I Ask This with Humility....

I've read lots of good advice from others. Here is my own two cents worth: My advice is to find a way to avoid bankruptcy. The student loan companies should be willing to work with you; you should be able to get a deferment for financial hardship. You could also cut back on expenses. Good luck!

Hey you are so not alone...we don't have our own house, but have two vehicles, one of which the ex has but we pay for it. It is soooo hard, and things are so tight. Even keeping everything to a minimum we have school debt like you do.

You do have protection but I highly recommend a lawyer to get through this. Many ppl try to do these things on their own, but the cost is really worth it. You can do an hour consultation for anywhere from 100-300/hour. Go prepared (you sound like the prepared type so this shouldn't be an issue). Make a list of questions, figures, and bring a copy of both your credit reports. Have everything with you as any little thing might be the key! Lawyers are amazing at loopholes and we hire them to find them *winks*. Hiring a lawyer got us through a tough time and had we not we would have lost out HUGE!

You might be able to get through and keep things up using debt consolidation which the lawyer should have an idea on a good one. I would stick with their recommendation or get one from a close friend. This will save you from going under with the student loans.

Student loans - research grants!! They abound for everything under the sun. See if his new job (if school related) has a tuition program. Sometimes they will back pay a portion of fees. Can't hurt to try.

Also a second vehicle isn't always necessary so really evaluate that one. A lot of ppl think it is, but we have four kids and I stay at home. I hate not having transportation, but I set up with another stay at home mom for emergencies, and plan with hubby for appointments (he will carpool on those days). Look into community carpools for hubby - many jobs give incentive for using these! It cuts on gas and is often overlooked (we overlooked it till someone at work asked dh if they could carpool - we cut a 100/mn doing this!!). If that second vehicle is necessary (sometimes it really is!) then the lawyer should know what to do to help you out.

You are not alone - I know you got some harsh answers here - I think people really don't understand that even hard-working people with tight money standards get whiplashed by the economy. My hubby has never been out of job, our debt is primarily school loans, and I religiously cut coupons and shop clearance, but we are struggling too. There is a way out - and your good credit should get a better response from the judge. Just be willing to really work with them and they will work with you. You'll be amazed! You can get through this - you are already on the right track. It is scary, but it will end. I promise it will. Best of luck!!

Here's one of my favorite quotes right now:

"The drafters of our Constitution guaranteed the right to file BANKRUPTCY because they believed that free people should never feel imprisoned by their debt."

There are many times when bankruptcy is actually the SMARTEST option, but people don't take it because of the middle class social stigma.

It's actually 100% possible to exclude certain debts and keep others (like house/car/student loans). That's usually Ch. 13, though, not CH7. It CAN be 7, but these days it's usually 13.

So keep your chin up, talk to an attorney, and see what the smart things for YOU to do are. They should be able to give you good advice as to what to do with your car problem, also. PLEEAAASE don't even consider selling your house or your car until you've spoken with a reputable attorney. And a reputable attorney will spend the time to lay out the differences in how they relate to YOU between 7, 13, and consolidating (consolidating is *usually* the not-so-smart option for anyone with any assets...or whose income is going to be changing in the next 5 years...or anyone who runs the risk of losing their job in the next 5 years). The good ones help you find the answers that are legal, moral, & smart.

And we, for 3, are with you.

It's great and all to squeeze blood from rocks, but what DOES one do when one runs out of rocks? Look for more rocks? ...Well, until I get my diploma...probably yes. ;) But I don't have to beat myself with those rocks.

Z.

Times are tough. And tough times call for tough decisions. You don't want to go further into debt when you are already teetering on the precipice. Our family has had to confront our long-held attitudes (and lack of aptitude) with money over the last year or so, and it hasn't been easy. My husband's former business that went south, coupled with plain old stupidity, has us digging out of a big old hole. But digging we are. We recently made the tough decision to sell the car we bought new in late '06 (we broke even but got rid of the car payments), and buy another older car, which costs just a little more than our other older car, which we're planning on selling as well. We're about to go down to one car, which won't be an easy adjustment, but it's the right thing to do for us. We've made many other sacrifices as well, and although it's not always easy, we feel really good about it -- and we were able to pay off a big chunk of our debt last year (although we've still got a ways to go).

When we realized we were in trouble and didn't want to live like we'd been living anymore, we heard about Dave Ramsey from a couple of different sources and immediately signed up for his Financial Peace University (FPU) course. I would recommend it to anyone. It helped us get on the same page and turn our lives around. He has an online community that is very strong, and you can get great advice and a true sense of community from the forums there. I urge you to at least check out Dave's website, which is full of great resources: http://www.daveramsey.com/

He has a great online video that shows you how you can stop making car payments and drive "free" cars for life. It's truly inspiring stuff, and doable! Check it out: http://www.daveramsey.com/etc/lms/drive_free/

Take the $3K and buy yourself a nice used car before signing up for more car payments. (Or, even better, buy one for $2K and put the other $1K in a "baby" emergency fund if you don't have one.) You'll be glad you did. There are plenty of decent cars that will get you around for $2K or $3K and you can continue to save up to trade up in the future, without those nasty interest charges. Go to the message boards (https://www.mytotalmoneymakeover.com/modules/fusetalk3/fo...) and get inspired, pick up a few tips, or find a new community that understands where you're at. Or sign up for FPU (http://www.daveramsey.com/fpu/home/). We did and it is changing our lives. Our relationship has never been stronger, as we're now truly on the same page, united in our goals.

Dave also has a radio show (3-7 pm weekdays on AM 630), and a show on the Fox Business Network (5 and 9 pm weekdays). I listen to him in the car and sometimes at home and it helps keep me focused on the goal.

Keep your hope alive, get inspired, and you can change things. Good luck to you.

My advice to you would be to take your $3000 down payment and find a nice used car and just pay cash. Then you will own it free and clear and not be adding any monthly expenses to your already tight budget. I do not know about filling chapter 7...but I do know that you can not add in your student loans to be forgiven, so you will still have Mortgage, student loans, day care on top of all the rest of the basic bills we all have, electric/water/phone/insurance/food/gas.

I know the thought of buying a cheaper car sucks butt however you gotta do what you gotta do...and it can be done. We bought a reliable basic second car last summer when gas prices were so high and it has suited us just fine. 02' dodge neon, it is an ugly marroon color, you have to manually roll down your windows-yuk!- but it runs great, is safe and the best part---we own it outright!

