Consigning Clothes

Admittedly, I'm a clothes horse.  So is my mother-in-law.  Combined, we have passed this trait on to my stepdaughter, who, at 9, is very conscious of how she looks when she leaves the house.  Fortuantely, none of us are caught up in labels.  Unfortunately, it seems that for all of us, more is better, and letting go of something is heart-wrenching.  The three of us all have closets bursting with more clothes than we really need. 

For me, I love buying new clothes.  It's not about how much I can spend...on the contrary, my game is to figure out how much I can get for the least amount of money.  For my birthday last year, my mom gave me $75 and took me to the mall and said, "Get whatever you need."   I squeezed every last penny out of that $75;  my take added up to:

• $20 on a watch (the one thing I really NEEDED)
• $13 Victoria's Secret bra on clearance
• $42 - the rest of it on:  3 shirts, a pair of shorts, a skirt and lip gloss

Point being, while I love getting new things and the feeling of wear said new things out in public, I end up with a lot of unused stuff in my closet.  I used to do a purge once a year and take about four garbage bags of clothes to the thrift store as a tax write-off charitable donation.  (And when I cleaned out the Star's closets, that donation would double.)

Since we've had our spending slow-down and I've been really conscious of money going in and out, I've looked into other avenues for no-longer-used clothing.  A local organization does a huge kids clothing consignment sale twice per year.  I used to shop this for great bargains to add to the Star's closet; now I use it as a way to clean out her closet.  (Although, any closet-cleaning that I do has to be done when she's not around; she has the same outlook I have on clothes that haven't been worn at all: "But I might want to wear that sometime...in the distant, far-off future.")

So far, I've made an average of $30 per consignment sale.  I'm sure my husband would say that's not worth the time it takes me to sort and label all the clothes, but to me, I've got more time than money, and it's $30 I didn't have before the sale started. 

Unfortuantely, I think I'm running out of things to cull out of her closet - this kid is going into fourth grade and has been wearing the same size since the end of her kindergarten year.  Her body shape has changed from short and chubby to tall, long and skinny, but the clothing size remains the same.

For my own clothes, I've started taking them to a new consignment shop in our town.  So far, I haven't had the best of luck.  The first go-round, last fall, I would go into the store and see my stuff on the racks and tagged for sale.  The way this shop works is that if your stuff doesn't sell in three months, they'll call you to come pick it up.  Well, after the three months, I didn't get a phone call, so I assumed they must have sold everything and I'd have some money there.

Not so much.  Apparently, all my stuff disappeared into a black hole - after my first three months of consigning, I didn't have a red cent...nor did I have any of my merchandise!  I've got a bunch of clothes back in the shop for a second go-round now. 

And, amazingly, after 6 weeks, I went in this past weekend and discovered that I'd made some sales and the store had kept track of my money!  Three pieces of clothing had sold and my take-home "profit" was $7.58.  Unfortunately, I went into the store with little Miss Star, the one who loves to shop.  At first she was eyeing up some shoes, but I pulled her away from them - what 9-year old needs clear plastic stillettos?  But then she found an adorable top that she had to have, plus we found a bracelet that would go perfectly with what we were giving my mother-in-law for her birthday. 

So we plunked those two items on the counter and paid out $7.34.  And I made 0.24 for six weeks of consigning.  But I've got a few more items on the racks in there - next time I go to pick up money, I'll leave the kid at home!

Credit Counseling Phase I

Last night, we made our toll-free, mandatory credit counseling phone call.  It was quite underwhelming.  Basically, it was another rehash of our income, expenses, budget and what would get discharged in bankruptcy.

The gal asked what our financial goals were: to be solvent!  We articulated: 1) to be able to pay bills on time with cash on hand, 2) to live a cash-only lifestyle without credit, 3) to be able to save a percentage of our paychecks and 4) to have some money leftover at the end of the week to have a life (or just go out for a fish fry).

Then she began looking at our income/expenses and tried to help us come up with places to save money or reach our goals.  To be honest, everything she said was nothing that we haven't already evaluated or that I haven't already read online.  I can't say there was one big revelation out of the whole experience.

Fortunately, this pleased my husband, who had been pretty apprehensive leading up to the call.  By contrast, it irritated me, because I feel like we just shot $50 down the drain and didn't get anything for it except for the "blessing" to go ahead in our plans.

Signing Our Life Away

All has been quiet in the bankruptcy progression recently, up until a meeting at our laywer's office last Friday.  In just under an hour, we signed a bunch of documents to 1) protect our home and vehicle loans and 2) start the discharge process on the credit card debt.

