I’ll keep this post updated with the most recent screen shot of the basic form of my debt spread sheet

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

The Housing Situation (good news)

So, I’ve mentioned that I am trying to short-sell my home (with its over 4K a month mortgage payment). It got an offer this week, and now it will be up to the 1st and 2nd Mortgage companies to decide to approve it or not. If it goes through (which, I hope they see is the best option for them…otherwise it will go to foreclosure), it will be a big relief for me, although not really financially, since I haven’t been able to make the payments on the house since Dec. anyway. But still, it will allow me to focus on my business, and the plans I have to work out the rest of the debt hole I’ve gotten myself into.

I’ve told the renters in my house (my roomates) that they have until early summer to get out. So, it looks like I will get maybe 2 more months of rent from them (much needed!). Whew.

(bad news)

The bad news here is that I need to find a new place to live in about 2 months. I’m not worrying to much about it now, as I’m focusing on continuing to build up my business income (which is around 7K at the moment a month). I will likely stay in my office for at least a few weeks, if not the entire summer. I know my friends will think I am crazy (especially since they don’t know what I am dealing with debt wise), but it will save me $500-$600 a month that I would spend to get a small place of my own. So, for at least a month it looks like I’ll be shacking up in the office.

The other bad news, is that before I shock the crap out of myself and really looked at how I was living (and losing money), I accumulated a whole bunch of crap. So, I’ve got all this stuff to get rid off. The upside here is that I can sell alot of the stuff (dvd’s, books, misc electronics, ect). I brought a 8GB MP3 player to one of those “we sell it for you on ebay” stores. I wanted to test how easy it was, before I start bring them carloads of stuff to sell. So far, it seems pretty easy.

Why not sell myself? I just don’t have the time right now to spare. At the moment, time is against me, and I only have so many things I can keep strait in my head. Between fielding creditors, trying to short-sell my house, growing a 4-employee small business, and trying to eat, I think having a drop off place sell my stuff will be good for me (even though they take 35%). Some of the bigger items I have I will put up on craigslist. Good news here is this will also raise some cash, that I desperately need.

The Debt Management Plan

So, I went to the consumer creditor place again and we got a DMP plan all set up. To get it rolling, I just need to send in the $960 that is the first payment. Yikes. We did a budget, and the plan will cover all my personal debts except for my small WellsFargo Credit Card. It does not cover my business debts at all. So, here will be the debt situation in about a week:

My whole life seems to be turning upside down these days.

• I will be living in my office (for at least a short time…maybe longer) in 2-3 months, assuming I can get my house sold
• I am no longer in the business I began 2 years ago, and though in the same market niche, am doing something I never imagined (but I do enjoy)
• 2 of my close friends are moving out of the state, leaving me looking for new friends (in all my spare time! right…)

I am meeting with the credit counsling place again today. We are going to get a debt management plan set up. This will be a good thing for me longer term. The only problem I have is that a good portion of my debt is under my business (though personally guarenteed by myself and my social security number). The lady was not sure if business debt could go in the DMP. I really doubt it.

The good news is that I already negotiated my 4 Citibusiness cards down to 0% for 12 months. The bad news is that I have 50K in 2 business loans with WAMU and Wells. WellsFargo closed my business account, and I told them I would be calling them this afternoon to figure something out (after I talk with the debt counseling agency).

So, at this point, with nothing to lose (my house is going, my friends leaving town, the girl I was interested in has a boyfriend now…) what am I?

Very dangerous.

Not in a bad way. No, I’m very dangerous in the sense that with no ties, very little commitments (outside my business), and a hell of determination to get out of this mess, I have a freedom I’ve never had before.

Since I stopped trading and came clean with the family (it’s been over two months), ideas have been flowing like water. I’ve had more great business building ideas in the last 2 months than I had all of last year.

And I am actually acting on them, not just dreaming about them. Our advertising program is generating over 7K a month now, and I have a pretty solid plan to stabalize this income, and grow it to around 12K in the next two months.

12K a month? Holy crap. That’s a lot of money. And with my biz expenses running a little over 5K a month, that’s not bad for takehome pay (not that I would take all that home of course).

But that’s just the beginning. I think I can start up two new programs this year (in our same niche) that will generate 20-30K if they go as planned. 40K a month? I could stop writing about all my problems here with 40K a month!