Why add more debt when you cant afford what you've got? Doesn't make any sense to me...especilally when there is another way.

Think about it!

K.

I strongly suggest that you get legal advice re: the bankruptcy. With just the info that you have written here I think that you may not need to file for bankruptcy.

My husband kept insisting that we had to file bankruptcy. I consulted with a lawyer and he said that we definately did not need to file for bankruptcy. We refinanced our house and stopped using credit all together. We were able to combine some bills so that our payments were less.

This lawyer met with me for 30 minutes free of charge. In my experience most lawyers will do this for the simple reason that the reason for the meeting is to see if he/she can help you and if you want this particular individuals help.

I wonder if you have explored other options. With a good credit history and rating you would most likely be able to reduce both interest and payments on some credit card accounts. I received an offer in the mail this week for an account that would add no interest to balances transferred from other accounts as long as payments were kept current. Miss one payment and interest begins. My husband did that combining more than one balance and transferring them to this type of account.

Call with the student loan office and ask about payments. You do need to know how much they will be before you make any decision. THey may also work with you. It seems like my daughter didn't have to start paying on her student loans right away. I don't know for sure.

I do wonder why you need two cars since you're not working outside the home. I do understand that you may need the car to run errands, keep appointments, etc. If you live near a bus line your husband could take the bus. Or he could car pool. Or you could do errends after he gets home and take him to work on days you have appointments to keep.

Someone with a good credit rating is unlikely to have to file bankruptcy. You may need to make calls so that creditors can work with you. And most likely you'll need to reduce your spending. Even if you took bankruptcy you'll have to reduce spending.

Most of us cannot answer your question about when to buy a car because we do not know the legal process of bankruptcy requirements. Even when someone has gone thru bankruptcy their situation was different then yours will be.

Will spending the $3000 wipe out your savings? As a general rule, you need several months worth of wages kept in savings for emergencies. I've rarely done that and fortunately have not needed it. I had good health and dental insurance and no children as well as long term secure employment which reduced the possibility of not being able to take care of myself in an emergency.

Since your husband is starting a new job and the economy is not secure at this time, I highly recommend that you keep that money in a savings account.

A comment about preschool. Have you considered home schooling? You can purchase a curriculum as well as join a group of other home schooling mothers. Your daughter can learn social skill with the other kids in the group. And you can arrange play dates with families you know.

C. - My husband and I have thought about bankrupcy a couple of times. So, you are NOT alone!
Here's my two cents, take it or leave it.
1. Do everything in your power not to file bankrupcy!
2. You can buy a cheap car for $3,000 instead of buying an SUV (which is used also, since it's a 2002). You will own it outright, so you can't loose it! We have a used toyota camry, 1992, and that thing runs great!
3. You do not have to put your daughter in preschool. BUT, if you do there are a lot of programs out there that offer scholorships. My sister-in-law had my niece at a preschool for free! If you don't mind a church preschool I would look into that. You can also call DSHS and find out if there is a program through them for preschools (I tihnk the edmonds school district also has some program, I didn't look to see where you were from)
4. I too am a stay at home mom, BUT I have a full time job. I work as a nanny for a family and made about $14,000 last year. It's not much but it helps IMMENSELY! Try and see if you could nanny or babysit. You could also work nights...restaurant, cleaning offices, fast food, babysitting...there are lots of things that you can do and still be home with your kids.
5. Cut coupons, don't go out to dinner (or cut the amount of times you go out to dinner. OH and use coupons when you go out!), Everett children's museum has a free night once a month, find cheap or free things to do with your kids. Cut out things that you don't need (ie. cable with all the channels, cell phones, beer, smokes, anything else that you can live without)
Just some ideas. You may also want to speak with your student loans and mortgage companies to see if there is a way to lower your payments, at least for a set time. Also, I don't know if there are bankrupcy councelors, but that may be something you could look into as well. They may have some secrets so that you don't have to file chapter 7.
Good Luck, I know this must be so hard for you and your family.
L.

Hi C.,
I know exactly where your coming from. Our BR was a bit different though. We filed mostly on medical bills from my husbands open heart surgeries. Luckily we did not own our house...I'm not sure if you'll be able to save it or not. We did though lose my car, a 2003 Ford Taurus and now have a non-drivable 1978 Toyota pickup. It really sucks. Have you contacted an attorney yet? I can recommend a good one. He'll even split his fee into 2 months payments. I did find out some info though on the myths of filing BR on back taxes.
I thought I would add...anyone that files BR now HAS to take a silly pre and post course through a consumer credit counseling service, in which the pre course cost (in addition to the BR) was $85 (which got waived for us because I threw a fit about the $1200 for the BR and now this!) and the post course was another $15. Absolutely rediculous! And to top it off....it is said that the CCS is the one that determines "which" chapter you will be filing. Ha! We already had that determined with our attny. before we took the class.
I hope this is of help.
Jennie

We recently (last month)filed bankruptcy. I can tell you student loans are not includable in the filing. You can very easily keep your house and vehicles. If you have been paying on them on time and are not behind at all, you just request to exempt them from the motion. I think if you finance another vehicle within a year of filing bankruptcy the bank will try to repossess it unless you can sign an agreement promising to continue payments on it. Any Bankruptcy Attorney worth your time will provide a free initial consultation free of charge. We have always been responsible people too, but sometimes life has a way of getting ahead of you.

Excuse my bluntness, but I will ask a few simple questions:

If you are a stay at home mom, why do you need a second car?
You can take your husband to work, and come back home, or he can take the bus. Schedule shopping for the weekends. My mother did it for years.

If money is really tight do you need preschool? I know that is a shocking question, but I ask it for your consideration. Bankruptcy means you have don't have money for anything but the basics house, food, utilities.

You will also begin learning a whole new way of shopping for food and clothes that you probably haven't even thought of.

You need to become familiar with thrift stores in your area. They are absolutely wonderful for kids clothes, because kids grow so fast and don't wear their clothes out. Most of the clothes (under size 4) are priced around here (Renton) are 99 cents. Very cool. Adult clothes are priced higher.

Start cooking from "scratch" from now on, and buy only from the outside rows-fresh fruits, veggies, meats (if you can afford them), pasta (a lot of it), eggs, beans, etc. Forget prepared foods, mixes, take out, restaurants.

I hope that my bluntness has not too depressing for consideration. I have only meant to give you some ideas to consideration.

I wish you the best.

