I think I am becoming more anal.

When sorting my laundry today (after my first night sleeping in the office), I decided I’m only keeping 14 pairs of white socks (that still seems like a ton!)

• 3 calf-length
• 6 mid-ankle
• 3 ankle
• 1 thorlo

I even thought about numbering each pair, but don’t seem to have a good marker any more.

You might be thinking, DebtKid, you’re crazy! There are only thirteen pairs of white socks in that picture!

Yes, that is correct. But I still have 14 pairs of white socks.
It will come to you.

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

Wow.

I can’t even begin to describe the sheer awesomeness of the past two days. Yesterday was a turning point, I can feel it. It was the day I’ve been working so hard to achieve, and I hope it can be my turning point. I still have an incredibly long and difficult road ahead, but days like yesterday make me think I have a shot.
Here’s What Happened

• I Made my biggest sale ever to kick off our new Plan “B” project at my office. The Sale was 4 times bigger than any one I’ve ever had. The client I signed is also the perfect client to help launch this new division at my office.
• I found out the buyer agreed to cover more costs in the short sale of my house. I signed the short sale papers today. A big chunk of my original $334K in unsecured debt is now gone.
• It looks like I have a decent shot @ winning the Bloghunt Contest at DebtCC
• I got offered a part-time contract writing gig @ Lending Club, this could provide the income I need to live outside my office.
• I rewarded myself with a frosty/large fry combo from Wendy’s (It’s an amazing hot/cold + sweet/salty combo. Try it sometime)

Like I said, It was a very good day yesterday.

What Now?

I’m spending some time today at the office, and then back to the house to finish last minute goodwill runs and cleanup. I think possession of the house will transfer tomorrow, so tonight will be my last in the home. I have my layout all setup to move into the office, and to anyone looking in, nothing will look different at all due to the layout of my office.
What’s Ahead?

Short Term - Move into office. Prepare all paperwork for bankruptcy filing. Continue new projects at my office.

Medium Term - Find a permanent place to live (not in the office), Grow my business to 20K in monthly revenue (currently just over 7K), finish any and all bankruptcy issues

Longer Term - Pay down the aprox 307K in debt I still have left, including the 147K that I owe my mother.
Why do I want to be debt free so bad?

Women.

I’m serious. I haven’t had a girlfriend in years, and it’s very difficult to be open and honest and meet new women when you are 24, living in your office, and 300K in debt. So all this whole debt mess needs to get taken care of ASAP.
Plus, debt sucks. It makes you do stuff like lie to your friends.

But I really do want to get married someday!

Thanks to Ian, I got the comments fixed here. I’m up late tonite…we started my ‘Plan C’ (Plan B starts next month…its not quite ready yet…) project at work today. No sales so far, but its looking promising, just might take longer to sell than I thought, but that’s usually the case…

Thanks to everyone who’s voting for me in the blog contest below. If you haven’t yet, please do! I really appreciate it, thanks!

This week has been nuts. Absolutely nuts. Sickness, new project at work, moving into my office, bankruptcy paperwork, nuts, nuts, nuts.

I’m too tired to even write today, and probably won’t be able to write for a few days. It looks like I’m signing papers for the short sale tomorrow or thurs.

I still have a good 10 hours of strait work at the house to clean up and organize and move stuff to the office.

How you can help

When I started this journal 5 months ago (wow, time has gone fast) I said I would never ask for money. And I never will. I like to be creative and I found a creative way you can help you me, if you’d be kind enough.

There is a great site for people in debt that hosts a blog contest each month. If I could win the contest this month I would win enough money to put a deposit down on a small studio apartment or basement room here in Seattle. I promise I’ll post pics of the new place (assuming I win. I was 7th place last month). So, I’d really appreciate a vote + comment in
this little widget here. Thanks! (crossing my fingers….)

Click the Yes to vote!

Do you recommend debtkid.com for dtcc Bloghunt?

P.S. Mailed off the IRS 2005 bill today. My first debt completely repaid! ($1025.50)

More on DebtConsolidationCare.com

I found this site a few months ago while searching for a resource on negotiating with creditors. The site has a very, very active forum on all kinds of debt issues. Many in the forum seem plagued with payday loan debt, which is different from my situation, but hey, debt is still debt right?

I received an e-mail from a guy over at debtconsolidationcare indicated that the race this month for the top blog is very close, but it sounds like I have a shot.

The DebtCC community was started by a guy named Denny, who has a very interesting story of getting into and out of debt as well. He ran a tech company that went bust back in the bubble, ending up living in churches, and on the street. I may have to give this guy a call sometime. I’ll be living in my office by the end of the week, so maybe we can share some tips. He racked up 20K in debt, anyway, enough of me rambling, you can see his story here.

My 1K IRS (2005) bill is due by the end of this month. I should have the cash available to make the payment in time. This will be the first “debt” that I will have fully paid off! Yay! 1K down, 299K (or so) to go!