I have alot of work ahead of me. Lots of work.

So, I am excited. I am scared. I have nothing to lose, and everything to gain.

Side Note: I’ve noticed that nearly half of the traffic to this blog comes from that crazy Casey Serin kid. I don’t have time to read all his posts, but my gosh, that guy is crazy. I have to give it to him though, he does know how to write compelling content, no matter how nuts he sounds most of the time. I think I should challenge him to a business contest or something (ie, whoever gets to 20K a month first in net profit buys the other dinner or something). Anyway, just a thought.

P.S. Thanks for all the comments, some have been very useful! (that is one of the other reasons I keep writing here…some good encouraging comments) Some people bash, but that is totally understood, and I deserve it. I won’t deny that. But it’s nice to hear encouragement as well.

Make more money.

No, I am just kidding. I don’t believe money equals happiness (although I swear I saw some study about upper-income, but not super rich people being slightly happier…whatever). But in my situation at the moment, I can’t have any fear about trying to make lots and lots of money. In fact…I HAVE to make lots and lots of money. Pressure, huh?

The House

I met with a real estate agent this week who specializes in short sales (99% of what he does is short sales). The guy knows his stuff, and I think this is the route I need to go with my house. So, I’ve made my deicion on that, and he will be dealing with the 1st and 2nd mortages on his end, which will be nice. One less thing for me to worry about.

This means I can now update my budget to completly exclude any mortage payments (not that I could pay any anyway at the moment. I’m going to do a budget online somewhere (I looked at budgetsimple and pearbudget)
The Business

Business stuff is going OK. Expenses are running around 5K a month, and revenue is hovering right about 7K a month at the moment. I have not been selling our advertising packages for a few weeks now and have been soley working on our existing clients and improving their service and return on investment. We’ve had some people drop out, but longer term, I think this new project which I lauched about 6 months will be stable in a few more month (assuming I can keep all the balls in the air until then) and should ramp up to around 10K-12K a month before the market is tapped out for what we are doing. Hopefully I can get us to 12K by June.

I’m doing some exciting stuff at work. Now that I am not trading and staying up 20 a hours a day doing that, my mind has been much more creative and able to focus almost 100% on building the business. Also, my interactions with my employees and even my friends have been much better since I tapped all my money out about 2 months ago.

And for anyone curious, no, I have not traded since I stopped two months ago and really took stock of what I had done. I have no intention of ever doing it again. It has no appeal to me whatsoever anymore. I have many other good things in my life I can focus on. I do not worry about falling back into that bad habit again.

The Life

My life is going OK. I feel I am at a HUGE transistion point. I’ve come to terms with how I had been living the past 3 years (basically a huge lie), and I’ve told all my close family. I’ve still yet to tell any of my friends yet, and I’m not sure that I will. If I end up having to declare bankruptcy or they house vultures show up in another month, some may find out.

My goal is to get myself doing well enough so that I can feel comfortable telling them in like 2 years or something when I have everything paid off (that is my goal….2 years, if I can get through this summer…). But for now, I’ve told my family, and I feel comfortable with that. I’ve made other mistakes in my life, some fairly big, and sometimes you tell people, sometimes you don’t. It’s not that I’m hiding anything, you know, its just not everyone needs to know everything about your past. Maybe I’ll write a book someday and I can air all my mistakes then! That would be the day.

I actually feel pretty good as of late. I’m stressed for sure. I still have to do the 2006 taxes for my business, and I have a zillion other things to do at work, but I’m handling it OK. It’s just such a relief to feel more like an honest person now that I am not trading. My business is honestly doing OK, and so when people ask, its very nice to be able to be upfront and exciting about what I am doing. I haven’t been able to do this for like 2 years, so its very freeing.

The Girl

or lack there of.

I am in no position to be dating…right? The thing is…I haven’t dated anyone for almost 2 years now. And now that I am feeling honest with myself and a little more confidant…I actually feel like I want to date someone.

Worst timing ever, right?

Maybe yes, maybe no. Let’s say I actually do make it through the next few months, and maybe into the fall. Without my house payments…suddenly all my debts + business expenses is under 9K a month. So, say a few hundred for groceries (my insurance, and car and cell phone are all under business expenses), and some social money, and suddenly now I only need 10K (only 10K!) a month to pay all my bills.