There are certain protections for your home under bankruptcy law and provisions that allow you can affirm debts (agree to keep paying them) and keep the asset. You should see an attorney who can advise you fully on these issues. Many attorneys will do a free consultation or will apply the consult fee to your bill for their services.

I do understand a reduction in income and then adding an increase in expenses, but filing for Chapter 7 because of a decrease in income when you have been faithful to your debt seems like you are throwing in the towel. You say that it is a 10k paycut. You don't say how much he is actually making. I would definitely say that the difference between making $30k and then going to $20k is much more devastating than going from making $60k to making $50k.

Since you own a home, can you get a second mortgage or a line of equity? If your credit is great, try to get a loan and use that money for the purpose of paying the monthly mortgage, after cutting back on other expenses, of course. Assume that his paycut is temporary, since many places give a raise after 6 to 12 months anyway. While it may be disturbing to cut back, consider the impact of not having your home to grow for you (your equity is worth every penny you are putting into your home).

Really take a look at all of your expenses and see where you can cut corners. If you are always paying the balance in full on credit cards, then cut back on the expenses, thereby saving each month for the student loans. Also, if you have $3K, why would you use it for a second car if you don't think you could afford the monthly payments on his loans as it is?

Make a spreadsheet. Look at his projected income and list all of your expenses and see what you can do if you determine the minimum vs what you actually pay. I don't recommend only paying the minimum on any balance, but sometimes it's necessary. You might be surprised at what you can do to cut back if you write down what you are spending your money on. You don't strike me as a $4 latte kind of person, but you might be shocked when you learn where some of your money is going (maybe your hubby is a $4 latte guy...he can quit that and drink coffee from home). Disposable income is the money after all bills are paid. If you are dilligent, you will discover that you have more than you think.

I don't agree with preschool as being an unnecessary expense. I think it is vital to a child's development to interact with other children in an organized setting, since I have seen many kindergarteners who don't have the first clue how to behave because preschool was seen as unneccessary. It is very disruptive to the class and seems like a waste of tax dollars when the teachers are having to play referee instead of educator. Education is always important. Find a way to get her into some form of preschool program if your current on isn't going to work out. Look into scholarships, try MOPS, buy a membership to a children's museum (much cheaper than preschool).

As far as his school loans go, they are at a low interest rate anyway, so you need to look into all the new chatter regarding these loans. You may qualify for a deferment or a reduction in the payments due to a financial hardship.

Ultimately, take a good look at things and then contact a professional (examples: lawyer, credit counselor, bankruptcy advocate) to see what they can do for you. Consumer Credit Counseling Services is a not-for-profit agency who can help you in a lot of ways. Avoid any bankruptcy if you can and focus on the long-term picture. You can do it if you are dedicated enough. Best of luck to you!

I personally would try to find something that I could buy outright for the $3000 and try to avoid more payments being added on to the monthly bills. Keep it as simple as you can. You'd be surprised how far $100 can go toward the household! Also, I would think about finding a part time job during hubby's off time to help suppliment the income loss... that way you're not adding child care costs to the mix. I have paid about $150/week PER CHILD for child care. My hubby's hours are not steady, so it's hard to work out a scheduled time that I can be gone all the time. That's why I'm not working out of the home yet, but I will be this fall. Student loans will work with you as long as you talk to them upfront and the paperwork is simple.

Cut out all unnecessary expenses:
-I don't get my nails done anymore and I go to a local Beauty School to get my hair done at a fraction of the price. Wednesdays are $3.50 haircut days.
-I sell AVON, so I get my cosmetics, fragrances and personal care products for everyone in my home at a discounted price... even from the sales prices. It's not a lot of income for the level that I'm working it, but I can sometimes make an extra $50-$100/month without much effort.
-For groceries, I shop at Discount Foods first, then hit the dollar and grocery stores with coupons for the rest. We have a deep freeze so we can stock up on meat and bread when it's a really good deal. My friend's husband is a meat cutter at a local grocery store and so he lets us know when there is a REALLY good price coming up on meats that we love.
-I also do a lot of crock pot & bulk cooking and freezing pre-made meals. I have a family of six and sometimes it's hard to cook on demand. I'll cook a double dinner and freeze half of it so we have it on hand in the near future. Helps us avoid that "It's 6pm and there's no dinner... call for take out." trap.
-The other thing we do is make our own laundry soap. One batch makes 10 gallons of laundry soap... about 3 months worth of soap for our family... for about $3. Each gallon is equal to 2 bottles of laundry soap at $7 (I'm being optomistic) per half gallon for the cheap stuff. When you look at the cost of buying soap, that works out to about a savings of $137 that can go to other grocery needs, bills, whatever. We just keep ours in used/washed out milk bottles.
-My best friend's middle son is outgrowing his clothes as my youngest grows into them. She gives them to me and then I give them back for her youngest son as my son grows out of them along with whatever else we pick up at the thrift store.
-Thrift stores, garage sales, and CraigsList are great ways to find bargains for things needed around the house. They also have free listings and sometimes you can find great stuff just because someone doesn't want it lying around anymore.
-Do you have a cell phone and a home phone?? Why? Your kids are young and won't be left home alone, stick with the cell phone. (I think it's important because if you are out and about with the kids and there is an emergency, you need to be able to call someone.) Chances are that if you have to leave them with a sitter, the sitter has a cell.
-My husband is struggling with quitting smoking. He's down to half a pack a day now. His cigarrettes are costing us $7/pack now. At a pack a day (his habit for the past 20 years) that's $350/month! He's tried almost everything, but he is still determined.
-Do you have a gym membership? Go for hikes with the kids instead. It's more fun anyway.
-Instead of paying for trash pick up, make a compost pile in your back yard and take your garbage and recycle to a transfer station monthly. Most times you can drop off recycle for free and you'd be surprised how inexpensive garbage is when you eliminate food/yard waste and recycle from the overall weight of a load.
-Cut up your credit cards. We did and it's so much easier and we feel so much better paying cash for what we use.
-Avoid coffee stands. I took myself off caffine 3 years ago and save $5-$10/day... that's up to $3,650/year. If you still need the caffine like my hubby does, drip coffee will give you your buzz at a fraction of the cost. We have a half pot maker so we don't waste what we don't use. I think we got it at a thrift store... lol.

I would not sell the house right now, but would work on getting it refied at a lower rate. Now is a great time. Also, did you know that if you own your car outright, you don't have to pay as much insurance on it? There's not as much coverage, but it does cost less. Depending on your driving record/history, it might be more cost effective. If you haven't been in any accidents and don't get tickets, you may want to look into that too. You can save a lot of money monthly that way.

