you're probably thinking it wasn't smart to take money out of my husband's savings fund, but we agreed that once we are settled in the new house and get an idea of what our bills will be like there, we are going to increase the amount being taken out of his pay check that goes towards his retirement. We also justified taken the money out, because those credit cards were a lot of baggage from his first marriage and we really needed a fresh start.
But this doesn't mean that I won't continue with this blog. We are now more determined than ever to pay off the rest of our debt, save money and ultimately move a lot closer to my family. It feels wonderful to be free of those credit cards and we really did work hard to pay off most of them. There were only 2 left that we paid off with the money we took out, yet there was a total of 7 all together.
Next weekend is when we're moving to our new house, but I promise I'll update the rest of my blog, with our new totals for the medical bills debt and post more regularly. :)
Friday, August 15, 2008
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8 comments:
Just as a warning to you--I went thru a divorce and we had no credit card debt at the time I separated from my ex. AFter the divorce he racked up nearly 10,000 on the one card we had--which initially had a 3000 limit---I found out nearly 3 years later! When the credit card companies came after me--I was clueless about any of this debt. Anyway, I was stupid and naieve and thought the divorce papers took care of this part--by stating I owed nothing on the card...long story short that was not true
Add to that the credit card companies could pursue me in the state I now live in for the next 7 years(while the card would acrue intrest charges and the debt would be even bigger!) Where as they only had a short window to pursue him in his state.
Anyways, I ended up offering to settle the card just to have the nightmare over--I refused to pay it all since I first of all did not charge a dime on it! So I offered the credit card company 1/2
But my nightmare was not over....come tax time I had to pay on that 5000 that the credit card companies "wrote off" on this debt.
I noticed you said you settled some of these credit card debts and I wanted to warn you to be prepared to count what ever is written off as ---income..
I just wanted to prepare you for this possiblity.
But on the upside I know it feels good to be credit card debt free--congrats!
Sorry to be another "warning giver" - but 10 years ago we borrowed money from our 401k to pay off the credit cards. And guess what, about a year later they were charged right back up to almost the amount they had been, and we had the loan to pay back on top of it.
I know you don't think that will happen to you - and I didn't think it would happen to me either. Just wanted to warn you to be careful. It is a real lifestyle change to give up instant gratification (whether in buying stuff or getting rid of debt). Slow and steady really does win the race.
I wish you luck. :)
If it was a 401k account you robbed you are not alone LOL everyone is doing that right now...
Donna,
I'm sorry that happened to you after divorce. When he got the divorce, we did a lot of research about what can still happen after the fact. We called each credit card and got her name taken off and we had to show proof of the divorce too.
All of the accounts are now closed and there's no way of getting them reopened, all of them went to collections.
Last year we settled a few of the credit cards and we knew the difference that was forgiven would be considered income on our taxes, so we know what to expect now next April and we're prepared for it.
:)
Jennifer,
Thank you for the well wishes. I know we'll never end up in this situation again. It was not a 401k/loan that we got the money from, my husband's company has a different savings fund. We do have to pay a penalty tax next April, but we're prepared for that.
I understand about the instand gratification part, but the credit cards are closed (which I've never used) and there's no way to reopen them or get another one (which we don't want). They are completely gone from our lives. The lesson my husband learned was a life changing one.
I mentioned in a previous blog post about how my mom used my name to get credit cards when I was just a minor. When I did turn 18, I went through hell to get rid of that debt and I learned about the reality of credit cards real early.
We're being very careful :)
Thanks :)
P.s. btw, are you still interested in what we talked about before? I am finally done with that wholesale order and now that we're moved in our new place, I can soon get them started. So sorry it's taken so long!
HS,
We didn't "rob" a 401k. We took an early withdrawal of some money my husband put into a savings fund from work, none of it was money that the company he worked for put in.
Hi Jackie,
Yes, I'm definitely ready! I've had your bracelet ready for a while but couldn't find your address! lol! Email me at bjreardon@comcast.net with your address and I'll send it out. Thanks!
- Jen :)
Yay!!! Good for you! We are about a year away but we started with almost 20,000 and now we're down to a little more than $1,000. It feels really good. We also have medical bills to pay off. One miracle at a time. One way we did it was selling stuff we didn't need and paring down to live more simply. It made a huge difference for us and we never want to be in that position again. Being debt-free is insurance for our future and we want to keep it that way.
Jerry
www.leads4insurance.com
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