Friday, September 25, 2009

Handling Ms Brown

Since we have started on the Debt Snowball, we have started to receive calls from debt collectors and one in particular has not been pleasant. Her name is Ms. Brown and she keeps calling about Felicia's court reporting bill. A little background on this bill: Felicia was going to CRID, the Court Reporting Institute, and she decided to leave early because she was in her last trimester of pregnancy and it was difficult to get around with her steno machine. Before the quarter started she told them that she was taking a leave of absence and would return after the baby was born, but they talked her into signing up for the quarter and told her it would be okay if she did not finish the quarter. It turns out they wanted her to attend until her student loan paid them and then allow her to drop, but the student loan did not pay them and now they want to collect from Felicia.

Ms. Brown called Felicia one day and started to tell Felicia that she was in "breach of contract" and needed to make this debt a priority. Now, I do this for a living and I have told Felicia before that a lot of collectors want to make you mad so you will show them by writing a check to them. So she stayed calm and asked Ms. Brown to mail something stating that she owes the debt. Ms. Brown began telling Felicia that she had already sent something in the mail. She then started trying to collect from Felicia and Felicia continued to tell her that right now she would not make arrangements until the proof came in the mail. Ms. Brown continued to tell Felicia that she was in "breach of contract" and how it was a priority. Felicia gave Ms. Brown permission to speak with me about it and Ms. Brown asked why Felicia couldn't handle this on her own. Felicia, again, gave her permission to discuss the matter with me and Ms. Brown continued to say things to Felicia like "you can't handle this, " "you need to handle your debt," and "you're not strong enough to handle this on your own." Felicia stayed calmed and kept letting her know she had permission to talk to me about it. Ms. Brown, finally, said to have me call her.

When Felicia gave me her number, I called right away. Ms. Brown wanted to begin the conversation by letting me know her version of the conversation with Felicia. I stopped her immediately and told her I knew about the conversation and to talk about the business at hand. Ms. Brown started to tell me that Felicia was in "breach of contract", that this was a priority and wanted me to make payments now. I advise her that at this time, we were not able to but in a couple of months would be able to make arrangements and she said that I was refusing to pay. I advised her that I was not refusing to pay, and that we would pay any debt that we owed. I advised her that I would need the proof of the debt in order to begin making payment arragements. Again, she told me that we were refusing to pay and she would notify her client. She told me that we had a chance to voluntarily pay and so naturally I asked what were the involuntary ways to pay. Again, I do this for a living and knew she couldn't tell me unless they were ready to do them. She did not answer the question and just kept saying this was a priority and we were in "breach of contract." At the time of this conversation, I knew nothing about what kind of debt this was. I did not know if this debt was secured by a promissory note or not. But I did know that when a collector uses "breach of contract" they are trying to scare you. The goal is to throw out a legal term to make you feel like you broke the law. I was not getting upset but Ms. Brown sure was. She kept trying everything in the book to make me mad and it was not working. She finally said that she would let her client know we were refusing to pay and would verify our employment and then she hung up.

A few minutes later, I called her back. I wanted to make sure that she knew that we wanted the promissory note or the contract that we were, supposedly, in breach of. This is where I got wise. She said that she would contact the school for the original documents but if they did not have it, Felicia still owed it. Then she said she was not going to send it and she was not going to help us out unless we help her out. I just kept asking her to send us the original contract and she kept saying she was not. Finally, after she was mad enough, I said that I was simply asking her to send the original contract that Felicia was in breach of and she stated that she was not going to and for me not to call back unless I was making arrangements and she hung up again.

After we got off the phone with Ms. Brown, Felicia called CRID and found out that there was no promissory note and we were not in breach of contract. Felicia wanted to call back and let Ms. Brown know and give her a hard time. I told Felicia not to and if she called back to let her know then. Well, a week later she called back and told Felicia that she had a contract and Felicia let her know that there was no contract. The wind was taken out of her sail and again Ms. Brown hung up. The best defense against the creditors is to know the law, FDCPA. For work, I have to take a training module on it every year. Dave Ramsey has good advice for dealing with debt collector and you can check it out here. My advice is to not lose your cool; they know if they make you mad enough you will pay them.

Thursday, September 24, 2009

Handling Hiccups

Lately, we have had some weird things happen at the house that has caused us to get a little off track with the budget. In spite of these things, we have not touched our emergency fund and have just found other ways around these emergencies. Our dryer and our stove are busted. We are renting and the land lord had us call a appliance warranty company but for both appliances they claim are unfix-able and not under warranty.