These are just a few suggestions that work for us and may work for you. My husband was unemployed for four months and took a big pay cut at his new job. We are now looking at the cost of insurance that is going to hit his paycheck in about 6 weeks. Things are tight for so many of us. Be thankful that your credit hasn't taken a huge hit yet and don't file bankruptcy unless it is the absolute last resort. Be thankful also that he was able to work and seek his education with you at home full time. As he gets back into position to support your family, do what you can where you can to cut costs and adjust your lifestyle to accomodate your new income. Sometimes it's just as simple as implementing one change at a time, selling what you don't need... whatever. Make your time, space and money count.

Keep your chin up. It will get better. I'll be thinking of you!

another poster said something about preschool not being necessary because they do all the same things there that you do with your child at home...i am going to disagree. my daughter asked me to stay with her at her preschool today (they celebrated her birthday there today) and i can safely say that preschool is MUCH different than having your child at home. they learn so many things that they aren't going to learn at home with a little brother, or out in public with strangers. my advice: find a co-op preschool where you can pay by donating hours to the school. if there isn't one in your area, check through your park and rec district. we are paying $115 a month for preschool for my daughter, and next year in 4 year old preschool we'll pay $135. i can honestly say the program is fantastic, and my daughter has grown so much in the last 6 months that she's been in school. i wouldn't trade the experience for anything in the world.
the rest of this isn't going to be pretty.
use the $3000 to pay on your current car. you will save yourself a good chunk on interest. do not buy a second car. if you do buy a second car, buy a crappy one that the parent not needing to take the kids anywhere will drive. if that's hard to swallow, remember that this is temporary, and once things look up (and they will look up) you can go out and buy a better car.
you might be better off to sell the house, even if you take a loss on it, because renting can be considerably cheaper than owning once you factor in property taxes, repairs, water and garbage bills, etc. i don't know what the renting prospects are out in st. helens but here in newberg you can find a decent 2 bedroom duplex for $750-900/month. if that's less than you are currently paying on your house payment (and considering some of the house payments my friends have on $140,000 loans with low interest rates, i'm going to say it probably is) then perhaps it isn't a bad idea to contact your realtor.
no one ever thinks they will be in this boat. it's not something anyone plans for, and it's certainly nothing to be ashamed of.
if renting is incredibly unpalatable to you, then talk to your bank about refinancing. it's worth a try, at the very least.
try to avoid, at all costs, going through a bankruptcy. cut up your credit cards, start shopping coupons and buying in bulk, search the web for frugality tips, find cheap recipes on hillbillyhousewife.com, walk everywhere, hang your clothes out to dry when it's nice, be willing to give up your current lifestyle and creature comforts for dollar store shopping and goodwill scouring, etc. find every place you can to cut corners, because filing bankruptcy isn't an easy way out. it's expensive, it emotionally costly, and you will be punished for it for the next 7 years.
also. consider getting a part time job. yes, it is incredibly beneficial for your kids to have your mom home all the time BUT. the extra $12,000 a year can be pretty beneficial to them as well. find something in home, like babysitting. find something in the evenings for when your hubby isn't working so you don't have to pay child care costs. check the classifieds, see if there's anyone looking for some help with housework. the extra money you bring in can mean the difference between keeping your home and living in your parent's basement until your credit clears up enough that someone will rent to you (because yes, if you have bad credit you will have a hard time finding someone who will rent to you). it will be incredibly stressful but it will be incredibly temporary.
this too shall pass. good luck with your situation.

We had to file a Chapter 7 about 12 years ago. We were able to not add the cars to the bankruptcy and keep them. I don't know if you would be able financially keep your house or cars not adding them in.

Hope this helps a little!

K.

You can defer student loan repayment (from the Gov't) for a year, and can also get "hardship" payments which are significantly less. Talk to your lender. When we consolidated mine, the interest rate went down to about 3%. There are options.

I myself have never had to file bankruptcy, but my sister did and she only filed on her house because she wanted to. And she kept her car as well, but could only keep one that still had a balance. If your credit is really so good, I would look into other options before chapter 7. I have never bought a house before, is it too soon for you to try to refinance? rates are quite a bit lower than a year ago. How close are you to paying off your car? You may be able to refinance that as well to lower the payments or trade it in for a cheaper car with smaller payments, if your current payoff balance is low enough, a lot of car lots will cover the balance. My friend just traded in her car that was damn near broke down, and she still owed $2000 on it, but they covered the balance and gave her $1000 extra as a trade in. Also there are a lot of preschools that you can get your daughter into for free or discounted, you just need to talk to the school about financial assistance and explain your situation to them. If worse comes to worse, you could wait until kindergarten to put your daughter into school and do the preschool teaching yourself with whatever free time you can manage to pull aside. It will be tough, but her waiting one more year will not be nearly as hard as crushing your credit and losing your car. It will take several years for you to get your credit back to normal and with chaper 7, you really won't even have the opportunity to start doing so for a good 4 or 5 years at least. I don't know what the options are for paying off student loans, but maybe you could try to negotiate with them on interest or stretch the payments a bit until things are more stable. Find things to cut back on at home to save money. Cable, internet, cell phone maybe, theres always areas to save and it will be hard but its easier then the road you are on now. Good luck, I know its really tough right now.

First of all, eliminate all unnecessary expenses. That includes and probably starts with preschool. There is no reason your child has to go to preschool! You can set up play dates and spend time teaching at home. Second, chances are that a second car is more a luxury than a necessity. Is there any way at all that you can drive hubby to work? If not, and you must have a second car, then there is no reason why you can't buy an older smaller car with good gas mileage and pay for it all in cash... the $3000 you said you have. You just need something that can get you to the doctor. You can do all of your other trips in hubby's good car after work. Next, you can save money by cutting things out of your cell phone plan, turn the heat down a degree or two and wear sweaters. Cut out all fast food and unnecessary entertainment. Learn to spend time reading together, playing games, and going for walks together. Cancel movie memberships, gym memberships, etc. You can probably save a lot by cutting back on your cable plan. Shop goodwill. It is important to do everything you can to not have to claim bankruptcy.

