Saturday, December 15, 2007

My Prosper loan funded!!!

I am soooo excited this morning!!! My loan funded! Now I can payoff and get rid of those plundering PayDay loans that have been keeping me down.

Prosper Lenders, Thank-You soooo much for this loan! I am so very grateful and feel blessed.
I will make you my first priority to pay you back early in 2008!

And to the lender on the mountain - thank-you.

Friday, December 14, 2007

How did I get here? - 9/11 was the beginning

If I'm going to tell my story then I might as well explain that my financial problems started several years ago. Right after 9/11 I was laid off work for six months. I worked for a major computer company at the time and they were in the process of selling our software division to a foreign company (in Israel). Well three weeks after 9/11 happened the buyer company decided that they didn't want to bother with the sales related personnel. They only wanted the developers and a small staff of managers - so the rest of us were let go. I tried any and all companies during that time but I just could not get a job. Six months later I finally took a position with a very small company that paid me half of what I had earned the previous year. And I was driving to and from work 180 miles round trip each day. But I had a wife and two kids to take care of so I did what I had to for employment. I also went through almost all of my life savings.

With 40% of my annual salary gone and my decreasing savings and my not getting home at night until very late I finally had to sell my house and move my family. I barely had enough to get us into another house. Right after we moved into our second house I was laid off again.

I ended up at another small company. This time a startup. I worked for that startup (founders and owners from India) for almost two years. But they screwed me when they got bought by a much larger company: I had vested nearly 70000 shares of common stock which I purchased. I then left the company but kept my shares. The board of directors voted that Common shareholders - such as myself and several others - would get nothing, ZERO, from the buyout. They voted to pay ONLY the Preferred shareholders. I lost everything.

(So I've been burned by a computer hardware company owned by founders from India and I've been burned by a computer software company based in Israel - this is what happens when Americans work for foreigners. Not to mention all the American lives lost on 9/11 due to foreign terrorists!)

And it's been a struggle ever since. My life was going great up until 9/11. But it's been downhill since then.

Friday, December 7, 2007

Paid off one delinquent - now current

Some good news. I was on a repayment plan for the last three months with one of my creditors. I called them today and found out that my last payment made yesterday brought my account up to current status.

While on the phone I asked the customer service rep to please notify the credit bureau agencies as soon as possible and ask them to remove the delinquent status from my report. She said that she would send an internal email within the company to make that request. I'll follow up next week to make sure that request was made. The sooner that and the other two remaining delinquents are removed the better it will make my credit score.

I monitor my and my wife's credit score monthly through Experian. It makes me feel good to see that my wife's score has begun to improve over the last 3-4 months. My FICO score has stabilized and will begin to improve soon.

Saturday, December 1, 2007

My loan request - offering 35% ROI

(Here's an email I sent out to some friends and relatives. It hurts to ask people for money. Beg, Borrow, or Steal - the only thing I haven't done is steal for money and I won't do that.)


I've applied for a loan on and if you're interested in a 35% return on your money then you might want to checkout my link below.

You can bid as low as $50 on my listing. If you sign up as a lender and bid on my loan, you'll earn a $25 sign-up bonus.


Stay away from Payday type loans

I want to payoff my PayDay type loans. They are costing me $1100.00 in fees alone each month. One loan is for $1500 and the other loan is for $500. I get paid twice per month and each time they take out $550 as a "fee" for the loans. I need to break the cycle of super high "fee" PayDay type loans. It's terrible that they be allowed to charge exorbitant "fees".

I'm going to try and see if I can get some help. I'll keep you posted.

Mailed 3 removal requests

I received three account member removal forms today from three creditors. I filled them out quickly, had my wife sign them and then mailed them the same day today. I'm trying to improve her credit score - I don't want to drag her name and credit score down as she doesn't deserve that.

Three other creditors just removed my wife's name off my accounts while I was on the phone with them and made the request. I'm the primary and I had previously added my wife as a secondary signer - that was during our good times when I could support the both of us and my kids on my salary alone. We're working our way back to those days again - 2008 looks better.

One of the things I've started doing is attending church again. I've been going to a local Christian church for about two months straight now. It helps to bring me some peace of mind. In these times of my duress I now know why headstones list Rest In Peace on them.

Friday, November 23, 2007

Protect my wife's credit rating

I need to protect my wife and my kids.

That's supposed to be one of my primary responsibilities as a husband and a father. I've neglected that role.

So today I called all of the creditors I had that I had added my wife as a secondary card holder and I requested them to remove my wife from the account. This way they will stop reporting her as a poor borrower to the credit bureaus such as: Experian, Equifax and TransUnion.

My wife did not incur the debt - I did. The last time I refinanced our house she did not even sign the mortgage papers because she did not agree with the finance terms and payments. I should have paid more attention to her judgment.

Anyway, I now pay more attention to what she says and thinks.

