So, I worked out a deal with citifinancial to give them $200 (I did this on Thursday this week, with a money order), and a $300 post dated check for Feb 15th, of next month.

The bastards cashed it on Friday, overdrawing my account.

I’m going down to their local office on friday to have a chat with the nice lady that I worked out this agreement with. Lord help me if I end up on the news for taking out a whole office with my screams (I’m just kidding of course, but I will give her a piece of my mind for sure)

Wellsfargo is gonna get a piece as well, for a cashing a check clearly dated for Feb 15th, 2007. Anyone know any rules on cashing post dated checks?

Frack this.

I'm 300K in debt. Gulp. I'm 24 and day traded away a fortune. Now I'm trying to crawl back to zero. Why not subscribe to my RSS feed and join me on this journey. You can also subscribe via e-mail. I appreciate tips and feedback! ~ DebtKid

No updates today on reducing any of my payments…I didn’t get around to calling Litton, and its too late in the day now.

Business Stuff

I had a great last 24 hours business wise. Our advertising packages are selling like hotcakes due to an article I sent out to a few contacts. I sold 7 packages today, and should have 10 before the day is out. I’ve got about 40 e-mails of interested people to follow up with the next few days, and that is only after contacting 1 of the 5 groups of contacts I have.

My Goal: 10 packages sold (and paid for) a day for the next 4 weeks.

If I can do this it will bring our service revenue up to around 10K a month. And I’ll survive…

But I’m tired. I spent a huge part of the day of the phones following up with leads, and I’m pooped and its only 6:20pm (I’ve been working till 8 at least each night).
I did have to go to CitiFinancial in the middle of the day to drop off the $200 I promised. I’m getting pretty low on cash at the moment, having paid alot out to creditors (in small amounts) this week. I have 2.2K coming in early next week from a old trading account, which will be well needed.

I have a $800 bill due monday for this months rent of my office. And payroll is Tuesday, I’ll need another $900 for that….

So I just need to sell!

Current ad packages sold: 40

Goal: 300 by March 1st

I had some time this afternoon to work on my payment reduction strategy.

Right now, I’m hating WellsFargo (my own bank of 8+ years), and loving Citibank. Let’s recap

The Ugly (WellsFargo and Chase)

I have 3 lines with Wells. A $500 limit student credit card, which I plan on keeping current, as the payments are low. A 25K personal line, and a 20K business line. I called today to find out if they offer any payment programs on my two lines of credit. Bottom line: nope.

Apprently my personal line needs at least 9 payments before they can consider “re-age”, which, I don’t even know what that means. I did learn no charge off til 120 days, I’m at about 45 at the moment. So I have some room there. My goal is just to stay away from collections at this point. So, I’m going to be doing about a 1/2 payment on the personal line, if I can do it.

The business lady was not helpful at all. She basically said, “in one week, this will go to the legal deparment”. Charge off is at 120 days. I paid a small payment of $285 (seems big now) today. Need to watch this one.

Chase

The Chase lady was no help at all. All her options were, “I would recommend making the min. payment”. Like a broken record that is all she could say. She did tell me that the next “cycle” (billing cycle) would be Feb 16th, and that options might be available then. Humph.

The Bad (WAMU and Citifinancial)

I have a 15K personal line at citifinacial and a 30K SBA line at WAMU. Both are less than 45 days late. Neither have any sort of payment plans available at the moment.

I told citifinancial I would bring $200 to their branch tomorrow and a post-dated check for $300 on Feb 15th. (I’m just trying to buy some breathing room here) So that takes care of them until March 1. It was more than I was hoping ($500), but the best I could get.

My WAMU payment was/is late as of today, so I now behind on it. I have 90 days on this before write off, so this account is getting put very low on the priority list. WAMU didn’t seem too concerned, could be because it is SBA backed and it they have to write it off, they don’t lose much (I think that is how it would work).

