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.