C., you've had some great feedback. Let me try to encourage you. I don't know how much your husband is making, but we don't make a lot. My husband works and I stay home. We have 5 kids and have a van only because we need one. With only two kids, you don't need an SUV. We drove a two door Honda Accord until we were expecting our third child. We only have one vehicle. I have the van to take older kids to school and my husband has been taking the bus/MAX to work. We have never financed a vehicle and don't plan to. We have internet now, but we haven't always. There are so many ways to "save" money. Don't buy things you can't afford. So many things that people go into debt for are NOT neccesities. It's great that you two have been responsible with paying your bills on time. But I wouldn't even consider bankruptcy, especially when you are still planning on spending. Which is more important? Being faithful to those you borrowed from? Or having the things you want? Like a nicer and bigger vehicle than you actually need or can afford? Paying for preschool when you can't pay your bills is not being responsible. Even having two vehicles may be more of a want than a need.
I don't mean to sound judgemental, hopefully something here helps. We all should be living within our means, that's not always easy. I know.

Well I would have to start by asking why do you have to file bankruptcy? If everything is totally fine as of right now, it seems strange that you know you will have to file chapter 7. I remember when my husband and I were starting out and we had some really hard times. However, we made some interesting choices and sacrifices early in the game that set us up to be really doing great ten years later.

I think that I would start by elminating as much of the extras right now as possible. I am talking about getting rid of cable, any monthly expenses that aren't directly related to survival, cutting out eating at restraunts of any kind, and no more starbucks. Make sure you are turning off lights when you leave the room and turn down the thermostat. We lived for two years with only one car. Believe me that you just have to be more creative, it isn't a requirement of life to have two cars. I live way up in the mountains, with nobody around for thousands of acres, and I didn't have a car many days in a row. You get used to it, plus if you can't go anywhere then you can't spend money.

I would also highly recommend that you keep your little girl at home instead of sending her to preschool. Preschool isn't required, and they don't do anything that you can't provide her at home. I am a bit biased because I homeschool four boys, but I just don't see the need to spend the money. She will benefit more from a stable home than two or three hours a day of preschool.

When we were totally broke, I just sent people what I could afford, refused to be bullied by collectors, and tried to make my house payment the priority. I also got rid of ALL my credit cards more than ten years ago. We closed the accounts, made payments, and we never looked back.

When we are overwhelmed it is hard to be creative. I bet that if you get a chance to relax, you can find a lot of things that might help. Most people are able to make changes (albeit uncomfortable ones) that can really help them achieve their goals. I wish you the best of luck.

Sincerely,
N.

Hi C.,

Sorry to hear things are tough, I can totally relate because we have been throwing around the idea of having to file bankruptcy this past year too. Have you ever heard of Dave Ramsey? He has a free show on Fox Business News Network at 5pm and 9pm, or go to his website daveramsey.com. This guy gives great financial advice.

Let me warn you that I am not an expert in this field, this is just some information I have gathered along the way, so investigate it all yourself.

If you file bankruptcy it will not wipe out student loans, you will still owe 100% of them. In a Chapter 7 you can keep up to somewhere around $2500 equity per vehicle, or if you had 2 cars you could give one up and keep a $5000 one. I would advise you not to get this new vehicle. If you need a new car go buy one for an amount you can afford (ie how much cash you have on hand) for $2000-$3000. Look for something that runs good even if it looks like ****. Remember this car is temporary, to help you get back on your feet, then you can get a better one a few years from now. Do you have any other car payments? If so, sell that car ASAP and do the above.

Check your area for free preschools (Head Start is one where I live) or preschools/daycares that have a toddler class too and would let you volunteer for all or part of tuition.

You didn't say what your husband does or did - how is he taking a $10k pay cut if he has been in school? Can he keep the job he had? If not I'd take the new job and keep looking for an even better one. Can he take on any side jobs?

What can you do to earn extra money? Get a paper route? Work at a store (that gives you a discount on things you need like food or clothes) on the weekend? I always found waitressing to be pretty good money - maybe you could do that 2 evenings a week or something else part time to help out. What about watching someone elses kids, or cleaning houses during a time when your husband (or other family member) could watch the kids.

You also didn't provide very much information about your house and house payment. Dave Ramsey says your house payment should be 25% of your take home income. If it is a little more I wouldn't freak out, but if you are spending half of your income on the house payment you might want to consider selling it (or doing a short sale if values have fallen) and renting for a few years. Or not, but consider it in the whole picture.

Where else can you cut corners? Do you have a bread store in town - they are cheaper than the grocery store. Buy generic brands, a lot of them are just as good and you will figure out which ones are and arn't. Shop yard sales and second hand stores for clothes and toys, you can get name brand stuff in almost new condition for much cheaper. Do any of you have prescriptions you need filled? Check the paper for coupons, I have found $20-$25 gift card coupons at places like Walgreens, Rite-Aide and Safeway. Banks also run promotions - open a new account and get $100 free, check into these. Have a yard sale.

The most important thing is to sit down and make a budget each month, map out how you will spend every dollar before you get it. Obviously housing, food, transportation, clothing, are most important, but if you can budget in some "fun" money you should, even if it is $10 to go blow on espresso or makeup or something little.

I hope this helps, I'm sorry you are going through a rough time right now, but trust me, you are not alone!

Before you do anything my best advice would be to find Dave Ramsey. He has a daily radio show, a website, and books- "Financial Peace". I am sure your local library would have a copy. Bankruptcy may not be your only option. His advice is wonderful- straightforward and honest. You may have to make lifestyle changes for a while, but it can be done- the website has many personal stories of how real people have turned things around and bettered thier situation. Our family is working on the plan - and we can see light at the end of the tunnel-

First of all, have you guys looked into debt consolidation? This may be the best option.You can keep your vehicles and house and it wont mess up your credit so bad. But it may be wise to try to sell the one vehicle you are thikning of replacing and get the SUV you mentioned.
Your best bet is try to get a free conultation with a bankruptcy lawyer and discuss your options. I believe there is a way to save your house especially if you current on payments,and you can show the court that 2 cars are a must.

Could you move out of your house and rent it for your mortgage amount or more each month and then find someplace significantly cheaper to live? And, if you did that, could it be close to your husbands work so you could share a car or he could walk/ride bike to work? Could you offer to volunteer (or volunteer more if its a coop) at the preschool to get that fee paid or significantly reduced? Or just skip it if you can't afford it. Those are just ideas before you go to the extreme of filing bankruptcy. You are very young and his income will likely go up significantly in the next 5-7 years... I don't know much about bankruptcy but your access to credit is going to change dramatically or at least be very costly so I would try to avoid.