The Good (CitiBusiness)

I talked with a wonderfuly nice fellow from Texas in the collections department at citibusiness. We basically did the “how much can you pay on this” dance for a bit…I made a few jokes, we bonded, and he started just telling me what payments would get me down to the 0% level on their repayment program. So I got three of my citibusiness cards down to 0% for 12 months!!! Awesome! This was definetly the highlight of the day. I dropped my monthy minimums by over a thousand dollars by going into their repayment programs. Yes, my credit score is going to suck, but 0% for 12 months is an offer I cannot refuse at the moment! I’ll take it.

Other Creditors

Staples - learned that the rate (APR) is not negotiable until 60 days. I am current on this. No joy here.

Litton Loan (1st Mtg) - I found a good “hardship” phone #, but the dept. was closed by the time I called. That is my big goal for tomorrow, talking to Litton. My payment with them on my 1st Mortgage is around $2500 a month. I need to get that down to $1500 a month for a least a few months. I’m just trying to buy time at the moment without adding more debt to the pile.

So, my monthly payments are now down to $7,469. Still not to my goal of 5-6K. If I can shave off another $1500, that would be a big, big help. I was at around $9,100 to start the week off. So, $1600 in 3 days, not bad. Just gotta get that mortgage down for a few months…

My Business (income side)

Business future is looking good at the moment. We started a new advertising division back in Sept. I testing our concept for a few months, and it worked, so we are selling our services full time now. If I can devote myself to selling for 8 hours a day, I can sell about $300-$400 a day in MONTHLY subscriptions to our services. That is assuming I can keep up our leads coming in as well. As soon as I get all my debt arrangements worked out, I should be posting more and more about my business side of things to get my income up and over 10K a month.

I’m off to a pickup basketball game with my younger brother (he still doesn’t know about any of this…I’m planning on telling him next week). I’m exausted, but a good b-ball game will make everything better!

I figured I’d post a response to some of the insightful comments the past few days…

…Advice: take a really hard look at where you spending money (then stop it), get a part-time job (instead of going to the gym and writing a blog), use the part-time money to help pay off the loans… - amazed in austin

I have cut my spending dramatically, no more eating out, cancelling a few superfluous (ohh, smarty pants word!) programs, ect. As for the gym membership, it really helps me work and feel better to work out, so even it is $30/month, I use it quite regularly (it is only a block from my office), and net-net I think it helps overal more than hurts my present situation.

As for geting a part-time job. Not an option at this moment, unless I figure out a sweet way not to sleep! (then I could get a graveyard shift somewhere). I am already working 11-12 hour days at the office, not counting commute time (another 40 minutes total).

So� have you thought of putting your business on hold for a while and going out an getting a job? You are 23. You have PLENTY of time ahead of you to be self emplyed. - Chris in Boston

Running my business is the best option I have at this point. I also have 5 part-time employees (10-20 hours a week each) that I would have to fire. I have been running my own business since I was 20, and when it is going well, I do pretty well. Example: In March of last year we did over $13,500 in Gross Profit on $18,000 in revenue. Net/Net 9K to me that month if needed. So, if I can ramp up my business again to those levels, I might have a shot at avoiding BK. If someone were to offer my a $150K salary job right now…of course I would take it! But, I don’t see that very likely being 23 with a bachelor’s degree.

My question is how on earth did you get this far into the hole? Did you have a margin call? I mean even a bad trader would see warning signs and perhaps take action sooner than later. - Chris in Boston

I deluded myself into always thinking I could make it all back (classic addiction…right?). So, over a period of 3 years, it all added up and snowballed as I got more credit to cover expenses and such from the loses I was taking. It wasn’t fun, and I didn’t get a “rush” from trading, I did however for a long time think it was the only way I could get back to even. Dumb. I did have numerous margin calls trading stocks, options, and forex (currency).

Good question though, I mean really, who does this? I’m still trying to figure out why I let myself get into this sitution. From all outside appearances I have a successful small business, a half-million dollar house, and lots of friends, all at 23. If some people only knew the real sitation I’ve got myself into…

have you tried selling some things? I know it takes time to go through the process but Craigs List and eBay can be great resources for generating a little extra money. - Kim L.

I am working on this front. I have a box of things I need to put up on ebay/craigslist. I think this will be a weekend project at some point, because I do need the extra cash. Thanks for the tip Kim L.

get a part-time job (instead of going to the gym and writing a blog) - Amazed in Austin

Why write a blog about my experiences? Two main reasons:

1. Mostly for myself, writing helps me process things, and also keep progress of my goals, successes, and failures. I think writing is good for the soul.