Here’s a quick tip on how you can raise your credit score very quickly without any cash on hand:

The Tip

Call your current credit card companies. Ask them if they will increase your limit. Even if you owe $1000 on a $1000 limit card, if you’ve been paying on time, there is a good chance they will raise your limit. This provides more “available credit” (debt to limit), a big key to raising your FICO score.

How it works

Let’s do a quick example to show how effective this is:

Let’s say you have three $1000 limit credit cards, each each has a $900 balance.

Card #2: $900/1000 limit. 90% utilization.

Card #2: $900/1000 limit. 90% utilization.

Card #2: $900/1000 limit. 90% utilization.

You give a quick call to each card. Card #1 raises your credit line to $1500, Card #2 to $2000, and Card #3 to $3000. Great!
Now:

Credit Card #1: $900/1500 limit. 60% utilization.

Credit Card #2: $900/2000 limit. 45% utilization.

Credit Card #3: $900/3000 limit. 30% utilization.

Total debt: $2700. Total Limit: $6500. Overall: 42% utilization!

Caution!

Now don’t go and use that extra credit!
*NOTE: When you are talking to the credit card company rep make sure you ask if they can do an increase without doing a “hard pull” on your credit report. A “hard pull” shows up on your report as an inquiry for credit, and can result in a quick 10+ point drop in your score.
Summary

So, in the scenario above. You dropped your credit utilization from 90% (very bad) to 42% (much better, under 30% would be best. Or even 0%!).

What did that cost you? Nothing! Just a few quick calls to your credit card companies. Especially for a younger person with a limited credit history, your credit utilization % is often the only factor you can control. You could easily see a 40+ point jump in your scores by doing the easy, free step outlined above.

Delete bad entries from your credit report (legally!)

If you’re credit has some issues, and you want results a little faster, you might check out a service like Lexington Law.

How To Get Your Score
NOTICE: Don’t get your credit score from anywhere else except myfico.com. They have real scores here, and often handy coupon deals. Currently the top coupon code I could find is: MW01 (looks like 20% off)

So, this looks like my last weekend in the house. No wild parties for me, nope. I still have a ton of clothes to sort out today, as well as a half million other little things to get done before monday.

Priorities

• Goodwill pickup. Call them to pickup pile in living room
• Office Run - Make a run of stuff to the office, no one works there on Sat. Shouldn’t arouse too many suspicions
• Laundry - Finish laundry and sort what I’m keeping and what’s going to goodwill
• Sell last few big items on craigslist
• Make sure business is ready for Plan B sales week on Monday

Emotions

It’s been strange clearing out the house this week. Not really allot of emotion actually. I mean, I’ve only been here a year, and the whole house purchase was just an investment anyways. 2 of my 3 ex roommates still owe me money. I even heard that they “are mad at me” for making them move. Frack that. I haven’t talked or seen them in over a month and its been wonderful.

I have a Dr.’s appointment Monday morning before work. This is day 5 of feeling like crap, and I fit many of symptoms of strep throat, so I thought it best to go in. I pay too much for my health insurance right now to not even ever use it (I’m normally a very healthy guy). The co-pay is $15, so not awful.

I’ve noticed that I’ve been secluding myself socially again. Granted I’m working allot and trying to move, and have been sick, but still. I know what it is.

I don’t want to lie anymore.

I hate social situations where I can’t explain what I’m really doing in my life. Will this ever change? It has too, because I can’t keep holed up in my office all day and just hang out with family and my one friend who knows about me. It’s just not a healthy life.

Just looking for the Lending Club $25 sign up bonus? Go here and you’ll be credited $25 once you confirm a lender or borrower account

Since you need a 640 FICO to borrow on the new social lending program Lending Club, I obviously can’t write a traditional review of the service at least from a borrowers perspective. I will however give my thoughts on the program as a mid-twenties, very much in debt, facebook addict.

Visual Overview of Lending Club

Why Borrow with Lending Club?

Interest rates at Lending Club start at 7.5%. Last time I checked my credit cards started at 19.9%. Also, loans from Lending Club are term loans vs. a revolving loan like a credit card. You know your loan from Lending Club will be paid off in 3 years, with a fixed monthly payment. Sounds pretty good to me…think they’d float me 300K?

Yeah, I didn’t think so either. Let’s keep going…

Why Lend @ Lending Club?

The obvious attracting to parking some cashola in your Lending Club account is the returns. According to their website their average return is 12.26%. Not too shabby at all. Lending Club also gives you access to more credit information than prosper does (I have lent at both). When looking at loans to fund Lending Club shows you connections that you might have with the borrowers (geography, work, education, friends) which is actually pretty neat. This connections feature encourages a more “personal” feel to the loan and I could see that helping in their default rates.

Prosper vs. Lending Club

The obvious peer to this peer-to-peer lender (aren’t I funny?) is prosper.com. Prosper is well established, and I even wrote about their $25 free sign-up bonus here.

While on prosper you can form lending groups, the social aspect of lending doesn’t seems as emphasized as with Lending Club. You don’t get more social than facebook, where Lending Club initially launched.

