When was the last time...

When was the last time you took a serious inventory of your life? Sounds deep doesn't it? Yet, it's something that we should all spend time doing.

Last Sunday, my pastor reminded us that all businesses have annual business reviews - a time when they look at their previously stated goals and measure their success. I remember having to do this quarterly as a business manager for the companies that employed me. It was something I always regretted doing but was always so glad when it was completed.

The first and most obvious question is, "Have you ever taken the time to commit your goals, dreams and family aspirations to paper"? If not, it will be tough to measure how you are doing. I encourage you to take time to dream. The older we get, the easier it is to brush things aside as childhood fantasies but something magical happens when we take the time to put these dreams to paper. Start small, perhaps a list of 10 things that you hope to accomplish this year. You can even just commit your values to paper and then see how you live out those values over a given period of time.

I recently found a bucket list of 100 things I wanted to do before I died. This was a list that Larry and I made about 12 years ago. I was cleaning my desk when I found it. I was amazed to see how many of the things I had accomplished without even viewing the list after I had committed it to paper. Imagine if I had put effort in to it and revisited it on a regular basis?

If you have made a list of your goals, when was the last time you took it out and seriously reviewed it? If it's been awhile, take time to do that now. The weather is perfect to be indoors with a warm cup of tea snuggled on your favorite chair or sofa. Pull out your list and walk through each item carefully. If you haven't completed an item on the list, ask yourself why. Perhaps it's not as important to you as it once was, but perhaps there is something that is preventing you from living the life you were meant to live.

There is nothing more engaging that a human being who is living their life to the fullest. Someone who lives with intent and purpose. You probably know and admire someone like this in your life.  My encouragement for you today is to be that inspiring person in someone else's life.

Do it today!

Waking Up...

The challenge. Make a 'specific' list of all of your gifts, talents and abilities. For example, rather than saying you are creative, say "I am a talented photographer". Once you have taken the time to make the list, write a number next to each of the items indicating the number of hours you spent this past week doing them. Ouch!

This was another great exercise in my book titled, "One Month To Live" by Kerry and Chris Shook. Yet, this one really hit me hard. First of all, it takes time to come up with the list. My first inclination was to say that I don't have any talents. That moment passed and then I stalled out in coming up with more than one or two things. Forget about the final task of assigning time allotments, I couldn't come up with the list!

It's a great exercise and one that I encourage you to do, especially while you are still young and have years ahead of you to develop good habits of making time for yourself and those unique gifts that you have been given. For the rest of us, it's a great idea to remember those passions that we've buried deep within.

What's so amazing to me is that for every truly exciting idea that keeps me up at night, I usually have the ability to accomplish it - yet, I don't. Why? Why is it that we're uniquely created to accomplish specific things in life yet we settle for the path of least resistance? We settle for the safe choices, the popular choices, the choices less likely to 'rock the boat'.

I honestly think we need more people willing to rock the boat. We need passionate, excited and talented people standing up for their ideas and for rising above the status quo. When was the last time you were fired up and DID SOMETHING ABOUT IT?

We visited with a friend this past Sunday who told us about a political rally that he just participated in and how doing this elevated his spirit. In the past, he complained about the problems with our government to anyone and everyone. This was the first time he did something about it. Hooray!

In his book "Living Your Strengths", Donald O. Clifton says from a very young age we are taught to be well rounded. Teachers and Adults in our lives attempted to soften our sharp edges, to become smooth and well rounded. According to Clifton, however, what we're often taught is how to become as dull as we can possibly be. We're taught to play it safe, to be compliant, to follow convention and tradition, to color inside the lines and to stay inside the box. God never meant for us to be well rounded, he made us each unique with unique talents, passions, abilities. We should pursue those things we're good at and let go of what we're not.

I've made my list and I'm fired up! I'm excited that there is not another Jan Wood out there and that it's up to me to be all I was meant to be. I am happy to embrace all of my talents and abilities, and to speak up regarding those things that I'm passionate about. I'm going to focus on them and develop them until they flow out of me without my consent.