2. Advice. Already I have gotten some great advice. And I need it. I cannot do this all on my own (to quote my father), and the wisdom of many can come up with better ideas than my little brain can.

Thanks to everyone so far for the helpful comments.

Keep them coming, and please subscribe! (I’m a very goal orientated #’s person…so it feels good to see any numbers in my life going up!)

All my sins…

It’s felt like a trifecta of pain today. After a full work day, I began getting on the phones again to deal with the creditors.

American Express (total balances: $2,783)

I have two AMEX cards. Lines of $500 and $2000. The balances are: $772 and $2011 respectively.

When I reached the CSR (customer service rep), I asked first about loweing the APR. “not possible”. Any hardship or forbearance programs available? “No”. “What can you pay?” “$25/month, I say”. She says that is fine. I was taken aback by this. I asked about the consequences of this, and her only answer was “higher finance charges”. She really didn’t seem to understand what I was trying to do, and while nice, not very helpful. So I paid $25 on each card and will have to come back to those in a week or two (both of the “current amount due” amounts were over $50).

Chase (total balance: $10,579)

What a mess. I calll around 6:20pm PST. I know that they close at 7pmPST, so I figure I have lots of time. I wait on hold, and wait, and wait, and wait.

30 minutes go by. I hang up.

I call back….”our offices are now closed (6:57pm), please call back…”

Grrrr. This is an important card for me to take care of. The balance is: $10,579, but I am quite behind and the amount due is nearly 2K. I have to get this payment down to at least $150/month

Citi (total balances: $26,407)

Another dissapointment. I was hoping to get my 4 citibusiness cards resolved today, but apprently my “new options” won’t be available til tomorrow. Bummer.

I spoke with my father for a good amount of time tonite. He is seeming a little more optomistic about my progress, and hasn’t called the lawyer yet…

Yet.

Emotions.

They are a good healthy thing. But sometimes they suck.

I did not realize the emotional impact all this debt was having on me, until I began dealing with it all last week. Having to tell my parents wiped me out for 2 days. Now, after a good 12 hour work day yesterday, I woke up this morning in the same spot…exhausted, even after a good 9 hours of sleep.

I need to go to the gym today, I think that will help me feel a bit better. I’ve been eating OK. It’s just alot to deal with at the moment. I have to:

1. negotiate all my debt down to at least 6K in payments
2. Bring my net income up to around 9K to cover those payments and business expenses
3. Tell my brothers about my issue sometime early next week
4. Start seeing a counselor as early as next month to deal with all this (parents orders)
5. continue to run my small business with 5 part-time employees and myself
6. try to have somewhat of a life

So, It’s just alot at the moment.

Whew. Just got off the phone after about an hour of calls to creditors. This was my first time ever calling someone and having to say, “I can’t make that payment”. It was tough.

Luckily, the two citicard reps I talked with were EXTREMELY helpful. Let’s review my first call about my 4 citibusiness cards:

CitiBusiness (4 cards, total balance: $26,407)

I have 4 citibusiness cards with balances of $7,747, $9,132, $4,619, and $4,909. My ‘current amount due’ is around $2500 in total. I don’t have that cash available at the moment.

I talked with a guy, explaining my situation, and we started throwing out numbers. He asked how much I could pay a month (on one card), I said, “$150″. He said the best they could do was $346 and drop (yes, drop) the interest rate to 25%. No joy there. That doesn’t work. He said I should look into a credit counciling service that would reduce the rate to 9.99% and I would pay around 1/45 of the balance. I have read so many bad stories of this…I am quite weary. Does anyone have a good story about a service that would deal with citibusiness? Thanks in advance.