More Screenshots

Here are some more screenshots from Lending Club’s site…

The Closing

Lending Club has a shot. I’ve heard lots of rumors of not so happy lenders on prosper. By limiting loans to only those with 640+ FICO scores, they may be able to keep the lenders happy. Without enough lenders, they’ll be sunk. People will always be looking to borrow money. And people lenders will always be looking for solid safe returns. Lending Club fills the niche. You can get $25 for signing up here (and help the DebtKid out, I’ll get $25. Thanks!). It’s definitly worth trying at least a $100 investing in, with their average return hovering over 12%. Beats my emigrant direct account anyday.

DebtKid, why did you write this overview?

I’m kinda bucking for a part-time gig at Lending Club, figured I’d show them I know a bit about the company. Plus, I can’t sleep because of my throat. I have an appointment later today…

Everything is crazy right now. Nothing is in order. My brain feels like this:

I’m exhausted from whatever flu bug I caught earlier this week, and haven’t been able to work out to clear my head. I showered at the gym yesterday just to shower since I hadn’t had one in…well, too long.

Bankruptcy Update

As I feared, nothing is going smoothly here. Because about 80K of the debt I would like to file in bankruptcy (if I could do it) is under the business, it isn’t that easy. Even though the debts are personally guaranteed by me, it looks like I may have to file a Chapter 11 for the company as well. This is just getting nuts. I have a meeting with a different lawyer (free consultation again) coming up soon to look at this angle of things. If I file a Chapter 13, my “personal” debts (excluding what I owe my mother of course) are only around 60K + Student loans (another 40K). Since my student loans are deferred at the moment (except my federal ones), those aren’t a big deal. The other 60K is in a debt management plan that I set up a few months ago (though I haven’t made this month’s payment yet).

So why file Chapter 13 if all it’s really going to do is by me a few more months? And then I have to start repaying that small amount again. In the meantime…

Business Debts

My biggest issues on the business ends of things are the two business loans at WAMU and Wellsfargo for 30K and 20K. I have another 30K or so in credit cards from citibusiness but those are all in a 0% hardship program at the moment. So the payments are only about $250 a month total for all of those and all that goes toward principle. So, good there.

OK, It’s time to call WAMU and Wells and see if they have anything new to say…

OK, two no anwers at WAMU, here’s what Wells said…

WellsFargo

Since It’s only been 2 months since my last payment (not the total amount due though), I’m in collections, but not “pre-chargeoff” according to the helpful lady at WellsFargo.

I played nice on this call, and it turned out well. Lots of good info. In her department they could offer a 85% settlement. Obviously that ain’t gonna work for me. But I think with two more departments (pre-chargeoff department, then the chargeoff department), that % might get much lower. I think its just a matter of time.

Short Sale Update

Got a call from my real estate agent today with an update on the short sale status. Good news is that we’ll get a final go-ahead from greenpoint (the 2nd mortgage) tomorrow on the amount we will be giving them (they want 15K, we can only offer around 7K). It they accept the 7K everything will be good to go.

Bad news is that I’ll have to come up with all the utility payoffs (around 2K right now…but no hot water usage lately! : ). He’s going to try and include $1200 for utilities in the numbers, we’ll see if that flies. If it does, I’ll have to come up with $800. I could do $800. No way I can do $2000.

We’re just so close on the house!

Moving

I spent Monday and Wed this week organizing all the stuff in my house into piles. Keep pile, Sell on craigslist pile, sell on ebay pile, and give to goodwill pile. I got alot done yesterday with my brothers help even though I felt like death.

I still have a few larger items to sell on craigslist, but once those are gone, all the hard stuff is taken care off. We took a ton of stuff to goodwill and that felt good. I think I’m going to like a much more spartan lifestyle (which I’ve already been living the last few months anyway…).

Assuming the house goes through (crossing fingers still…), I’ll start staying in the office within 2-3 weeks. I may have a week where I can stay at a place my brother is house sitting, so that will be nice.

New Projects

We will be start selling new advertising packages next week. If all goes well, it could add another 10-20 clients to our business within a few weeks. We are at 130 right now, and have been stuck at that number for several months now. Our new project could add 100 clients within a few months which would be awesome. We’ll see how it goes. No, its HAS to go well.

I’m good at selling. I’m good at managing my employees, I CAN get my business up to 250 clients a month..!!!!! (sorry, needed a little self talk there!)

Time to try WAMU again…

Top 7 Reasons Money Sucks

#7 Whenever you find a bill in your jeans, it’s always a $1 or if you’re lucky a $5 bill. Why can’t I find a $1,000 bill in my pocket just for once?
#6 Money issues can bring out the worst in people. You thought someone was your friend…then they screw you out of $100. I guess you can put a price on friendship.
#5 Your Dad always has more of it than you.
#4 You lent $5 to a friend 3 years ago, and every time you see him you think of the $5 he owes you, but you can’t bring yourself to ask him for it now.
#3 Some people have lots of it. Others have some of it. Billions have none of it. That’s fair. Not.
#2 Woman are attracted to “stability” in men. What’s another word for “stable”? Oh yeah, rich.

And the #1 reason money sucks?

#1 I don’t have enough of it!