Alright, what else?

We were playing outside. Frisbee and hula hoops. We were having a lot of fun.

Hubby noticed that the fan on the A/C was spinning more slowly than usual and it started to make an odd noise.

A little later we went back outside to check on it. It made a terrible sounding noise (we both stepped back from the unit) and the fan slowed to a halt.

I was due to be somewhere, so I left him instructions of who to call and what to do. I took my leave and throughout the evening found out:

- Companies can come out immediately, day or night, as advertised, but the service charge is VERY inflated for them to do so.
- It was very likely the capacitor.

The next morning we awaited a call from the company whose number was on our unit. Turns out they did not contact us "first thing the morning" and hubby called them to find out what was going on. Apparently this was not the company that serviced us after we purchased the house; they had the old owner's name in the system. They'd be out "sometime in the afternoon".

We found our company's number. They had a tech there within a few hours. Turns out the compressor shorted out and took the capacitor with it. We'd known that if this happened we'd be SOL. The unit is 10 years old, a 10 SEER system, not supported anymore, and very hard to find parts for. We'd learned this from our home inspector as well as the A/C checkup/maintainer guys last summer.

We had figured we had a few years. The unit was doing okay, though the air handler inside was clogged with mold and dust and rust (which hubby cleaned up as best he could, not having the $800 to pay for them to do it). It ran. It cooled. Our average electric bill was about $160.00. One of the goals we had after filing was to save up money towards the A/C.

Nope. Caput. Done. He showed hubby a few things that made sense to him as far as it being truly broken and not just a sales technique. A new part, should they even be able to find it, would cost about $2000. It made sense to get a new system.

And, best party, they could install a new one that afternoon.

We called the office manager who checked with their financing company. Hubby was turned down. (I, of course, could not apply.) I was shocked. He has really good credit, even great. It was good enough to get a good rate on the house, we've made every payment, he has no other debt except for student loans. They couldn't tell us why. She offered to try their secondary company, and I agreed.

I also ran upstairs to log into his BOA account (with his permission). He has a credit card that we don't use. In fact, when he got the new card in the mail after the old one expired, we snipped it right up. No more CCs for us, no siree. Well, we might need it, and I had no idea even what kind of credit limit he has.

$5500 at 16.9%

For those who haven't bought a new A/C lately, they are rated by SEER. Higher SEER levels indicate higher efficiency, and there are tax credits from FPL as well as the government. 13 SEER is the least expensive unit and the least efficient currently available. (This is all based on very limited research and may not be entirely accurate.)

A 13 SEER system (a huge improvement over our old system) for our house was $3918.00. That includes installation, removal of the old system, a 10 year warranty, and one year of service.

We could have gotten a larger system; we certainly have enough room on the BOA card to do so. However, we decided to get the most basic system.

Was that a mistake? Ask me in a few years. We only knew that we have a senior citizen with a bad heart living downstairs and a 2 year old living upstairs. For us we could do a few days without A/C to price shop. For the other family members, there's no way. We got what we could "afford".

Yeah, yeah, we don't have income right now, so we can't "afford". I should say, instead, that it was the most affordable option.

I called the office manager back after getting the card number off the statement (hubby called and begged for the expiration date). Turns out we qualified for the financing.

At 5 years the payments were just over $100/month at 17.9% financing. This was a percent over the credit card, so we didn't go with that.

4 years had an APR at 14.9%.

3 years had an APR at 13.9%.

If hubby gets a source of income, we can swing the $133.00/month payments over the next three years. It's not an ideal solution, but it works.

If he does not get a job, it's still covered, though it gives us less for food.

By 4:45 we had a brand new A/C system and $4000.00 more in debt.

I have a Feeling that something's going to happen to/break down in the older car in the next few weeks. You know how "when it rains, it pours"? Yeah. I have a Feeling.

Priorities

This post is more personal and has more details about decisions I need to make. It's not really relevant to bankruptcy or filing bankruptcy, but it is relevant to making choices that will affect our finances in the future.

Hubby cleaned out the A/C handler as best he could. The evaporator coils are free of dust and mildew, which is a huge improvement. It wasn't nearly as efficient or effective as the $350 cleaning would have been, but it's made a huge difference. The a/c actually sucks in air now and seems to work better.

There are still a few things that are demanding money right now, though.

One is that we've been putting off getting our teeth cleaned and cavities filled. We both have three or four cavities that, while small, do need to be taken care of. I estimate about $400 each. (We don't have dental insurance.)

The other is that I've been having horrible back and neck pain and finally decided to do something about it. I've had great success at the chiropractor. Each visit is $40. My insurance covers chiro, but the copay is $45.

I need to see the doctor soon as well. I'm due for my yearly well-woman check up. I also want to visit my husband's rheumatologist. The more I learn about fibromyalgia, the more I think it's a strong contender as an explanation for the symptoms I've been fighting with for half my life.

My GYN says that she thinks I have endometriosis but cannot diagnose me without laproscopic surgery. That's $2500 (the amount of my deductible). I think fibro explains my symptoms better.