Our lawyer's legal assistant is so sweet and spent some time talking to us about how this will be a "fresh start" and that there's not the stigma to BK as there has been in the past.  Um, well, there's still a stigma in my mind, and it's making me quite anxious and on the verge of tears lately.

Also, the process is not cheap.  We ended up paying $1,500 up front on Friday.  That's a $299 filing fee and $1201 to the law firm (from whom, apparently, we're getting a discount).  Also, we are required to go through a two part credit counseling session, with each part priced at $50.

So where'd we get essentially $1600 for all this crap?  Borrowed again from the Bank of Mom. 

When I called to make an appointment for the credit counseling yesterday, I was pleasantly surprised to learn that we could do it over the phone by calling a toll-free number instead of schlepping to an office an hour away.  However, it kind of feels like something this company does just so they can say we're satisfying the requirements - it almost feels like there's not going to be any effort put into it.

Oh, well, I guess we'll see on Thursday night when we call in.

Slow Going

Now that we've pulled the trigger on our BK decision, it seems to be slow going.  We were supposed to have a second appointment with our lawyer yesterday, but I had to reschedule because Mr. Fix-It had a work conflict.  So now we're waiting til July 9.  Mainly, I just want all this worst part to be over so that we can move on to the business of repairing our credit.

Not that money emergencies don't continue to pop up on a near-daily basis around here.  Last weekend, we had some horrible summer thunder-and-wind storms roll through.  We woke up Saturday morning to one of the big trees in our backyard in a horizontal position instead of vertical.  The top branches cracked right off and have now created a bid jungle mess in the backyard. 

Also, as we found out last night when our tree removal friend came to look over the job, one big branch is laying on the roof of the house.  It's already started to buckle the soffit and facia area.  Who knows how damaged the shingles are underneath.

Supposedly this is what homeowner's insurance is for, but our deductible is so bloody high, I just don't even know if making the claim will be worth it.  I'm calling our agent this afternoon, of course, just to see what our best course of action will be.

Oh, and the brakes on my husband's truck are starting to squeal.  He's assuming he's going to need new front brakes sooner rather than later.

Sweet Relief

I have to say that after our first visit with our lawyer in deciding to delcare Chapter 7 bankruptcy, I experienced a couple instances of utter relief.  First of all, just the act of making a decision (even though I knew it was going to crush us) was liberating.  It felt good to take a forward step and stop dithering in uncertainty.

Also, immediately after the meeting, I was able to confidently pick up the phone when creditors called and say, "I'm sorry, because of financial difficulties, we've decided to file Chapter 7 bankruptcy.  I've been advised to refer all calls of this type to our lawyer."

And voila - gave them lawyer's name and phone number (sometimes address too) and that was that.  For the most part, everyone was VERY NICE about it.  These customer service reps were suddenly trying to put me at ease, make me smile and two even said, "We look forward to doing business with you again in the future." 

It was a very different experience than I'd anticipated.   It led to more peace in our lives, as the phone line hasn't been lighting up like a Christmas tree for the past three weeks, and when it does ring, I can answer it in anticipation that it'll be a friend or family member or someone whom I want to talk to.

I'm sure there's more stress and uncertainty and grief down the line, but for right now, I've enjoyed our June reprieve.

It Really Feels Like Drowning

I kind of find it ironic that one of my greatest fears is drowning - literally.  I've never been a strong swimmer, and when water rushes over my head, I lose all sense of place orientation and flat out panic.

So when you hear the phrase "drowning in debt," it's amazing how accurate that is.  When the creditors call, you get the same completely disoriented feeling, the flailing and thrashing around, the inability to breathe...you realize that you're drowning in debt.

This was the feeling I had this past winter/early spring.  By that time, I'd given up on even attempting to pay any credit cards.  Up to this point, I'd felt a moral obligation to at least send them $20 a month.  But that didn't even make the minimum payment, we were still get socked with late fees and over the limit fees and inceased interest rates....it was a sickening cycle. 

NOT sending in the $20 a month was also sickening. Frankly, I felt I was in a no-win situation.  At first, I'd answer the phone when the creditors called and we'd do a little dance where they'd offer some "reduced" payment, I'd say that I couldn't even make that, they'd say there was nothing they could do for me, and the following week, they'd call again to go through the same ritual.  I got to the stereotypical point of not answering the phone (unless it rang after 9 p.m., because I knew they weren't allowed to call after 9).