First of all please don't take any of this as being harsh I am not trying to be just giving my opinions.

To be honest with you; I know owning a home is a dream come true, But you will loose far less money in the long run selling your house even if it is less then what you paid for it and starting fresh that way. 7 YEARS you will have that bankruptcy on your record that is 7 years of bad credit and off the wall payments.

Are you going to work is they why you are putting your child into preschool if not preschool is not needed if she gets quality time with you. Waste of 150 since they do the same stuff with her as you do at home. They're usually lots of places you can take your child that is free that is similarly set up (like preschools)

As far as vehicles go...you don't haft to have 2 with have survived the last three years on just one. if you have to buy a new vehicle get a $3000 honda or similar with great gas millage. Skip the SUV gas guzzler. Waste of money! Most of the hondas last well into the 200K for mileage!

Being a fellow 25 year old married to her high school sweetheart with two kids girl 4 and boy 2! don't ruin your life keeping your "dream home" just go back to renting and keep the good credit! There is absolutely NO REASON to own a home other then to make money and that is not what you are doing right now.

They are not joking around when they say those 3 little numbers mean a whole lot! It really does.

Talk with a financial adviser and DON'T pay for one. If you go to church ask around if any does it for a living...if you don't go to church ask around at a few local churches; odds are you will find someone and they would probably be more then willing to give you some good pointers on how to handle the situation.

Oh have you consolidated all student loans? That's another step.

But please, please reconsider filing a chapter 7 and reevaluation whether or not keeping the house is that important, you can always try again in a few years. The average person doesn't buy their first home until age 32 (roughly) you have plenty of years to work up enough money to buy a home that you can afford and relax and enjoy!

I know this is not what you want to hear :(

I have to agree, it's tough times for everyone!
You should talk to a financial advisor or a bankruptcy lawyer, or if you can get an appoinment with a not-for-profit credit counselor - that you be my first pick!
I know as much: if you do default on your current car loan most credit institutions will default you on ALL of your credit, that will likely include your new car as well, your rates will shoot up into the 30% range and your credit card companies will likely ask for payment of your entire balance in full. So speak to a professional before you do anything.
Anyways, I think you are going to be in luck, this is also a time where people who have made some bad financial decisions are going to receive a lot of help. So cross your fingers and hope it comes soon enough for you.

Just IMO, the RIGHT THING to do would be to get rid of ANYTHING that you can't afford. You obviously live above your means and the right thing would be to downsize your lifestyle to what you can afford. Get rid of the second car and exchange the first one for a smaller, cheaper model, make it work with one car(seriously, i doubt that you NEED it, it may be convenient, but you could probably make do without it), get rid of cable, cell phones etc - anything that is not a necessity for life... you can easily save a few hundred dollars by doing this and may just be able to avoid bankruptcy and keep your house.
You should also look into how much money it would bring in if you were to return to work, you'll have to weigh child care expenses and possibly really NEEDING a second car against your income.
But this is probably what your grandma is telling you - and it is the hard way.

Pay cash for a $3000 car, do not take out a loan. I think it would be foolish to take out a loan in your current situation. My household had taken a 30% paycut this year but are making do and actually saving more than we were before. We just bought a $900 Honda Prelude and spent $400 fixing it up in the off chance that I lose my company car (2007 Mariner Hybrid.) If we go on a long drive we take my husbands car which is a 99 but a little more reliable and comfortable. You shouldn't have much trouble finding a decent used car for $3000.

C.,

Before you buy that second car, check out what Volunteers of America has on their lots. I saw this on the news the other week, but they have a full lot of cars that are decent quality for fairly cheap.

Here's two links that might help you:
http://www.nwcenter.org/How-Vehicles.asp
http://www.voacars.com/

Good luck,
Melissa

I have no experience with this sort of thing EXCEPT to say that you must contact your student loan because they can offer several types of forbearances, including one for financial hardship. They have helped me on more than one occasion in the past. It's a really simple form to fill out. You may need to file financial papers proving your case, though. But it's not hard and it will take a load off your plate. Go for it! What do you have to lose?

Best of luck to you, I will say a prayer on your behalf. Your luxuries are your family - they are priceless! So go give them a hug and kiss, and enjoy their company.

If chapter 7 will stave off creditors it will help also if and when you file if you keep making payments you can keep things. Talk to credit counseling servicer they might help you consolidate credit card payments. If the money is that tight keep child out of pre-school, also plan things so husband can watch kids while you go shopping if dr appointments take hubby to work lots survive with one car and there can be forbearances with student loans but to my knowledge can't do bankrupcy
good luck
Paula

We bought(financed) a car less than a year after our bankruptcy, then a truck, and then a house. Things do work out, things do get better. Learn to live within what you have. It's an adjustment and I know you will be OK and handle it all in stride.

I didn't have a chance to read your other responses, so if this is a repeat, I'm sorry.
My sister just filed bankruptcy and she said if we did it (which we have no plans to) you get to keep your house and your car (she kept her car which she still owes about 1 year of payments on). Student loans are not included in a bankruptcy either.
My suggestion, which I realize you are not asking for, is to look into getting your loan modified or sell your house, trade in your vehicle for something you can afford, lower cell phone plans, cable, internet, etc. Get down to basics. When/if you choose to file bankruptcy they will mostly take care of credit card debt and any other loans (not your vehicle if you’re planning to keep it). Also, if you choose to buy a car you may have to wait a year to file. My sisters lawyer said (in a round about way) you will not be able to file if you have any "spending spree" type purchases within the last year. It will look like you're trying to spend a lot then not pay it.
Just my 2 cents. Best of luck, I know your feeling...I will be unemployed by the end of July.

I've looked through all the advice - the only thing I have to offer other that what has already been stated is this - WATCH OUT - for the Consumer Credit Counseling Services. There is a lot they do, that you can do yourself, such as calling creditors, telling them what shape you are in and asking them how they can help you in these tough times. The reputable ones make you cut up your credit cards so you don't use ANY, and work with your creditors to be able to manage your monthly payments. Again, most of this you can do yourself, then you don't have the extra fees, or wondering if that service is really paying your creditors like it said, or pocketing the $$.

The problem with Credit Counseling Services is they take their fee off the top, and they also downgrade your credit, and some of them are downright shady. Make sure you go with a reputable agency if you choose this route.

I believe there was something by Suzy Oreman on Oprah about Consumer Credit Counseling - you could look it up online.