I'm tired of being sick and tired. You know?

I need to be healthful. I need a healthy body, a healthy financial summary, and a healthy home.

Which is the priority? How do my goals need to change to fit this?

Feeling... Something

I'm not sure what I'm feeling today. I'm down, slightly depressed, dissapointed with myself, and really trying to remember that everyone makes mistakes and to be gentle with myself.

Mostly I feel humbled and a bit hypocritical.

My husband and I have never had problems in any area except money. We've never cheated on each other, we can discuss anything, we've learned and grown together, and in short been a perfect match. Money is the only thing that's been an issue.

We we first got together he had bad credit. He stopped paying everything after he got divorced. He had several checks at payday advance places, owed his gramma $500, and repeatedly bounced checks or overdrew his account. I told him all this was a deal breaker. I told him that it had to change.

And it would. Mostly. He'd make an honest mistake along the way and I'd be shaken and feel betrayed, pissed off, and have a hard time trusting him.

This is why I eventually took over all the bills.

Then, when I was consolidating my credit cards into a BOA Gold Loan I discovered that he had credit card debt he didn't tell me about. It was only $1200, but it was a huge deal. I was pregnant and trying to set things up so I could stop working and enjoy a few months of maternity leave.

I got approval for the loan, received the money, and discovered his card. I didn't have enough to pay off all my cards and his, so I had some debt remaining with Capital One.

It took us about three months to work out. We're okay now, but it was a horrible thing to go through and the timing was awful.

After taking over the finances I had a few booboos myself. Nothing huge. Three or four times of being a day or two late, and two instances of overdrawing an account. (One of them was not my fault, the other was.) I confessed each misdeed immediately. Hubby promptly forgave me each time.

I felt like our debt (all of which is mine since he had poor credit when we got together) was okay and acceptable because we discussed almost every purchase. Sometimes we were forced to use the card (car broke down) and other times we thought we were being smart. A few times we realized it was stupid but did it anyway.

Now I'm feeling like a horrible human being. I know, I know, I am not alone in the experience of drowning in debt. I'm not the only one who's in this situation. Medical expenses, business expenses, emergencies, and downright stupidity are a horrible combination.

I'm still feeling crappy. Who am I to be all high and mighty about a few bounced checks? And now I'm filing for bankruptcy. That's what my attention to detail and transparency led to. Good credit can lead to bankruptcy just as fast as bad credit.

On the other hand, even though we plan on being married forever and have a great relationship (perfect for each other and all that) I started to feel resentful today. Why do I have to be the one to ruin my credit? Why am I the one that has to have all this debt in my name or, alternatively, have the bankruptcy?

It made sense at the time. I had the good credit. I had the card offers and the higher limits. He couldn't get a credit car. But now... grr.

So many conflicting emotions in so little time.

I'm glad I started a blog. Even if no one ever reads this it gives me a chance to get what I'm feeling out there. I don't believe in bottling up emotion.

To Do List Update

The only payees we need to still transfer to our new account are:
- YMCA
- Netflix
- Paypal

We've officially gotten me off all joint BOA accounts. Our sole BOA account is in my husband's name only and will be closed as soon as we confirm that his disability comes to our new checking.

My mom's prepaid for her cremation and paid off her car. I have an idea of how I'm going to have her word a letter that will possibly protect us both based on my research (and subject to the review of our lawyer).

I have quotes for new homeowners insurance and health insurance so that we know what's going to happen later in the year when rates go up. (Our homeowners is dropping us in August so we're switching in late April so that it's before hurricane season but we can continue to get the benefit of a lower rate until then.) We decided to stick with our current BCBS plan with the lower deductible and switch early next year when the deductible resets.

Pre-Bankruptcy Payments Have More Impact than Bankruptcy Itself

Article About This

Is it worth $600 to have less impact to my credit score?

Today is February 26th.

My due dates for debt are March 6, 12, and 14. We should receive our tax refund sometime in March and as soon as we do we're going to get started on our paperwork.

The attorney said it often takes 4 weeks to get everything finalized for paperwork before filing. I'm extremely organized as far as important things are concerned and can probably have most, if not all, of what I need before I even retain the attorney. Then it's a matter of transferring it onto the correct forms.

So chances are--as long as my mom's situation get straightened out--I'll only be 30 days (because it's less than 60) late on three accounts, all of which were previously current.

Is it worth $600 to avoid a hit to my credit?

From what I've read a 30 day late payment can affect you for 1-2 years. However, this article also points out that credit sometimes improve because the income to debt ratio improves so much. Will those two factors cancel each other out?

Things to ponder...

CPA Meeting

I met with our CPA on Monday. I was grateful that they had moved my appointment up by a few weeks; I needed to get our refund faster so that I can file bankruptcy.

He's worked for us since 2004 and I'm quite pleased with him. Because I used to have a corporation (not nearly as impressive as it sounds) all the possible deductions and such were overwhelming. We met him at the school during our business classes. A large part of his client list are massage therapists so he is aware of things specific to our business.