Watch out world, one more sleeping giant has been awakened!

Babyboomers Beget Babies of Babyboomers

I am a Baby Boomer. I don't say that as if it's a badge of honor but it does carry with it the notion that we are a special generation. Most Baby Boomers are associated with possessing a rejection or redefinition of traditional values despite having been a generation that most commonly grew up in a time of affluence. In fact, as a group, we were the healthiest, and wealthiest generation to our time and among the first to grow up genuinely expecting the world to improve with time.

In fact, I was so convinced that things would just continue to improve that I didn't think I needed to extend much effort, including finishing school. Somehow, the benefits of growing up with the security of a roof over my head, a good job and all I could want, would just follow me wherever I went.

This was reinforced by the fact that I had the good fortune of landing really good jobs in my late teens. I enjoyed work in those days and because I was a real people-pleaser, I had no problem getting noticed and learning the art of how to get promoted quickly. The fourth job I ever had was with Apple Computer. Apple was the epitomy of a company culture started by Baby Boomers. Apple re-defined what changing all of the rules meant and my time spent there continued to promote and encourage my independent character and demand for the best of all that life could offer (or at least money could offer).

I remember my first business trip with Apple at age 21. I was picked up by a limo driver and taken to SF International Airport for a business trip to Calgary, Canada. I flew business class and in Calgary, stayed at the best hotel available. My stay was four days but my actual hours worked were about six. The remainder of the time was spent touring the city, eating new exotic foods, experiencing my first massages and getting a taste for good life, all on Apple. I remember thinking that I had arrived and I was only going forward from there. 

I received a call while in Canada that I was needed for a show in NY City following this trip. This was my first trip to the Big Apple and I was asked to demonstrate Apple Hardware at the Financial Business Analysts Meeting at the World Trade Center. Our CEO, John Sculley, and all of Wall Street were there asking me for one on one demonstrations of our new products. I think if I had only grasped what I was actually doing at the time, it would have been too much to bear. 

Larry and I met while working for Apple and after working there for almost 13 years. Both of us had grown up with the lavish benefits of working for this company at a time in our industry where we thought we could never be touched! Our entire courtship was funded by Apple as we worked in sister organizations providing us with trips around the world - all expenses paid! So it's no wonder that our marriage began with the mindset that we deserved the best and that living the lives of the rich and famous would just continue.

Sadly, there was a huge cost to this insatiable desire. The most costly was my time. My job with Apple required that I travel about 80% of the time. That meant that someone else would be raising my kids and when I was home to see them, I was exhausted. In my mind, it all made perfect sense. I made great money and on occasion I got to take them with me on these trips so they were afforded all of the benefits of my hard work. Makes sense right? Wrong.

I had no idea that what our pursuit for stuff and lifestyle was really telling our kids was that happiness existed in things or in outrageous experiences. Further, because we never learned the wisdom of saving for a rainy day or investing for the future, we never taught that to our children either. Therefore, they grew up as we had modeled, expecting things to just fall in their laps with little or no effort on their parts and wondering why life was so tough when they had to maintain this lifestyle on their own. Or, they decided to drop out of this materialistic society and live on love!

Larry and I have five kids between us and it's interesting to see how our choices have affected them. Out of the five, one is a saver, an investor, and a very hard worker. I think she saw our choices as potentially harmful and feared our living on the edge choices. She committed to 'never living like that'. It's the 'fear' part that concerns me. While I'm so happy that she has adopted these good saving habits, I hope that she'll manage to have some enjoyment in living without the fear of making our same mistakes. 

Two of the five kids have openly adopted a lifestyle that is in complete opposition to anything that remotely smells of materialism. They are our silent sufferers. They definitely adopted the "I'm doing it my way and to heck with societal norms" approach to life, regardless of the struggles that they appear to be having. Our hope for them is that they find the balance of earning as much as they can so they are free to live whatever life they choose without so much personal hardship. 

