Welcome to Chez Cliff!

With my financial life completely in ruins and my life out of control, it was time to take action.

A suggestion lead me to the credit union, inquiring about a Consolidation Loan.  Such a loan was completely unknown to me.  Completing the application, the realization hit.  I was a smart guy, an educated guy.  None of that mattered.   With my current credit situation I probably couldn’t qualify for a library card.

The credit union offered their protection.  Their conditions were steep.

• No collateral meant this would be a personal loan.
• My credit score was negative jillion. My interest rate would be 16.9%.
• Each paycheck would be garnished before it appeared in my checking account.
• Every credit card account must be closed. This would be done in the presence of the Credit Union lender.

My only choice: how much to be deducted from each paycheck. Initially, a paltry amount like $400 per month was proposed.  This would take decades.  The shortest repayment period: 18 months. That monthly payment would leave me exactly $1200 to live on. With rent at $700, suddenly $500 is suppose to cover car payments, student loan payments, gas, insurance, food . . .

I chose to do the hard-time: 18 months.

Lady Fortune is an odd duck. Sometimes with a sense of impeccable timing.

The same month the consolidation loan was processed, the lease expired on my GM product. Buh-bye. My roommate sold me his college car for $2000. Where did I find $2000? My roommate started a consulting company. For the next three months, I was slave-labor.

My new car, affectionately called the “Grocery Getter“, was clearly designed for people under 5 foot 6 inches, forced my head to constantly bend to the side.  At 60 mph, its top speed, the hatchback would fly open flooding the interior with exhaust fumes.

My deferment with student loans had been all used up.  They did offer however to charge “interest only” for 12 months.  On month 13, my payments would be higher than normal but the loan would be paid off in the same amount of time.  I agreed.  I waited until 6 months into the loan payback before activating this.

But really these sacrifices were nothing.  The hardest thing during those 18 months: forced to be a social recluse.  No spending cash was available.  Dating life: Gone.  Social Life: Gone.  My finances were down to the wire BUT bills were being paid.

The only part of me that remained intact: my hope.  Creditors could not touch it or take it away.  Each month that passed was another month closer to freedom.  I kept telling myself:  Just hang in there.

The last payment into the loan was numbing.  True, it was the last payment.  But I couldn’t celebrate.  It almost didn’t feel real.  

It was actually the next paycheck, when the huge automatic deduction was no longer present.  At that moment, my crawl through 18 months of fowl servitude finally ended.  I was filled with so much excitement that I could barely sit still or hold a thought in my head.

Hope is a good thing.

It wasn’t long afterwards that I confided in someone my fear that I would once again fall into the debt trap.  My only knowledge of money: spend it.  With that plan, surely the same fate would be suffered as before.

“Cliff, have you ever heard of Rich Dad, Poor Dad?”

And now you know . . . the rest of the story.

Last week, Allison’s inaugural entry sent me down the path of memories. Long before I was purchasing duplexes, handling $50,000 renovations, jetting off to Paris two or three times a year . . . a time existed when I was stupid.

Ten years ago my diet consisted of shake n bake and instant potatoes. Surfer dude appearance, though I never surfed. My entire life was dedicated to working for the man, giving up 10 to 12 hours a day. My existence was for that next promotion or pay raise. My objective: Work until Death came knocking at my door.

My financial intelligence: if a dollar was earned, two were spent.

I was a completely different person.

Immigrating to California back in 1998, my student loan and car loan accompanied my $18,000 credit card debt. A year and a half later, my credit card debt reached $28,000.

One month, I sat down to pay the bills. When the money was all gone, a stack of unpaid bills remained. A horrible feeling came over me. Which bill gets paid and which gets ignored? Try as I might, some bills went unpaid.

Then it started. Phone calls. Threatening letters.

Sleepless nights were nothing new to me. In college, many nights passed, filled with fret over final exams, final presentations . . . but having a “Debt Night” . . . those were longest nights of my life. The following morning was always around the corner. With it came a new barrage of phone calls and letters.

Letters piled up from a dozen collection agencies. Each saying the same thing: Your ass belongs to me.

The bank called one day. My account had been overdrawn. Overdraft fees piled up. By the time my paycheck made it into my account, nearly $100 would be off to pay these fees. Every payday morning, a $40 withdrawal was required. I couldn’t take the chance my debit card wouldn’t work at the gas pump that same afternoon.