Last year we closed our business. Corporations offer some protection, but I didn't have enough business to justify all the extra fees. 2009 tax filing was partially to officially close our business at a federal level. (We'd already done so at the state level.) We also did our personal taxes.

I walked in and explained that I needed copies of our past tax returns. I have them, but they're in a box, stapled in nice little binders, and I didn't want to have to locate them, dissemble them, copy them at Kinkos, and then put them back together.

"Is this for a loan?"

"No. Um... it's for something with a lawyer."

"Something I need to know about?"

(Very meekly) "I'm thinking about filing CH7."

"You're not alone. You'd be surprised how many people I know in the same boat. How many years do you need?"

I know that the initial request will be for the previous three years and that the trustee can request previous years, so I asked for 2005 onward. He printed them up, stapled business and personal separately, paper clipped each year together, and handed me the stack. He was extremely supportive.

I had sent him an email confirming the amount that our return would cost this year. Apparently I worded it ambiguously and he misread it. He didn't realize we needed to do a final filing for the corporation this year. He was going to give me a deal by making our personal less since he had forgotten and charge the standard rate for the final return.

I bust into tears. I told him I had made sure in the email to ask. He felt bad and reassured me, told me he'd never bait and switch me, and that it was an honest mistake. He realized if he had looked further into his system it would have been clear what we needed to do this year and would have been better prepared. He took what he remembered for granted and didn't check into it.

He apologized some more and told me again he'd never do this on purpose. He told me he'd go ahead and eat the cost and just charge us for our personal return.

It feels SO AWFUL to be in a situation where an extra and unexpected $125 makes me panic and realize how close to broke we are. That's why I was crying. It was a horrible feeling.

I cried again when I found out we were getting more than we needed to file Chapter 7. My husband had about $1500 taken out over the year and we barely qualified for the earned income credit. I wasn't aware of several other credits this year and none of the online calculators I had used (probably because they were for calculating EIC) mentioned it.

Not only am I getting $1500 for the attorney, I'll have $299 for filing, and the additional funds for the before and after classes!

On top of that I'll have a couple hundred dollars extra. Not a lot, but enough to get my teeth cleaned, which I'd been putting off for awhile.

Another very important thing that I got out of this meeting was how we acknowledge my mom's presence. "Renting" is incorrect. First of all it's not a choice we'd make with the tax ramifications. Secondly, no lease of any kind exists. She is "gifting" us $500 a month. It still counts for the means test (and we still pass) but it doesn't make the sale of our home taxable, and since it's under $13,000 a year there aren't any tax penalties on the money.

Our CPA also told us that our bank (BOA) is particularly aggressive. Same thing I keep hearing from other people. I can't verbalize the weight off my shoulders it has been to know I'm no longer on my mom's account. And while I still have a huge to do list for transferring my bank account, it doesn't feel as hard as I had envisioned it.

Coming to conclusions

In June my husband's student loans will no longer be in forbearance. We have one more year that we can put them off if necessary. He owes $60,000 and his payment will be about $320.00.

In October my student loans (about $10,000) will also come out of deferment. I can also defer another year. Payment will be around $100.

Right now we're making it. Just. I can pay every bill we have on time. I can make minimum payments on my credit cards.

We're making it. We can go out to eat about once a month and afford Netflix. We each have $20.00 a month we can use to buy little things for ourselves or maybe visit a Starbucks.

We're making it. Because we're ignoring a lot of things we need.

I have a spreadsheet with our budget. It has tabs for each month. I have month-specific expenses and income in one section and then regular expenses and income in another. This allows me to mark what's been paid, what's been scheduled to be paid (we use BOA's Bill Pay feature), how much is budgeted vs. how much is spent, and so forth.

One category is FSA. That stands for "Freedom Savings Account". In this account I (need to) put money for all the things that are occasional expenses. An example would be our yearly HOA fee, renewing my license, getting our teeth cleaned, car repairs, etc.

I need to put at least $236.00 in a month just to cover the bare basics of "we're SOL if we don't pay this". In order to hit all the necessities I need $475. In order to meet other goals, such as vacations, I need even more.

I've been putting in exactly $0. There's no room.

And it's frustrating. I've cut down my expenses tremendously but something always comes up. When business slowed and I decided to be a mostly stay at home mom I canceled my disability insurance. We canceled AT&T and went with Net10. I found a much cheaper web host for my business website. We used our tax credit to pay off the car loan. I started using coupons. And on, and on. And still we're not doing better than making it.

What happens with the water heater (original with the 1987 house) gives up the ghost? Or when the A/C (10 years old, horrible efficiency rating, and no longer serviceable) stops working? We're screwed.

And when the student loans can't be put off anymore?

I can make all of $75 more room in the budget by cutting out every nonessential we have.

We'll be making hard choices. Hard, hard choices.

We talked a lot and decided that it's silly to spend the next year struggling and stressed when we're going to end up filing bankruptcy at that point anyway.

If we file bankruptcy now we'll have a year to get caught up and put some money in the bank. We'll be able to pay off hubby's student loans in the next ten years. We'll be able to get our teeth cleaned and cavities filled and replace the water heater.