Lots of people are in the same boat...you aren't alone by a long shot....
I have never had enough assets to even consider bankrupty. Its just my personality and not because of missed or lack of opportunities (I've always had a small apt with an old car with lots of $ in the bank). That being said, I've recently become a mom (she 10 months). And nice things interest me more. My $ has dissappeared because I am a sahm. I drive a '91 Pathfinder and my hubby who has been layed off since November drives a '92. I bought the car for $2000 and it has never given me problems. Its difficult when people with nicer things appear to judge me and my family but I know we are a solid and happy team with lots of love no matter what the condition of our things.
On the other side, I am close with recent immigrants and see that what I have is above and beyond what they are able to afford. It really puts things in perspective and I am thankful we do not have to share our home with another family, we each have our own bedroom, we have 2 cars, and health insurance for the baby.
This economic situation coupled with my exposure to immigrants has taught me that there are many things that I do not need. And when the $ starts coming back again it will be that much nicer when we can buy the extras.

There are SO many ways to reduce your monthly costs before going straight to losing your house! Oh my goodness... First of all, do you absolutely HAVE to put your child in preschool? When I was growing up, preschool was always an option, not a rule. Secondly, do you really need that second car? And if so, is it worth losing your home over? Do you have the internet, cable tv? Those are also optional. By the time you strip away the preschool, internet & cable, you should have saved enough money to make up for the $10k paycut. My parents lost their entire income for 2 years when I was in college and never lost their home. My brother went 4 months without a job and never lost their home. Just think of all the things you can go without... make some sacrifices and keep your house! You can do it!

Please let me know what you find out.

Serious, before you file bankruptcy, figure out your bare minimums and go to a credit counseling program first. Many of them can work with your debtors and work out the situation. Bankruptcy is with you for a very very long time and can affect even employement these days.
Preschool is not a necessity or a requirement for children. It is just a extra thing parents do these days. You can teach your child just as much by taking the time and doing the research.
Look into having your mortgage refinanced.
Can you sell your current cars and then buy less expensive ones?
The student loans don't come due until after graduation, but maybe you can start looking into programs now to help offset those too.
It is tough times and I truly feel for you on this. Just really really look deep and hard before doing bankruptcy.

In my humble opinion, I think you need to think bare minimum here, and get into survival mode. You could sell both your cars, and for this next phase of life just buy cheap 3,000 dollar cars where you will have no payments, and cut out every unnecessary thing. Move into an apartment. At least your husband has a job!! Check out Dave Ramsey's financial program/books called Financial Peace University, that will help you with this concept. And the preschool thing...you don't have to do preschool. If you don't work, then I would just teach your kiddos the alphabet at home and find a playgroup to be a part of for the social interaction. This is that kind of season for us, and we are also trying to survive! Take one day at a time, bankruptcy is not the only option! I help with a moms group at my church if you are interested, message me!

You SURELY are not alone, C.- and the best person to ask your excellent question is a bankrupcy attorney- you'll need one-- the cost of working with 'em will be rolled in --- take those great questions there - and blessings
( been there - did that - now use the shame I still feel as '''fuel ''' to help me be of service more and more - may be 64 but not done yet!)
Blessings,
J.- aka - Old Mom

You have a lot of great ideas and thoughtful feedback from others, so all I am going to say is you need to avoid bankruptcy. Don't even consider it as an option. The long-term impact on you and your family will be SIGNIFICANT. People are very uninformed about bankruptcy because it is complicated and because it is easy to see the short-term elimination of some (not all) debt without understanding and fully internalizing the longer term impact on your financial position, credit worthiness, future cost of credit/debt, even your ability to get a job or rent an apartment if it came to that. And don't underestimate its impact on your self-esteem as you learn first hand of all the hurdles your will face later. I urge you strongly to reconsider and to take bankruptcy out as an option.

There is some good advice here about the structure of student loan payments being negotiable, and that should be something done right away.

I'm not sure why you feel it's better for your family to declare bankruptcy, even though your husband is burning to candle at both ends (working, and educating himself to get a better career) to try to bring in enough money, than for you to get a job? There are daycares and preschools that will let your kids attend for free (or drastically reduced) tuition, and pay you on top of it. At least the extra money would help supplement while your husband's salary is low. Or you can work part-time and co-op daycare. The idea to sell Avon, Arbonne, or Mary Kay is a great one, especially because there are other moms you probably interact with, and can have parties with. Cosmetics are the last thing that women give up in a recession.

It will be very detrimental for years to the family to declare bankruptcy. If you insist on not working, I don't see why you are putting your child in preschool, if you obviously can't afford it. And you should not be thinking of buying an SUV, with poor gas mileage and expensive repairs, rather than going without a second car (don't see how a second one is really "needed" lots of families do with one). We have a 1984 Volvo that runs GREAT, gets good mileage, and rarely needs repairs, plus it's cheap to insure ($500/year). I paid $1800 for it.

There are two responsibility issues with bankruptcy: to your family, suffering the result of bad credit, and to society, who will be paying your debts for you. The millions of others filing are not necessarily coming from the same place that you are. Some have outrageous medical debts, or are in devasted economies such as Michigan.

There are financial counseling resources available for people facing bankruptcy. Check the City's official website. I hope you don't do this to your kids. My husband had financially irresponsible parents, and the kids suffered a lot growing up with that, and as adults have a hard time with healthy money management. His brother recently declared bankruptcy because his wife won't work, and now him and his family of 4 are living with his sister. Not fair or good for anyone.

Honey, don't give up the fight yet. There are still some real possibility's for you now and its great that you are being pro active for help before the crash...this has just saved you a whirlwind let me tell you. I would know as a single mother who started two businesses and bought my first home at 23 years old. I am now 28 going on 29 and have faced bankruptcy as a real possibility for the last 3 years. Good news is that due to some real help from third parties that work these things out for a living and some of my own leg work I am now completely living life good and finally at a point of prosperity.

Advice....

First of all please know that lenders always make room for settlements. This worked for my credit cards and second mortgage. It could work for student loans and you should ask them that up front. The trick is to hold the lenders off so you need to get a company such as Debt Settlement America who have the power of attorney to do that. They will be directed to contact DSA for all collections and can no longer bother you with threats or attempts of legally coming after your assets. They will ask you how much money you have and set up a way for you to save up every month with the money you would have used to pay off the bills. No matter how less of the original payment you would have made to the creditor put it into a savings account. DSA will them hold them off and try to at the time you have enough saved up settle the account for much.....much less than you owe (I got $20K credit card settlement after one year for $6k). I have held off creditors using this service for the last 3 years. This will give you some room with time and money to make sure you pay your car payment and child's pre-school. DSA will charge a $1200 amount but this can be paid with your monthly savings on a month to month basis, you will not need it upfront. The application looks a little big buts its not that bad and very well worth all the effort.