The guy did however give me one great hint. I asked, “is there anyway to lower these apr’s, or amounts each month”. He said, “well, as time goes on, new options become available”. I of course asked, “well, in my case, what time will that be?”. “tomorrow” the guy says. Apparently there will be a “cycle” of some sorts, and I will have new (and better according to his unspoken hint) payment options. I hoping for a 0% hardship program like I got with…

Citi Personal MasterCard (balance: $3,598)
Yep. I talked with a very nice lady about their hardship program, after explaining my situation. I asked, “how do you calculate the payment” She said, “Well, we basically have to have a payment amount that allows for positive amortization, and that is how we base the interest rate”. That may sound like greek to alot of people, but I work in the mortgage industry, and to me that means, “the lowest payment amount will be a 0% interest rate. find the lowest amount you can pay, and that will set your interest rate at 0%”. So, I said I could pay $50/month. She said that would then give a 4% interest rate. Not bad.

But, why get 4% when you can get zero right? (I was assuming I could get 0%). So I say, “gosh, you know, I think I can only do $40/month”, she replies, “well, than your interest rate would be 1%”. She totally knows what I am doing at this point and just says, “look, $36/month will get you 0%”. Sweet! So, I signed up for their hardship program for 12 months at 0%. The payment comes directly from my checking account, and if you miss a month, you are booted! But this was a big upper that I needed today. I’m still nowhere near budget, but I have alot more calls to make tomorrow. It’s past 8pm now, and I’m still at the office.

I realize my once great (730+ when I was 22) credit score will now be shot (under 500 I imagine by the time I negotiate everything) for years. That is the price I have to pay, just to stay out of bankruptcy. Sad that it has come to this. I should have never gotten in this far…

Cancelling my XM radio was fun. Not.

I called last saturday to cancel and was told to, “call back in one hour because we are having a problem with our system and cannot cancel you at this time”. That sounded like bull, but whatever, I called back today.

After giving all my info to the first rep, I was transferred to the “deactivation department”. After explaining about 10 times why I was cancelling, the guy asked a whole wonderful script of qustions, “what is your favorite XM channel?” “what can we do to keep your business?” (my answer. cancel my account). “what if we offered you 3 months of service at a reduced, $4.99 rate?” (no, not interested). “what if we offer you two free months?” (interesting, but no).

Lesson? If you want 2 months of free XM radio, pretend you are going to cancel. It’s actually a pretty funny experience listening to the script the guy went through. It’s cancelled now. Another $15/month saved.

My student loans (except my $70/month federal one) are now out of the way for 6 months. I had two I needed to take care of today, loans at Sallie Mae, and at Citibank (www.studentloan.com).

Sallie Mae Forbearance Process

I called the 1-888-272-5543 number listed on the website, and also the number given when you click the “postpone payments” link on your account page. After a 4 minute travel through touchtone heaven I arrived speaking to “Katrina” (obviously not her real name…”Katrina” had an Indian accent, but not too bad). She verified some info, asked me why I was applying for forbearance, then gave me a direct number: 800-538-2632 and transfered my to that #. After a 20 minute wait, I talked with male customer service rep who was very helpful, asked the same questions, but actually had the authority to approve the forbearance. This CSR was definetly in the US somewhere. The problem?

A $150 FEE to apply for forbearance. Apparently the fee is $50/per loan. Well, I have three loans. After explain the riduculousness of a forbearance fee, I was told there is no way to get out of it. Crap. I though for a minute, and had to go forward with it, using my debit card to pay $150 of precious cash to this Sallie of the Mae’s. At least it is done. Don’t waste your time calling the general # if you are applying for forbearance, call the 800-538-2632 number. $150 my butt. And that is only for 6 months. My first payment is now due in July. I had to do this though, it pushed back a $500+ payment I was already late on. So, although it hurt 150 times more than I was expected, it was needed, and now done.

Citibank Student Loan Forbearance

I was expecting this process to be much more difficult than the Sallie Mae process. But after pressing “0″ to get to an service rep, I got a nice southern-accent speaking lady after only about 2 minutes. I had already sent in a form for this, and that is all they can do at Citibank. So, when they receive my form that I mailed today, they will approve the forbearance (so I am told) for 6 months, which can then be reapplied for in 6 months for a 12 month max. Oh yeah, no FEES. I was totally expecting a fee here after the Sallie Mae fiasco (maybe that is too strong a word).

So, Student loans are out of the way at the moment. Now onto the credit cards!