One of them is a mirrored image of us - living on the edge, seizing every opportunity for fun and party making. "Tomorrow will take care of itself - in the meantime, enjoy all that money can buy". Unfortunately, we are living in a vastly different time. Without an effective and solid plan, the world will have it's way, as we've seen all over the news. Oh how I wish, we would have been better stewards of our resources and better teachers to our kids.

The final child is a mixture of all of them. She has the conscience of knowing that there is a better way to live but a deep taste for the 'sugar'. The battle of those two things rages wildly in her. At a relatively young age, she has already experienced some of the heartache of these choices. I pray she learns how to limit the desire to spoil herself in exchange for a safer and potentially more secure future.

I find myself wondering how many other baby boomer children of the baby boomer generation did not have the benefit of role models or good teaching. For those who followed my path, I'm confident that we have produced a generation of confused consumers and disillusioned children. What really concerns me is that many of these kids are suffering the fall out for the former generations choices.

I'm writing this blog primarily for the grandbabies of the baby boomer generation. My hope is that they will find good teaching and excellent examples of people who have learned how to live below their means - people who have found that time with people is more important than a garage filled with stuff. I'm committed to being one of those examples. I'm thankful that I still have time to do it right and that my own grandchildren may see an example of someone who loves the gift of life more than the gifts. May they develop a desire to love people and use things. May they cherish the things that they do have and be satisfied that it is always 'enough'.

Will you join me in being an example for these future generations? There is a prayer that I learned at a very early age and it's one that I've adopted again and I recite each morning. It's one that I've committed to teaching my grandkids for in it is a reminder to always ask God first for all that they need and to only ask for that which is truly needed and nothing more (anything above is truly a gift)  I like the translation below - it may be a bit different than the one you learned.

"Our Father which art in heaven, Holy is your name. 

Thy kingdom come. Thy will be done, as in heaven, so in earth.

GIVE US DAY BY DAY, OUR DAILY BREAD.

And forgive us our sins; for we also forgive every one that sins against us. And lead us not into temptation; but deliver us from evil."

Amen.

What Does Your Checkbook Say About You???

I've been thinking a lot about our financial journey in recent days and, like most times of reflection, I've come to some revelations.

And, like many times of reflection, some revelations are not as pleasant as others. So is the case with this most recent occasion.

I remember Larry and I reading a book about 12 years ago titled, "Your Money or Your Life". It was a really inspiring story of two very successful stock brokers from New York that were tired of the proverbial rat race. The book chronicles the course of action that they pursued in order to change their lives. Their ultimate goal was to become Financially Independent. At first blush, this sounds like most people. Yet, their definition of independence was a bit unique. They considered the notion of independence to be one where money would no longer have a hold on your life. You could actually live 'free' from it.

They take you on a personal journey of discovery including: documenting every penny you've ever made and giving an account for it, tracking your expenses (to the penny) for a period of two weeks, and spending time developing a 'fulfillment rating' for the activities you do in your life. An example of the Fulfillment Rating would be to assign a number of 1-5 (one being the highest level of fulfillment) to all of the activities in your life. Once completed, you would take your expense sheet (where all of your money went) and lay that against your Fulfillment Chart. In our case, we found that our expenses were in no way a reflection of where we found our greatest joy.

The final activity was an exercise to determine what your current job was actually paying you once you netted out all of the intangible costs. For example, what type of car do you have to drive for that job, how far do you travel, what clothes do you have to own, how many stress days do you have to take, how many hours are you actually away from the home, etc. Once we completed this exercise, we were amazed. In fact, I learned that the six figure salary I was earning was actually netting me about $12/hour, once I deducted these hidden costs. It was out of this exercise that we decided to leave the bay area and move to the foothills of the Sierra Nevada to raise our kids and improve our quality of living. A move in my life that I've never regretted.