Back to my reasoning for removing her from my credit cards. I am on repayment plans with 14 of my 16 remaining unsecured creditors. So if I remove her name from seven of these accounts - which I am the primary and she is the secondary - then her credit score will continue to improve. Of those seven credit card accounts, three removed her from the accounts while I was on the phone and the other four accounts said they would send me a form. I'll update my blog later with the results of the form letters.

My wife doesn't misuse credit the way I have done in the past. In fact, she proudly will come home from a Kohls or a Payless or a Ross and show me her new $5 dollar top and new $5 pants that she found on sale at one of those department stores and paid for in cash.

She really deserves more than the person I am. But maybe I can change and live up to the person she deserves.

Saturday, November 10, 2007

Balance Liquidation Plan

I thought I'd share some history about how many Balance Liquidation Plans I have entered into with the credit card companies. This is a response I sent to someone who had asked me about my story.

Adding to my story, I do realize that this is a situation that I created. I know I'm responsible for this and I regret the decisions I made - the multiple refinances, especially the last one.

Also, a major mistake I made last year (Summer, 2006) is that I refinanced the house so I could get cash out - a nominal $19,000 after pre-payment penalties and broker fees - in order to pay back some family members, friends and credit card bills. Paying back family members and friends was the right thing to do but instead of refinancing the house I should have just renegotiated with my credit card companies and asked for "Balance Liquidation Plans" to lower the regular monthly payments.

Since November, 2006 I've arranged fourteen Balance Liquidation Plans with fourteen credit issuers. After I went delinquent more than 30 days with them because of my insufficiency to pay - they said I had to be delinquent in order to get put on Balance Liquidation Plans - they agreed to close my credit cards and lines of credit in exchange for my agreement to payoff my balances (about $128,000 now - I know it's terrible but I was a single bread winner in a household of four people and my layoffs didn't help) over the next five years at rates ranging from 0% to 6% interest and monthly payments at about 55% of what used to be the minimum payment. That has saved me almost $2500 per month. I've got three at 0%, two at 1%, four at 2%, three at 3% and two at 6%.

All the credit card companies have been very understanding once I explained my situation and showed proof of my mortgage payment obligations. Discover Card was the best.

Also, last year I took on two part-time jobs but they ate into the time I needed for my full-time work so I had to quit those part-time jobs.

Maybe my story will help someone else to avoid the mistakes I made.

Thursday, November 8, 2007

Hardship Letter example

Here's a Hardship Letter I wrote to American Express. You can use this as a template for your own letter. I worked out a 72% settlement with them. Your circumstances are probably different so include them as needed.


In regards to: (Your name) - (account number)

American Express
Attention: Settlement Department

Dear American Express,

Subject: Hardship

I am requesting a Settlement of 50 to 60 percent due to my severe financial situation.

My income dropped and does not allow me to make full monthly payments. My paychecks from my employer, (Employer name), and my wife, (Your wife's name)'s, paychecks barely cover our 1st and 2nd mortgage payments.

I started working for (Employer Name) in (Month), (Year). My salary at (Employer Name) is ($xx,xxx.xx). I am including my and my wife’s most recent paycheck stubs as evidence of our earnings. My wife’s annual salary is roughly ($xx,xxx.xx). That gives us a gross monthly income of ($xx,xxx.xx). But our net monthly paychecks total ($x,xxx.xx). I am also including our mortgage statements from (1st Mortgage lender) and (2nd Mortgage lender). Our mortgage payments are ($xxxx) per month. So we have only ($xxxx.xx) a month left over for living expenses, car payments and credit card payments. I am also including a spreadsheet of my monthly credit card payments, car payments, and living expenses. As it is, I run in the negative each month. I requested loan modifications from my two mortgage companies but I was denied. I have spoken to DMPs but we don’t qualify. I am trying to avoid Bankruptcy and/or Foreclosure.

Our normal monthly payment on our 1st mortgage is ($xxxx.xx) and our normal monthly payment on our 2nd mortgage is ($xxxx.xx). So we are supposed to be paying ($xxxx.xx) per month just in mortgage payments – that’s (xx) percent (total mortgage payments divided by net monthly income) of our net monthly income just for mortgage payments! We need some help.

We have living expenses of ($xxx)/mo. (groceries, gas, etc.), Utilities ($xxx)/mo. (Water, Gas, Electric), Insurance premiums ($xxx)/mo. (Life, Auto, Home) and Property Taxes ($xxx)/mo. We have credit card debt and auto loans of about ($xxxx)/mo (see attached spreadsheet). We are trying as honorably as we can to make our payments each month.

Please give us a settlement of 50-60% of what we owe. As it is I would have to borrow that amount. I have no assets and no equity in my house. I have been laid off of work for a total of (some number) months since (Month/Year). These layoffs ate all of my savings, 401Ks and home equity. I have gone from planning for the future twenty years ago to trying to survive week to week. This is not what I or my wife ever envisioned would happen to us. It is a hopeless situation.


