I am participating in the Saving Advice $100 Snowflake giveaway. The theme of today’s giveaway is “when there isn’t enough money at the end of the month.” This is an issue near to my heart because it was my life 3 years ago. I’m going to share a story that I’ve mentioned in comments, but never really described in full. It’s about a period of time when money was so tight that we were eating peanut butter and ramen noodles.
In 2009, I quit my job in NJ and moved 1800 miles to Colorado to get married. I thought I would get a job quickly, but soon realized that was just wishful thinking. Money was tight, but we were making it okay. Then things went from bad to worse when the credit union that had already repossessed my wife’s vehicle before we got married decided to garnish her wages to get the rest of the money owed.
The car loan
That was an incident that made me deeply distrustful of car dealerships and why we will never, ever do business with Public Service Credit Union again. Her Corolla died and she was looking for a replacement. This was back while I was still on the other side of the country. She got herself a used $17,000 Ford F150 after the used car salesman assured her that the payments would be $200 per month. That was the very upper end of what she could afford, and only because she had a roommate that paid her that much each month in rent.
Then came the first bill. It was $800! Looked at another way, the payment was roughly half of her monthly take-home pay at the time. Of course, she couldn’t afford that, especially not when another quarter of her income was used to pay debts accrued from moving out of her parents house. She never made a single payment and after several months, the credit union that issued the car loan repossessed the truck. They sold it at a public auction for the court costs. Which meant that my wife now had no vehicle but still owed the entire amount on it.
After that, there was no word from them until one day, without any warning, her wages started to get garnished at a rate of 25%!
Money is tight
In between the repossession and the garnishment, I moved out and we got married for $200. The roommate moved out and my brother moved in. Unlike me, he did get a job after about a month. But he lasted 2 days before he became the second person to get fired out of a work crew that started together. So total income was down compared to before I moved and expenses were up. We were just making do.
Then the garnishment happened. We were now well past tight. We applied for food stamps. Did you know that $12/hr is $25 per month over the maximum income for a family of three for food stamps?
My brother borrowed money to fly back to NJ. We looked into another roommate, but it turns out that November is a bad time to find roommates in this college town.
We decided to apply for bankruptcy. Only my wife applied; the rationale was that one of us would have credit available to us for the future. That turned out to have been a mistake. We were specifically looking at credit checks for rentals, but everyone out here runs checks on ALL occupants. We would have been better off including me on the bankruptcy and may not have needed to take either of the two medical loans we now have.
We talked to a lawyer about bankruptcy. That’s when we got our third piece of financial bad news in a month. It costs $700 to file for bankruptcy! I understand the need for making bankruptcy a decision not to be taken lightly. But it seems to me that it is odd to require such a large payment of people who are, by the very definition of the word, unable to pay.
Knowing that bankruptcy was going to have a much bigger impact on her credit score than missing payments, my wife stopped paying her debt payments. The garnishment was still happening, but at least we didn’t have to worry about making the rent payment. After we finished off all the food in the house, we turned to ramen noodles and peanut butter. We actually got to a point of spending only $10/week on food. By the time the bankruptcy paperwork was filed, I lost 10 pounds.
We canceled our cable and internet and turned to piggybacking off a neighbor’s unsecured WiFi. We didn’t buy anyone Christmas presents that year. I called up all of my creditors and started hardship periods that lowered my debt payments by $150.
It took us a month, but we finally came up with the cash for the bankruptcy filing.