Sadly, like so many other great inspirations, we never completed this journey. Instead, we grabbed on to the notion of a lower cost of living lifestyle while still earning high incomes. The net effect was that we continued to spend every penny we had and ultimately drove ourselves right to the poor house (or in our case, the trailer house).

Today, I was asked the question, "What does your bank statement say about your values"? 

It's a really fair question and one that I haven't asked in a long time. While my bank statement is dramatically skinnier than it has been in years and the fact that we currently do live beneath our means exists, I'm still not happy with what it says about my values.

In a time when every marketing message aimed our way says 'you deserve better', 'live for today', 'take care of number one', it's difficult to stay focused on the dreams that I had for a bigger impact on the world. 

In my own county, homelessness has just increased a whopping 29%, yet I'm continually concerned about the color of my walls. I say that I care about kids who have no parents, yet you would never know that by the entries in my check register. Rather, my banking statement says quite loudly that I've bought the madison avenue messages hook, line and sinker -  I'm numero uno! 

It's no wonder our nation is fighting over health care reform. Who cares about the other guy - I've got to take care of me and mine! 

I'm guessing that there are others out there like me, who, when faced with the realization that you are not living the life you say you want to live becomes the motivation to do something about it. If so, I'd love to hear from you. Perhaps if more of us started to really analyze our pocketbooks as a statement of our values, we'd actually begin to live the lives we were called to.

What does your checkbook say about you and what you value?

About Friendship...

I had a lot of time to think about friendship this past week while visiting my home town. I had hoped to see several friends while there but ended up falling short of my plans. It reminded me of what life was like in the past when making time for friends was an afterthought.

When I was a 'career' woman and living life, friends were people that could fit in to my schedule. If I wasn't too busy working, shuffling kids, attending seminars or taking well needed vacations, I could make time for them. Larry and I remember meeting one couple that we had really hoped to spend time with so we tried week after week to find time in our schedules to get together. We lived 30 minutes apart but it seemed like an impossible task. It wasn't until we were on vacation - 200 miles from home - that we ran in to them. I think all of us were struck with the sadness of our mutual too-busy schedules.

Our dear friend Gordy used to say, if you have more friends than you have fingers then a) you don't know the meaning of friendship, or b) you are a freak of nature. I never really understood that until I had the type of friends that I think he considered finger-worthy. It took me years to understand what he meant because to me, friends were all of the acquaintances that came and went through the doors of my life. I don't think I would have ever been able to say I had a "BFF" and it was never really clear whether the 'friends' I had picked, had picked me. I think that this is a sad artifact of living an upwardly mobile lifestyle. If friendship isn't part of that plan, then you probably won't find time for it.

I regret that I lived my life this way for far too many years. Coupled with the fact that I didn't know myself well enough to make myself fit for a long lasting and intimate friendship. (Anything less than that is a relationship of casual acquaintance).

Of all of the things I am thankful for, it is learning how important friendship really is in a persons life. Larry and I have always had an incredible friendship between us but it is so important for each of us to have deep bonds with other people. In the process of changing our lives and slowing down, we have finally found out just how sweet having friends to share our dreams, hurts, struggles and joys with can be! Where we used to have great intentions to see our friends, today, we see them. We are doing life with these people and it's made our life so much sweeter. I wish I would have learned this lesson sooner and had been a better friend to those that considered me theirs.

To all of my friends, I'm so thankful for you. I cherish you and I can't imagine life without you!

Jan

These are a few of my favorite things...

Raindrops on roses, whiskers on kittens - discounted shopping and cheaper brewed coffee, these are a few of my favorite things!