(Your name)
(Your address)
(City, State, zip code)
(Mobile number) (Mobile – call first)
(Home number) (Home)

Monday, November 5, 2007

60 percent settlement and loan modification attempt

I have to tell you that I was able to settle for 60 percent with one of my credit card companies before my account would have gone out to a collection agency.

This particular credit card company was obviously willing to work with me. I had only had the credit card for about one year.

Unfortunately you have to be behind in your payments by one to two months before the credit card companies will work with you. There was one case where I was behind by three months and I was still able to settle with the credit card company right before it went out to settlement.

(I am not proud of this by any means. I made a lot of stupid mistakes and I acted frivolously, carelessly and most of all irresponsibly. By now my wife really should have left me a long time ago and I really don't deserve any respect from anyone. The worst part is that I have kids that I ... that I have just not been thinking of. At the same time I was laid off for a period of nine months total during the last six years so it's not completely my fault - at least that's what my wife tells me. Anyway, back to my story.)

You just need to tell them the truth about your financial situation and the reason(s) why you are unable to make your payments on time. In my case I had two reasons: one was that I had started a new job where I made 16% less per month than in my old job and the second reason was because my mortgage payments (1st and 2nd) had increased by 57% more per month - no lie.

My mortgage payments increased so much because I made the very bad mistake of refinancing my house during late summer of 2006 - August to be exact - and agreeing to interest-only loans for my first and second mortgages. My 1st was at 7.75% and my second was at 12.5%. They were stated income loans but at the time I did have the cash flow because I was selling stuff on eBay. The story behind those loans deserve a whole other blog. That's for another time. Needless to say but my mortgage broker never should have put me into those loans which are really the cause of my bad financial situation - if only I'd gone full doc. Of course I never should have signed those loans.

What I should have done back in September 2006 was to start negotiating with my credit card companies instead of refinancing into an exorbitant loan with excruciating terms. As it is I applied for a loan modification this year with the lender (1st mortgage) and I was denied because of "insufficient income". Later - September 2007 - that loan servicer sold my loan to another loan servicer and I again applied for a loan modification with my new loan servicer. I was again - for the second time this year - denied a loan modification. This time the loan servicer said that the "investor's" terms for my loan - I suspect mortgage backed security - did not allow them to modify my loan with newer, more friendly payment terms.

However they did allow me to spread out two missed loan payments - they told me to not make the payments to be eligible for a loan modification, then told me the investor's terms didn't allow one after I had already applied and sent over lots and lots of financial documents - over three years.

So that helped me financially during the last two months. I still have nineteen credit cards and lines of credit that I have entered into Balance Liquidation Plans to payoff those creditors. And I have closed all but one credit card account (limit of $300).

Well, more to come in later posts.

One last thought - if you are having financial struggles and you feel like you've let your family down, please seek some help. Please find someone you can talk to about your feelings. I know what it feels like to not think of yourself as a man, to not think of yourself as taking care of your family. It hurts. And you feel that you've hurt your wife and your kids. But there are worse things in life than losing your dignity. Look at the young men and women putting their lives on the line each day overseas for all of us back here in the United States. To give your life is the ultimate sacrifice for loved ones. But don't do it for what you might think are financial reasons. You have to think about the emotional impact on your family. Your family needs you, need your presence in their lives more than they need insurance money. When I watched my daughter graduate high school, when I watched her get ready for prom, when I listened to my son talk about going into the service or going to college, in the back of my mind I thought about how I might have missed those moments and I was glad that I could look at my son's and daughter's and my wife's face. If you are a man reading this remember that it is better for one person to suffer each day than for your whole family to suffer. Just try to continue to make the best of their lives and let that be your satisfaction.

Friday, November 2, 2007

Start getting out of debt

I've decided to chronicle getting out of debt - my debt. I hope this will help others to get out of debt. At some point I will talk about how I got into serious debt - credit cards, lines of credit, car loans, car leases, quick payday loans, etc. But not today.

At my worse point I owed more than $150,000.00 - and I am ashamed and embarassed about that. I never intended to end up this way. I have gone through a total of nine months of being laid off during the last six years. At one point it was a six month layoff right after 9/11. Of course I made some bad financial decisions as well. No one created this but me.

I am a family man with two kids (older teens) and a loving, caring wife. They do not deserve to have burdens - neither emotional nor financial - thrust upon them. You see, I was raised to be the breadwinner of my family. I am proud to say that my wife never worked during our 20+ years of marriage. But now she does work now that my kids are in college - nothing fancy, just the local community college. I'm glad that my wife has work that she is proud of and enjoys. And my kids are more aware of the need to save the money they earn from their part-time jobs while going to school.

Anyway, I plan to share with you how I was able to negotiate with my credit card lenders - on my own - for what they call Balance Liquidation Plans. Plans to payoff my debt in five years. A major goal and one that I hope I'll achieve.