Sunday, March 18, 2012

"I think the world of you, and know that you are doing things right!"

Almost two months have gone by since my last blog post. Should I apologize or try to explain myself? No, I don't believe so. All I can manage to feel right now is immense gratitude for my blessings and everything that's happened since the beginning of the year. Let me share a few!

Business turnaround: everything fell apart right at the beginning of October last year. We fired an employee, lost a few clients, and everything generally went to pot. That was when our bank balance went all the way into the red, and then stayed there for the next three months. We paid over $2000 in overdraft fees last year. We did our best to recover, but the bank was totally unhelpful, and every time I caught up a little bit, another expense had to be paid. We ended the year with negative balances of a couple hundred dollars in all our accounts. However, as of the end of February, our business checking account had $900, business savings had $1400, and personal savings had $190 balances. Our new employee has been working out moderately well, all expenses are within budget, and the financial model we now use will always have a decent profit margin.

Debt progress: essentially, we have not made any debt or credit card payments since last June or July. During February, I called USAA, where I have my biggest credit card ($7000+ balance) and they offered me a great alternative to the $1000 payment that was officially due--make three consecutive payments of $166 (normal payment is $130), and they would re-age the account and delete the catch-up payment. This is important because I need to have at least one functioning credit card, and I really like USAA and want to maintain a good relationship with them.

Then a couple weeks ago, I finally bit the bullet and called another couple of my credit cards. Capital One threatened that I was going to be put in R9 status in 9 days unless I made a payment. I pleaded, wept, threatened, and did everything I could to be offered a similar deal to USAA's, to no avail. I even went through three separate supervisors, only to find that they had all misunderstood what I was talking about. So I finally told them I was going to take my $200 and see what Chase could do with it, because my money is too precious to waste it where it's not going to make a significant dent in my debt obligations.

At Chase, it turned out that my credit card account had already passed into collections, and the first option the rep came up with was actually a settlement for $1500 (original amount $2300). I debated with the rep about the relative virtues of paying the debt in full, and after an angst-ridden sideline discussion with Kit, I bit the bullet and decided to settle. I realize it will be on my credit for seven years, but it is a fast and legal way of getting out of debt at this point in my life. So I countered with an offer of $800. When they took it, I felt a little bad I hadn't offered less, but I'm just going to shut up and be happy with my 35%! We don't actually have $800 right now, but they are allowing me to make four payments over three months, which is totally doable.

The big thing I'm going to be able to resolve this month is to get totally caught up on state withholding taxes. It's a big chunk of cash, roughly $850, but we will be able to get it out of the way. Suddenly, everything seems doable. Even my student loan allowed me an emergency deferral, and on the application I wrote that I could resume payments in March, but somehow the deferral got set up until AUGUST. It was stressful to make the irreversible decision to settle our debts, but now that we have, all we can feel is relief. As soon as the big tax payment is made, I will call some of the other debtors and start knocking things out a couple hundred at a time, with whoever will settle. We will have good enough cash flow for that.

The sweetest thing came a week and a half ago, when I wrote to our friend, who lent us $15,000 last year, just before we were about to abandon our business in the States (physically, at least), and who has not bugged us at all about repayment, even though we contracted to start repayment in June 2011. We haven't sent him a single penny yet, but I wrote him an email to tell him things had turned around and we expected to start sending him payments soon. His reply: "Do not even sweat it! I think the world of you, and know that you are doing things right!"

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