It's no surprise for you to learn that I have become a discount shopping enthusiast. It's become a bit of a challenge and a thrill when I find something at a substantially lower price than retail. I'm sharing some of my favorite discount shopping resources in this blog. Please send your own so we can build an empire of discount resources!


www.retailmenot.com - Retailmenot is an online shopping community dedicated to the 'frugal shopper'. It is the most comprehensive site for finding online and store coupons you can find. Regardless of the types of shopping items you seek, retailmenot probably has the coupons. Print them out and start savings. They also offer a site to help make the most of your online process at tips.retailmenot.com. Be sure to read this page before starting to shop.


www.mygrocerydeals.com - I love this site! I have gotten so frustrated in the past thinking that I have found the best deal on pork loin, only to find that the store right next to me had it on sale for .50/lb cheaper. Mygrocerydeals.com solves that problem. You enter your zip code and select from the list of grocery stores available in your area. Their extensive database returns that weeks specials advertised at all stores in your area. It also has a coupon clipper of nationally advertised specials you can print, as well. My favorite feature is the search tool. Let's say you are looking for the best deal on Greek Yogurt. Enter 'greek yogurt' in to the search field, and you'll get a return on all of the specials at stores in your area. It's very cool and has proven to be accurate 100% of the time when I've used them. TIP: If your store is not activated in their list, send them an email. I did this and within 24 hours my store was added.


www.e-mealz.com - E-Mealz is a service that Dave Ramsey has recommended on his radio program. For as little as $5/month, E-mealz helps busy people plan weekly meals with ease. After entering your grocery store of choice, identifying how many people you are feeding and selecting the type of meals you enjoy (i.e., low fat, low carb, etc.), their site will return complete meal plans with shopping lists at your store. You'll get recipes with instructions for your specified number of eaters and an aisle by aisle shopping list. 


www.peterjamescoffee.com - I have to thank my dear friend Shelley for this tip. Years ago Shelley shared Peter James with me and I've been a fan ever since. Peter James is a wholesale roaster in the East bay of California. They roast their coffee and sell it at wholesale pricing, provided you meet their modest requirements. Not only is this the best priced coffee (for blends, premiums or organics) but it is the best tasting that I've found. The coffee industry as a whole plays a trick on us. They sell us coffee in this handy (12 oz) bags making us think we are getting a pound of coffee for that hefty $8.00/bag. I always thought I was paying about $8-$9/pound when in actuality I was paying around $12.00. Peter James actually sells you coffee in one pound increments and on average, you'll pay about $6.50/pound. The product list is extensive and you'll find something for all tastes. They require that you purchase a minimum of one 5 lb bag or 2 2 lb bags to qualify for wholesale pricing. There is a .20/pound grinding fee. Mark is the roaster and is likely to answer the phone if you call. I just placed an order last Tuesday, they roasted it on Wednesday and I received it in Oregon on Friday! I love these guys!


I previously mentioned some of my other favorites but here's a re-cap of some of my weekly visits for grocery and other items - 


Dollar Store (there are lots of these out there under different names) - remember them for basic sundry items, birthday cards and more


Bi-Mart - This is a co-op but I've never found them to hold me to joining. You have to shop there regularly to find the gems but when you do, they typically beat any other pricing. Think of this is a mini-Walmart - you can get anything.


Craigslist (www.craigslist.com) - Probably my favorite place to shop - especially the 'Free' area. Again, create an RSS feed and you'll get notified with new postings. If you are really ambitious, pick up some of these free items and sell them. It's similar to flipping houses but not as hefty an investment!


Habitat for Humanity Re-Store - Larry's blog will go in to great detail as to the amazing finds we've found here. In addition to getting free or really underpriced items, you are helping your local community build homes for deserving families. They also offer a senior discount of 20% (at our store) - this makes the discounts absolutely unbelievable. You can find furniture, building materials, plumbing supplies and art! There is also something very rewarding about re-using materials. We feel like we are helping do our part to limit the waste in our world each time we shop here. Give it a try!


Let me know some of your discount secrets and I'll share them with our readers. At a time when everyone is trying to save, these tips go a long way. Happy savings!

7 Debt Solutions

If you are at the beginning stages of your debt problems and looking for options, you are at the point we were about three years ago. It was becoming clearer to us that we had run out of our own 'creative' solutions to solving our debt problems and we needed professional help.