We are waiting to hear back from the land lords to see what they want to do about it, but nothing yet. The dryer is a simpler problem to work around because we can take the clothes to our parents house and wash them while we visit, Felicia's mom will sometimes take a couple of loads and do them herself for us, or we can go to the laundry mat. The stove on the other hand is little more difficult especially since we don't like to cook anyway and now we have to learn to bake instead of cooking Hamburger Helper. I am kidding but when we cook it is pretty basic. We do eat a lot of Hamburger Helper, spaghetti and meat-sauce, and Doritos casserole. Needless to say we have been eating out more, but we have also used the slow cooker to make pot roast, and used the oven to bake lasagna. It has set us back a little.

We had planned to pay off our two smallest debts to get us off to a great start, but we are only sending off a payment in full for the smallest debt. We are a little disappointed but the way we look at it, we have behaved like adults and found a way around the hiccups without giving up.

A lot of our little debts, are ones that have been around for years that we have not paid anything on and we are looking at changing the debt snowball around a little. We are thinking about paying the doctor bills, and student loans first. We are still going to list them by smallest balance to largest and work through them. When all that is done then with the same intensity we are going to settle on the other debts. We are not really concerned with our credit because we messed that up a long time ago and our main concern is to work this snowball so we can be debt free.

Wednesday, September 23, 2009

Added More To The Snowball

We have had to add a few more things to the debt snowball. The new Total Debt amount is $21,625.22 so that leaves the Total Remaining at $20,637.89. Three debts got added to the snowball, and two of them we knew were coming and we were just waiting on the final tally to come in. See back in May, our daughter got sick and she had to spend 3 days in the hospital and she had to have a procedure done. After the insurance paid their part there was $1,403.00 left to pay. Thank God for insurance!

The third bill is one we forgot about. Felicia was attending a court reporting school here in Dallas that we were paying for on credit (student loans). The last quarter she attended she dropped early because she was in her 3rd trimester of pregnancy and it was hard for her to maneuver with her steno machine. As a result of dropping early, the student loan did not pay for the classes and the school is now charging her for it ($1,508.00).

It looks like if we pay the minimums we can have our debts paid by June 2015. That seems like a long ways to go so Felicia and I have given ourselves 2 years to be debt free. Now, we just have to figure out how to get there.

We are going over our budget and trying to figure out what we can cut back on and how to save more money. We have cut $60.00 from the cell phone, and $20.00 from cable. We know we need to get rid of storage which is $82.00 a month. We haven't use any of that stuff in storage in three years and we probably are not going to use it. We are working on getting rid of the stuff and applying that money to our debt. Also, I get a little overtime every once in awhile and have a chance at a monthly bonus and whenever we get that we can throw at the debt. At times my monthly bonuses can be bigger than my regular monthly pay, but we can't depend on that every month, some months I hit goal and others I don't. Even with all of that, we still need to generate more income so that we can meet our goal.

Felicia is working on selling her sock dolls and jewelry to help with the debt snowball. I am trying to figure out what I can do to generate more income. First thought for me was to get a part time job, either at a bar, a restaurant, or overnight grocery stocker a few nights a week. I am not above doing any of that if need be, but our concern is time with the kids. If I go and do that when will I have time for the kids? I know something is going to have to give and I may have to go out get the part time because being debt free will be better for family in the long run.

I have read about how people have generated second incomes by working at home and I am researching now, to figure out how to do it. One idea I have is to make money blogging. I like blogging about our journey and if I can create a little income doing what I like to do anyway, then I say go for it. I know it is not going to be easy, not everyone who tries it is successful. Felicia and I talked about this and have decided to give it a try for six months. If I do not make money in six months that doesn't mean I am going to stop. It just means I will need to get a second job or work on another way to make extra money.

Blogging has been a way for me to hold myself accountable for the financial decisions that I make as well as help anyone that is embarking on the same journey by showing them what we are going through. It has been great for me to go back and read earlier post to see how far we have come in a short time. We used to be horrible with money, we are not perfect now, but we have come a long way.

We know it is going to take a lot of hard work and sacrifice to get where we want, but we have to keep up our gazelle intensity. We keep reminding ourselves that "If we live like no one else, later we get to live like no one else" This a something Dave Ramsey says everyday on his show.