I’m at 9K right now! (with my 1500 a month from roomates…and that is only for 2 more months).

So, its looking possible. Granted, I need to add in a payment plan to the IRS that I haven’t set up yet, so maybe more like 11K a month. But that is possible…

So back to dating. My thing here is…yes, I made some huge mistakes. But should I completly put my life on hold and punish myself to death for the next 2 years? I just don’t know if that is the best move life wise.

I just don’t know.

I just don’t know about alot of things these days.

Thanks for all the positive comments as of late. I appreciate them, its good to hear some reinforcement that what I am trying to do seems to be the right track according to others. Not that I base all my actions on what others think, but you know what I mean.

Meeting with the consumer credit counseling lady

This was good and bad. Good because she gave me some good tips about dealing with the mortgage companies in trying to get a short sale or other arrangement worked out. Bad because I was late, and apparently I set up only a housing appointment, so we didn’t get to set up a debt management plan for my other personal debts. We did a budget (very quickly…I was late), that I will maybe put online somewhere if I have time this weekend. I have another appt. next week to look at setting up the DMP. It doesn’t sound like it would actually reduce my payments, but it would allow me to pay off the debt much, much faster.

This is all assuming I don’t declare bankrupcy (which the counselor brought up…). I still don’t want to go this route, unless I absolutely have too.

Short Sale Agent

I am meeting with a short sale real estate agent specialist tomorrow (well, today now, as I’m up late working) morning. Should be interesting. I’d like to sell/get out of the house by July’ish. Maybe even June if possible. From what we talked about, it seems like getting bank approval will be the most difficult part (in 3-4 months it may be easier, in the pre-foreclosure process, but I am not that far behind yet).

Back to boring, tedious, but important work…

Ohh…the salsa (in the title). I just had some chips and salsa…it should be an interesting night for my dreams!

I pulled three all nighters at the office last week. And by that I mean I came home at:

noon (the following day), 6am, and 6:30am wed. thurs. and fri. of last week.

Needless to say I was pretty tired. But I got a ton done.

What did you do?

I moved my company webpage, where we host all our advertising clients to a new server. A zillion pages had to be redirected, and it was just a giant mess, that is just now starting to get back together. The good news is that the new hosting company is ten times faster, and we are already seeing better search results for our clients pages. Whew. I had to hand edit nearly 2000+ 301 redirects….that was a nitemare, but mindless so I caught up on a few TV shows I love but have missed the last few weeks (friday night lights, lost, grey’s).

What about the house?

The bad news with my house is that I haven’t made any payments since December. Yikes. The good news is that I finally found a short sale expert who I am talking with tomorrow, and hopefully he will be able to handle that process for me. I know I need to get rid of the house, and I am pretty OK with that. It kind of sucks, but hey, I’m dealing with it.

creditor news

Not being able to pay the mortgage has left a little extra money (after business expenses which have to be paid, payroll, lease, advertising, ect) to pay some of my debt payments. So I finally sent a payment to WAMU on the 30K SBA loan I have with them. Also, Wellsfargo auto-drafted a payment from my checking account to my line of credit with them. That kinda sucks, but I figured it would happen eventually. I do need to make a payment on my Wells business line sometime soon.

Citifinancial continues to be the bane of my credit existance. Their solution to everything seems to be re-applying for a higher credit line. Yeah, like that is going to work. I sent them their Feb. payment today, and plan on sending the March in shortly so they will stop calling me.

credit counseling

I have an appointment Wed at a credit counseling page (debthelp.org). From what I can tell, these guys are legit. I have to bring all my folders/correspondence in when I see them. I’m hoping to work out a debt management plan with them so that I can pare down the number of bills to worry about.

counseling

I’ve continued to see a personal counselor. And its interesting, I am actually really enjoying the sessions as of late. The first one I was pretty unhappy to go to (this was something my parents insisted I do…but now I am glad they did), but now I think it will be good for me. I have not seen a counseling since I was 18 (23 now), and I had forgotten that its nice to have someone who is completely confidential. Friends and family are wonderful, but there is something about knowing you can tell someone anything without fear of judgment or gossip. One of the goals of this is to figure out why and how I got myself into the situation I did. One of the big things I discovered, just in the past session is that I tend to not ask for help in situations where it will show my failings. Sadly, those are the situations where I usually need help the most.