I had worked for a Financial Services company just prior to this time in our life so I was fully aware of the options. I just wasn't able to settle on one that we hadn't already tried or that we could get behind for personal & ethical reasons. I'll go in to detail as to our reasoning as I review each of the Seven Most Common Debt Solutions.

1) Do Nothing. Believe it or not, this is the position many people take. They are under the stress daily but they are paralyzed to the point of doing nothing. Clearly, this position only makes the situation worse. Creditors do not stop calling, the debt continues to rise and so does your stress level. 

OUR POSITION - We tried this one for almost a year - hoping that conditions would just miraculously change. The truth is, you got yourself in to this mess and you'll have to do the work to get out of it. We finally got to that point and recognized that it was going to take work and personal discipline to turn this mess around. It was also going to require a change in heart. We had to become different people as it related to our views of money, time and purpose.

2) Credit Counseling. Credit Counseling companies are structured to act as a facilitator on your behalf. You sit down with them, review your debt and come up with a financial plan that you can live with. Once you've agreed upon a budget, they will combine all of your debt in to one payment, roll in their fees and then you mail your payment to them monthly. In turn, they will contact all of your creditors and attempt to negotiate lowering your interest rates in order to lower your monthly budget. In 2000, the Better Business Bureau (BBB) had only 404 registered complaints with all credit counseling companies combined. At the time, these companies were primarily non-profit debt help organizations and genuinely inclined to provide a human service. What about five years later? In 2005, the BBB had 1286 registered complaints with credit counseling companies (many for profit), roughly 190 per year over five years. There are still good companies out there but do your research before engaging.

OUR POSITION - We had already contact all of our creditors and had some success lowering our interest rates. We felt that this was something we could do without the help or fees of a Credit Counseling service. Additionally, credit counseling stays on your credit report for about seven years. This was no better than the damage done by Bankruptcy so we ruled this out as an option.

3) Debt Consolidation. Debt consolidation is the process of rolling all of your debt in to one consolidated loan - typically secured. The advantages are clear; one payment rather than multiple, typically a lower interest rate and one creditor to manage. The disadvantages are worth seriously considering; with one creditor, the temptation to start using your cards again is huge; most consolidation loans originate from your mortgage - this will spread your debt out to 10-25 years and removes real equity from your home; debt consolidation loans are secured debt so if you do have difficulty making the payments, you risk losing the asset.

OUR POSITION - The thought of going out and getting yet ANOTHER loan to solve our loan problems seemed crazy. Additionally, we had no equity left in our home from having already borrowed from it in the past. We concluded that we had not yet learned the root cause of our spending problems and we risked keeping ourselves in trouble by seeking another loan. Thus, we ruled this one out.

4) Debt Settlement. The company that I worked for specialized in Debt Settlement. They were very successful at decreasing peoples debt and getting them in a better financial position (at least at first glance). Debt Settlement is the process of negotiating down your debt with your creditors. Again, this is something you can do without the help of a settlement company but typically these firms have better success. The process is as follows; you tell the debt settlement company what you can afford to pay towards all of your debt on a monthly basis, they review all of your debt and determine whether they believe they can negotiate the debt low enough (including their fees) to accommodate that monthly amount. They typically can negotiate your debt down 40-50% of what is owed. The typical repayment plan takes about 33 months. The risks are; say good bye to your credit - they will ask you to stop making payments for at least three months to all creditors so that they are more likely to negotiate; the credit calls will increase and can get quite nasty and uncomfortable - the debt firm will give you great tools to help avoid this but your best bet is to change your phone numbers! Also, they might not have success negotiating all debt so the 'plan' can vary. Finally, you will be hit with taxes on the amount of debt forgiven by a Debt Settlement plan - be prepared for this at tax time. Plus the amount forgiven remains on your credit report as 'unsettled'.

OUR POSITION - This was the plan we had most difficulty with. We just never felt right about asking our creditors to lower the amount we owed them, especially by half! We made each purchase with the intent of paying for the items, not doing so felt like stealing.