I also fell back on my mortgage and it sat in pending foreclosure for 1.5 years. For the first 6 months of that I was unable to pay, I then hired a company by the name of " National Homeowners Assistance Services" and for $1300.00 they kept negotiations going on although it took the lender some time to properly respond, it still held off foreclosure for another 12 months and by that time my luck changed and I was able to put $10k for a modification of my loan and save my home which is now for rent. You don't need this option yet but you can use it in the future. Before losing your home though I would recommend putting it up for rent and make some extra income why your family moves into something smaller until things get better. Your home could be a money making asset instead of losing it. Note: With the current economy no doubt there are some very new good rules to help with foreclosures due to the great work of the Obama's and support from the house and senate. At the very least you will be able to re structure your home loan for a lower payment :)

All of these tips should fix all your problems and work it all out. My very best to you and your family.

Love, Light and Blessings.....

I don't know anything about chapter 7, but my advice is similar to others. Your expression, "faithful to our debts" really struck me. It's more like you are in bondage to your debts. In tough times you learn to make sacrifices. Preschool, although very nice, is NOT a neccessity. Neither is having a second car. Look into biking, busses, carpooling-- or just having you stay at home while your husband is at work (I know it sounds tough-- but you do what you have to!) If you have 3K, you should be able to get caught up on some bills and get yourself a good start. Look into consolidating student loans at a low rate, or even rolling them into a refinance of your home.
Sorry if this sounds harsh, but my husband and I made it through vet school with 2 kids, one car, a house, and no debt except for school loans. Look into some other ways to save money as well. There are great blogs and websites to help-- like www.moneysavingmom.com.
I wish you the best!

Hi C.. I feel your pain. My husband has also just had a pay cut; plus we are both just finishing college. Our student loans will come due soon. We also have two kids. I cannot tell you what you should do, but I can tell you our plan. My husband and I sold our house (yes, it still happens sometimes!) and moved into a more affordable apartment. If that will not work for you, maybe try a refi? We also got rid of a car payment and bought a cheap used car. (We asked friends and family, and ended up with a car from an older woman who could no longer drive. It is in perfect condition. Small but definitely do-able for our family). Having just finished my student loan exit forms, I understand that if you miss even one payment, they can call the entire amount of the loan due or even garnish wages, so seriously consider making these a priority.

I know it's hard right now, but there are options. I plan on checking out Dave Ramsey as soon as I graduate (in May!) Talk to friends, talk to family, listen to your grandma. She may just have a few good pieces of advice. Good luck, I know you guys will do just fine :)

Try to refinance your house instead. Right now interest rates are at an all time low and I am sure you have at least some equity in your home. especially with your credit if its above 680 you wont have a problem at all getting a loan even if just to refinance at a lower rate to lower your mortgage. I am in the quick process of doing this myself as we have absolutely strapped ourselves with money we are having our car payed off all the credit cards paid off eliminating about two thousand dollars in monthly bills and only raising our mortgage payment 175 bucks. The current rate is 4.8% which is WAY lower than it has been in like 40 years. There is also an option of selling your house and buying a less expensive house. Declaring bankruptcy is going to ruin you for the next ten years. Do what you can to avoid this.

Hi Candace,

It sounds like you have time to plan. If hubby graduates in the fall, loan payments won't start immediately. Does he change jobs after graduation or now? If he changes later, you have lots of time to get things on track. If he's changing soon, you'll need to work quickly.

I agree with other posters that you should exhaust every possible outlet before filing bankruptcy. Look at it this way. Bankruptcy forces you to stop living on credit by tarnishing your credit report. It doesn't help you change the spending habits that produced all of the credit in the first place. And it doesn't just affect spending. Employers CAN LEGALLY use a credit check to determine the reliability of potential employees. A bankruptcy could cost you or hubby a future job.

You can learn to manage your finances in a way that is healthier for your family. Find a program called "Financial Peace University." It's frequently offered through churches. Check out a book from the library:

Total Money Makeover by Dave Ramsey.

Ramsey gives financial advice from the perspective of becoming a millionaire once, loosing it all and building it back up with a MUCH smarter outlook on debts--never having any. My husband and I are following his plan to become completely debt free and live on cash only for the rest of our lives! Knowing that it's possible is very liberating.

The book will advise what a few others have said...Cut your lifestyle dramatically. No vacations, no dining out, no new clothes for you and hubby. Only buy the necessities. Stay home and eat rice and beans. Buy an old, reliable, junker to drive with cash. Be honest with yourself. Do you really NEED everything you buy? Preschool is probably important, but an SUV (that is already 7 years old and you'll pay for for 5 more)? With two kiddos, your family could probably function into a little hatchback that won't cost you nearly as much to buy or maintain. You will have to live on a budget and know where every penny goes. It will be worth it!

Also, check with the US Dpt. of Education regarding hubby's student loans. https://www.dl.ed.gov. They do have a variety of plans for paying back loans, consolidating loans, and there is a "hardship forebearance" to delay payments if your family qualifies.

Through living on a tight budget, I've cut my weekly grocery bill by about $20 since we started. That gave us $100 more to throw into eliminating debts. My husband is selling a book and DVD collection as a seller on Amazon.com. It's bringing in extra money to help.

You can do it! Just get fired up to change your life!

Best of luck to you.

Save yourself a payment. Buying an SUV is a bad idea.
Take the 3K and by a Honda Accord or similar for only 3K. Good for gas.. SUV's are terrible on gas. You can find some terrific deals on Craigslist. People in your situation need the money and you can get a fantastic car. win win for both sides. I personally found a car on craigslist and it worked out great. In a couple of years when your back on your feet.. get the SUV.
Then turn your attention on the house.

Don't do it! If you're already in a stressful financial situation - you have to humble yourself & buy a car you can pay cash for - no financing, or it will only get worse. It may be a car you don't like, but just think of the stress it will lift if you have another $100 a month to pay towards your loans. You could also do preschool on your own, with a couple other moms, order stuff online from funshinepreschool.com & they send you EVERYTHING you need, craft supplies & all. We did that for our oldest son & it was amazing!