For example, I could have easily asked my father for help (to stop trading) after I lost my first thousand. And he would have helped me keep myself accountable. I could have asked for help after the first 100 thousand. But I did not. So, in the future, when I am in trouble, I need to realize that often my bad behaviors have a snowball effect that if not stopped early.

It sucks to learn stuff like this about yourself. But encouraging at the same time.

income stuff

My business has slowed down on the sales side of things as I’ve been working so much on our web stuff. We are probably around 160 packages sold. My initial goal was to rush to 200 and then catch up with all the work to be done. Well, its too late for that, and so now I am doing the catch up work, but we are not at 200 yet.

I would say as long as I can keep our clients happy with the amount of business they receive from our ad packages, we should be able to reach 200 by the end of April. And 250 by the end of May.

Also, I’m really close to selling my scooter for about 2K. I need to get it into the shop, but just didn’t seem to have the motivation this weekend.

business taxes

I have to do our business taxes by tomorrow. I was supposed to get this done this weekend! Crap!

Ramen

I got a hot pot for the office (that is how I survived 3 nights here. I realized that one of the major reasons I would go home was just to eat food. So, I brought some snacks, soup, and ramen into the office) and I love it. Thanks to everyone for the lunch tips!

And regarding updates,

I do wish I could post more, it’s just not a priority at the moment. I’m sure if I end up living in the office for a few months (which is looking like a strong possibility), I may post more as I’m bored.

So, I live for the subway special.

It’s not the cheapest way to have lunch (rice, beans, chicken would be cheaper…but that is usually my dinner), but its pretty close.

$2.99 for a 6″ sub. That and a little free water, and you’ve got yourself a good little lunch meal. And today’s special is turkey and Ham. mmm…

Mon-Savory Turkey Breast and Ham
Tue-Meatball Marinara
Wed-Savory Turkey Breast
Thu-Italian B.M.T.
Fri-Classic Tuna
Sat-Roast Beef
Sun-Oven Roasted Chicken Breast

Payment To Make Today

So, since I am not making mortgage payments (still looking for a short sale expert agent in Seattle), I need to keep up on some of my other debts. So, I’m going to mail checks today to:

WAMU SBA Loan - 1 Payment (I’m 3 behind at least!)

AMEX - 2 $25 payments on each card

Wells Business - 1 Payment (maybe)

Wells LOC - 1 Payment (maybe)

Citifinancial - Feb. Payment (even though I despise these guys….I still owe them money. Just because I don’t like them doesn’t mean they don’t deserve to be paid back).

Still trying to get a time to go see a consumer crediting agency to look at my personal debt situation (looking at debtadvice.org) Gotta get that done.

It’s really hard dealing with this stuff at work, because I have 4 part-time employees. They don’t know about this situation, nor do they need to. But, it really restricts my ability to do some things I need to do (like go see the consumer credit place). I pretty much have someone else in my office 24/7. Wed. I have about 3 hours in the afternoon with just me, so I’ll try to get that appt. in there.

OK, time for my ham and turkey.

Sometimes I think the girls over at CitiFinancial are in love with me. I mean, they call me like 4 times a day, and yesterday they even sent me this overnite package with a single page inside! Wowee…

Then I remember they are calling for money. Sigh, oh well.

Check out this letter:

update 2008 ——> see my guide on short selling my home

I’ve been doing some research on short sales. Great article here:

http://www.inmanwiki.com/Real-Estate/Short_Sales%2C_Preforeclosure_Workout%2C_Short_Payoff

If I didn’t have my 4K in monthly mortgage payments, that would be huge. I have no emotional attachment to the house. In fact, I have more bad memories than good to be honest (I never have really meshed well with my 3 other roommates). I’d be glad to get rid of it.

I just have so much to work on at work and with all this stuff at the moment, working on a short sale seems huge. Would a real estate agent do most of the work in this area? I just don’t have time to be making tons of calls at the moment. Also, I only have about 5 business hours a week when I don’t have employees at the office.

And our walls are paper-thin, so making calls about avoiding foreclosure on my house doesn’t sound like much fun and I doubt would inspire confidence from my employees.

It looks likely that I may end up moving into my office for at least a few months if I go through with the short sale and can get that done. I haven’t been able to make mortgage payments on the 1st or 2nd since December…

I’m tired.