During this time, my husband was job searching, aggressively, as is his habit.  He is an excellent job candidate and doesn't like sitting back and collecting unemployment. 

Finally at the very end of March, he was offered a job - less money, but eventually good benefits and, perhaps most importantly, in a field he thought he would enjoy.  The other catch was that it was just part-time to start out. 

By the time he started work in April and I tried to put together some kind of household budget based on his new income, it was time to face facts.  We knew we needed to do something to get out from under the debt we'd incurred.

It seemed we were faced with two choices:  1) negotiating charge-offs with all the credit cards or 2) Chapter 7 bankruptcy.

The primary reason I was strongly considering the charge-off option was because at least then I'd feel like I was paying something (albeit a reduced price) for what I'd charged over the years.  I started out trying this with a smaller card that we had.  The total amount on the card was something like $767.  Actually, the card issuer contacted us first about a settlement offer.  They would consider it paid in full if we paid $483, which they wanted either as a lump sum or over three months (at $161/month).  I took the three-month option, because, while $161 a month was a pinch, $483 all at once was out of reach.

Evaluating that experience led me to believe it wouldn't be so horrible going this route with all the creditors.  But reality was, I couldn't do it with everyone at once.  It would have to be a one at a time deal.  And I don't think the last creditor in line would be so patient as we tried to pay off everyone else.  Also, I don't think we'd get away that cheaply with any of the other creditors, as their balances were much higher. 

We talked about borrowing a big lump sum of money from my mom to take care of charge-offs.  This option left a really funny feeling in my stomach.  I don't know why I was okay accepting her help in paying monthly car payments, but asking her to buy our way out of consumer debt?  That felt like shirking responsiblity.

Also, in researching the charge-off option, we realized that any debt that was written off would be counted as income at tax time next year.  And we probably wouldn't have the money to cover the taxes then, which would lead to more borrowing from the National Bank of Mom.

So we met with our lawyer at the end of May to discuss Chapter 7 bankruptcy.  Why didn't that feel like shirking responsiblity?  Because we are going to be punished for it.  Big time.  (Is this some form of latent Catholic guilt rearing its head?)

The End of the Beginning

I've been trying to sum up the "how we got to where we are" story as concisely as possible, but  it's been a long road. 

At the beginning of this year (2010), in addition to worries of debt, we received a notice from the state that the state would be re-evaluating the need for child support for my stepdaughter (the child support enforcement agency had been dismissed from our case on the agreement of both sides early on in her life).

Now that we had her on state insurance, however, we somehow got flagged for this re-evaluation.  Ironically, the state summons arrived in the midst of the open enrollment period at my job, and after some investigation, I had already determined that it would be cheaper to insure myself and my stepdaughter through my work than through the state.  (Even though the state will cover any kid under 19, the premium is on a sliding scale based on income.  Even though we felt like we were circling the drain financially, we weren't as bad off as many other folks.  This is something we had to remind ourselves continually to be grateful for.)

However, the whole child support summons deal led to a sit-down in our attorney's office.  He was going to work to get the court date dismissed, based on the fact that my SD would be off the state insurance roll.  In preparing for our attorney meeting, however, we had to fill out an income/expense report.  The picture it painted was sooooo very ugly, in terms of how far in the hole we were at the end of each month. 

Seeing it in black and white was discouraging.  This meeting at the end of January was the first time that our attorney brought up the term "bankruptcy" as an option to eliminate our credit card debt, which had climbed to an ungodly number (over $20,000 at that point). 

The other option that he presented to us was to get the creditors to charge off a significant portion of our debt, in return for a lump sum payment.  He told us that obviously, my current strategy of paying a little bit here, a little bit there to each creditor wasn't doing anything to get us ahead.  He did inform us that any debt that creditors wrote off would be considered income for the following tax year. 

And even if he (or we) managed to negotiate a debt reduction from each creditor, where were we supposed to come up with various lump sums to pay them off?  If I can't make a $65 minimum monthly payment, I sure as hell can't pay off a $1,200 bill!  My husband suggested that in that case, we'd have to appeal to my mom (who most definitely has the money, as I've been privvy to some of her finances since my dad died).  That idea had even less appeal to me than ripping out my fingernails one by one.

So we left that attorney meeting with sunken hearts and swimming heads.  We knew we were facing a tough choice and there was no easy way out.

Three days later, my husband was laid off.  Again.