Terrible thing, living in fear. Desperation drove me to believe everything the collections people told me. I stopped answering the phone. Letters went unopened.

There was a harsh truth to face: No way was I going to make it.

That’s how it came to pass that in the 9th month of the year 2000, my 18 month crawl out of the debt hole started.

Until tomorrow.

It happened again. And it continues to happen.

Without getting too nutty, my belief system does include some kind of intelligent being. Whether you choose to call him God, Allah, Buddah, or Willie Wonka.

Because of this intelligence, my belief system also concludes that everything and everyone is interconnected. For lack of a better term: karma. What you put in is what you get out. The golden rule: Do onto others what you would have them do onto you.

Whoever is in charge of dispensing karma has their buttons reversed. When you do something good, they are suppose to push the “good karma” button. Now just to screw with my head, I do one thing and the “bad karma” button is pressed.

Starting at the beginning of the year . . .

The furnace was burning, even when not active. The contractor fixed the pilot light, then turned the unit off. No heat for 4 days in mid-January.

Heater is turned on; water heater goes out. Water heater gets replaced.

New refrigerator gets delivered, installed. Finally the stove gets connected; water heater goes out.

Water heater gets fixed; refrigerator starts making horrible knocking noises at 2 a.m. Not at 8 p.m. or 4 p.m. or 12 p.m. but 2 a.m. Repairman makes a visit but cannot fix it.

I install a bathroom door, paint it and install a door knob. Plumbing completely backs up. I put on my overhauls and butt crack, became a plumber and fix plumbing problems.

Painters arrive to paint the house. Television suddenly loses sound.

Repairman returns to fix the refrigerator. Internet is suddenly lost.

What could I possibly be doing to cause all these karmic failures? I don’t sell crack to toddlers; I don’t trip little old ladies; I don’t set kittens on fire . . .

As the fence faces repair, I’m now wondering what will break as payment for the repair.

Here is something to share with the class.

Habitat for Humanity (HH): building homes for the financially challenged. Worthy cause. Another side exists however to this fantastic and altruistic campaign.

Most times: house flippers go into a house, do demolition work, clean up the mess and have a dumpster haul everything away. An easier way may just exist in your area. Considerably cheaper, tax deductible, significantly faster.

ReStore the flip side to HH will come to your project, take everything you are willing to donate, and give you a receipt. Old kitchen cabinets: they’ll take them. Appliances not worth much? They are to ReStore. The previous occupants left behind furniture? Call ReStore.

They will take everything they need, free of charge. From what the gentlemen told me, they will even take it from the walls. Afterwards they give out a receipt for your taxable donation.

ReStore then resells these items to the public at a drastic discount. Wandering around their store, new shower heads were between 50% and 70% off what I paid at Home Depot. Kitchen sinks, bathroom sinks, wall cabinets . . .

The proceeds from ReStore go to support HH.

ReStore seems to be scattered around the US. Oklahoma, Texas, Arizona

The next logical question: could one of my projects be rehabbed using ReStore inventory? Just looking around the store: probably not. If the rehab was a rental unit however I would seriously consider ReStore. When all appliances are 50 to 70% off, new kitchen vanities 80% off

This just landed on my desk last week. If someone out there feels like calling them on their next project, please report back or write a blog entry. Several other people I know have already been contacted and they will try them out.

Wheels in motion.

With the decision to sell, and Income Tax Refund, the last remaining items are being crossed off.

Painting: Risking life and limb, the front of the house was painted just for show. The rest: ignored. This last weekend, the painters arrived to finish everything. And finish they did. The houses look great. The back house, with all it’s imperfections, almost appears new. To their credit, they worked during the 90+ degree temperatures and on a Saturday.

Fence: During the initial renovation, an 8 foot section of fence . . . disappeared. That is getting replaced.

Yard Cleanup: A bunch of material was left when finishing up the front house and back house. That’s scheduled to be carted off this week.

Beyond that, everything is little stuff. Some touch-up paint in the bathroom, installing ceiling exhaust fan, hanging screen door, washer and dryer . . . but nothing which can be used to prevent the houses from entering the market.

It is annoying to just “talk” about this without being able to show photos. When my refund arrived, serious consideration was given to purchasing a replacement camera. But the money should, rightfully, be invested into getting the houses ready for center stage.