5) Borrowing the money from friends or family. Clearly, our friends and family love us and they want the best for us. While watching us squander our money was difficult for our family to watch, they cared for us and hated seeing us in financial duress. Therefore, we accepted loans from our parents, friends and colleagues. We regret this most. Defaulting on an unknown face is one thing, but doing this to family - ouch! As I mentioned in my last blog, these loans will be repaid through our bankruptcy but not for 4 or 5 years. Each time I see these people, I'm reminded of how I disappointed them and I regret my choices.

OUR POSITION - We tried this and regretted it so our recommendation is to avoid this as an option.

6) Establishing a personal repayment plan and living within a budget. This is the best option if you can do it. It will require a combination of all of the above options; negotiating your interest rates down, asking for forgiveness on fines/fees, perhaps even consolidating the loans in to a lower interest plan. Finally, committing to living within a budget is the only thing that will secure success for the long term. Acknowledging your bad habits, changing them for good and living differently.

OUR POSITION. We have now adopted this plan for our future. However, three years ago our debt had exceeded two times our annual income (I say this with embarrassment, regret and a good deal of shame). The majority of the debt was IRS in the form of penalties, fines and increased interest rates. We attempted to work with them but all efforts failed. Our hope for ever repaying this debt was lost once we completed a thorough assessment of our situation. Our only option was some sort of personal reorganization of our debt.

7) Bankruptcy - Most people think of bankruptcy as the process of being forgiven from all of your debt and living with the consequences of bad credit for 7-10 years. Actually, that is just one of the Bankruptcy provisions. There are actually three bankruptcy codes; 7, 11 & 13.

Chapter 7 is the most severe, can be used by all individuals and businesses. All unsecured debts are terminated, and are paid if any money remains after secured creditors are paid and after various exemptions permitted by law are claimed by debtors. 

Chapter 13 is typically used by wage earners and small businesses; this delays and reduces amount of payments to creditors over a period of time; this is known as a Chapter 13 Plan, or an individual reorganization. 

Chapter 11 is used by larger businesses, and resembles a Chapter 13, with many more requirements. If all a debtor needs, is a plan to pay off debts, then a Chapter 13 or Chapter 11 is preferable, rather than a Chapter 7, particularly when trying to reestablish their credit worthiness.

All of these plans have their own advantages and disadvantages - all of them will harm your credit for at least 7-10 years. You'll want to weigh the advantages and determine whether the options align with your own ethics and personal situation.

OUR POSITION - Chapter 7 was out for us. Again, we wanted to pay back our creditors. We just needed a plan that would make that possible. We had already damaged our credit and believed no matter what solution we picked, we would suffer those consequences for a while. We opted for Chapter 13 because the plan requires that all debt be repaid at a maximum limit of five years and ALL creditors would be repaid. The process is lengthy and not everyone qualifies. Fortunately, our lawyer was able to structure a five year plan that paid everyone back over a period of five years. The monthly payment is a KILLER but we haven't missed a payment in two years and we are seeing debts resolved! NOTE: In a Chapter 13, all unsecured creditors are paid last and all interest is forgiven. All secured creditors are paid first and all penalties, fines and fees are forgiven (This is what saved us). However, secured creditors do receive interest on their debt at a reduced interest rate of about half.

As you can see, there are countless options and I only identified the seven most popular. My encouragement is to not give up hope, stop the behavior that got you in this place and begin your research. Seek wise counsel and if you believe in the power of prayer, pray. We found that once we sought God's forgiveness and accepted it, we were able to do a 180 in our lives and starting living a life free from overwhelming debt.

We haven't used a credit card in two years and plan to never use one again. We live on a budget and pay cash for things that we planned. The best news of our plan is that we will be DEBT FREE in three years! Just at the time Larry will retire, we'll have no payments. That could have never happened if we continued on the path we were on.

May you find solutions that solve your financial worries and seek the life that we were meant to live!