Have I reached China yet?

Debt the depth of a hole dug to China

Today is payday.  I have direct deposit and it was really yesterday morning at midnight.  I get paid weekly and think its fitting to do finances and debt reduction on Fridays.   Like most of middle America I live paycheck to paycheck.  I make a decent wage and I’m in debt up to my eyeballs… if I stood on my on shoulders to double my height.  Yup, I’m in that deep.

For the most part, I’m going to use REAL numbers here.  Keep in mind that the numbers are all relative based on  your location and cost of living.  A gallon of milk is a gallon of milk where ever you live and will generally have the same comparison to a loaf of bread.  I will give you the basic numbers.

  • Car:               $12,500
  • Credit Card C:  $11,800
  • Credit Card B:  $  3,200
  • Credit Card A:  $ 2,800
  • Medical 1:       $13,000
  • Medical 2:       $  2,500
  • Medical Misc:   $  1,200
  • Lawyer:          $  5,400
  • IRS:               $  4,000
  • Total:             $56,400

Yes boys and girls, you see that number correctly, I am in debt somewhere between 55-60K!  How’d I manager that??  I’m sure some of you might be thinking that I’m a horrible money manager.  I’m not.

It goes something like this…

The car was bought in September of 2007, new.   It was bought while I was still married,  was our second car and very much mine.  Even has a nice sunroof.  We were making a pretty penny and my then husband thought I should have a car that I wanted.  If only I knew what was to come.

April of 2009 I lost my really good paying job.  We all know the state of affairs in the US regarding the unemployment rates and the like.  We can chalk all the Credit Card bills to my unemployment that lasted 11 months.  The 2 smaller balances are closed and in repayment plans.  I’m sure one of them will open back up when it is paid off.

Divorces need lawyers.  Lawyers aren’t cheap.  That started in June of 2008 and my credit cards had little or no balances.  The divorce was final in August of 2009.  That’s what’s left of the bill and oh, did I mention I had been unemployed?

The IRS, now that is a story

During the final mediation for the divorce, I foundTax debt out from the wasband (sound it out!) that they audited us and that we owed them somewhere in the neighborhood of $8000.  I know what the mistake was only I can’t fix it.  It had to do with his W-2 which I can’t request.  I know how to fix it and I can’t.  For the past 3 years the IRS has taken my taxes ($4800).  For the past 3 years… he brought in a refund $9000 (2008) while we were in the middle of the divorce (that’s the short story), he filed 2009 in 2010 which they took ($1000) off the bill.  He still hasn’t filed for 2010.  I wasn’t going to sit around waiting for the IRS to rack up more interest & penalties and risk garnishment so I entered into a repayment plan with them.

Know what happens when you need an emergency surgery and you have no insurance?  Yep, mega medical bills!  I applied for relief from the hospital however that wasn’t a huge help.  I’m sure there might be more in misc than I  know as they seem to trickle in randomly.

Tada!  That’s how you get in debt that far in less than 3 years.  Fun yes?  Ummm no!  Next week I’ll give a few more details about what I’m doing and why I’m doing it.