I had 37k cc debt last year, now it's 16k.The 16k seems like piece of cake now! I've never made more than 25k after taxes.Restaurants are always hiring-day, night,weekend shifts.Great way to pay down debt!

Can you quit your job and SAH (even if it's just for now)? You said your job barely pays for daycare and aftercare. Quit, SAH, and offer to watch another kid in your home for $10/hour (a lower rate since it's like a nanny share). But, I'm pretty sure there might be some insurance/liability issues here. You could ask around at daycare/school to see if anyone's interested.
If that's not an option, you could still SAH (this saving daycare/aftercare costs) and get an evening/weekend position (childcare, coffee shop, grocery store, waitress) and none of that income would go towards daycare.

As a sidenote, is there a difference between "walking away from debt" and "declaring bankruptcy"? Or is walking away from debt= bankruptcy?
It sounds like a few PPs just stopped making payments but didn't imply bankruptcy.

Anonymous wrote:wait why are you working if your pay doesn't cover childcare

What are your options? Live without a salary and hope welfare is ok with it?

If they cant afford childcare, I'm 99.99% sure there are way over $100/month in deficit.

Anonymous wrote:Come on people, if OP is underwater on the mortgage, works full time, and can barely cover child are and aftercare on her salary, how the hell is twirling signs or waiting tables going to make a useful dent in the debt? Sounds like bankruptcy was designed for her situation. Oh, I'll babysit your kid for $40/ night and make an extra $200 per week BUT have to pay taxes on it...what's that going to help? When you are drowning in debt from the recession, working for 20 years to pay it off doesn't make since...you wouldn't make enough to cover the interest anyway. Get real.

You get real. Paying off debt can sometimes be about the $100 or $200 different. The difference between making a $20 minimum payment and a $70 payment is huge. Digging yourself out of debt can be a matter of finding a way to stop the negative cash flow, e.g. spending more than you earn. If you are close, then you should get another job and move than monthly balance from the red to the black. Bankruptcy is designed for people that are way over their head and have no relief in sight, usually people who had a source of income that they had built their debt on that has gone away, like a failed business, a huge loss of investment income, or a loss of job.

In this case, OP should be talking to her creditors about debt consolidation, debt forgiveness, modified payment plan, interest rate reduction,etc and then looking for sources of additional income to help get their income to debt ratio over 1 again. If you make more than you spend, even if only slightly, then you can handle debt without bankruptcy. Since we don't know if they are $100/month or $700/month away from breaking even, it's hard to tell if they can get it under control or not. Bankruptcy is not the answer for the majority of cases, and should be an extreme measure.

Anonymous wrote:Wait, a house with no spare bedroom? Are there only two or do you have many kids?

is this for real? many (most?) people don't have spare bedrooms. welcome to the real world!

Anonymous wrote:OP, you need to look at your situation realistically. Declare bankruptcy. Banks and the financial industry have no problems screwing over consumers because "it's just business!" Stop the madness, file bankruptcy, and start anew. Don't be emotional about it. It doesn't make mathmatical sense to keep trying to pay it off.

I thought the rules were changed to make it almost impossible for consumer's to declare bankruptcy. How does it work now?

Anonymous wrote:Contact your representatives in Congress. All congressional offices have staff that deal with constituency case work.

They will be able to give you information on 1) a nonprofit credit counseling service that will negotiate on your behalf to get a better interest rate and 2) programs that help underwater homeowners refinance to a lower interest rate, therefore reducing their monthly payments and freeing up some cash in their budget.

Your congressman (senator or represenative) will have staff that can point you in the right direction. They get these kinds of inquiries all the time. In fact, I know of some congressional offices who have had staff intercede on behalf of constituents in dealing with foreclosure issues.

If you are able to refinance and lower your monthly mortgage payment as well as reduce the interest rate on the credit card debt, this will make a huge difference in your monthly bills. It actually may enable you to resolve your debt issues (or at least get on a path) without having to declare bankruptcy.

If all else fails, then bankruptcy is always an option. But it may not be necessary. Seriously, call your representative.

OP, do not take this advice. Call Green Path, CCC or a bankruptcy lawyer. Trust me, I worked in Hill offices, this is a personal problem, not your dealings with Social Security/Medicare or TRICARE. That is what casework is for, not your personal spending issues, I'm sorry to say.

Good god PP, is this what you think your elected officials are there for?

Why was this thread resurrected? It's six months old.

wait why are you working if your pay doesn't cover childcare

23:00 again. Look into whether you qualify for FHA streamline refinancing. I thought I wouldnt qualify for any type of refi, since my house is underwater and I make enough to pay my mortgage but I do and am looking at a savings of $240 a month. If you bought at the height of the market, you're interest rate is likely "high" like mine.