Ok, not that it matters much, but 3 years ago I was debt free except my house, cars, and student loans. However, due to unforseen circumstances, we got heavily into debt again. Was pregnant and lost a baby in the second trimester in Feb 08. Got pregnant again, miscarried in April 08. Got pregnant again, this baby took. I was on bedrest the ENTIRE pregnancy from 5 weeks on. Delivered her a month early. She was born sick. We found out at 8 mos when she had preop testing that she had a hole in her heart and that was causing some of her issues. Did the surgery. Found out she had severe silent reflux and a severe respiratory infection made up of 3 different bacterias. She had had them since she was born. She had mega doses of antibiotics for three months. Finally she started to get better. The hole in her heart eventually closed by the time she was 2 on its own (Thank God). In the meantime, I was getting sick. After 18 months of seeing specialists, rounds of tests, I was diagnosed with lupus in Oct 2010. Finally have gotten on medication and my condition has improved greatly. Throw in 2 emergency laparoscopies (May 09 and Oct 09) and a major abdominal surgery Nov 10. My husband was admitted to the ICU the same day I had surgery in Nov. He had gotten a virus and had thrown up so much, it threw his electrolytes off balance and caused an irregular heartbeat. The only good that came out of that was he was in the hospital with me at the same time. 
In December 2010, the fridge and dryer died. In January our house went into foreclosure. In February, our furnace died and we had to evacuate the house for a day due to high levels of carbon monoxide. Thankfully my brother in law replaces furnaces for a living and put one in at cost for $1400 (there went our tax check). In March, the washer died. The washer and dryer, I bought as a used appliance off of a one year lease. I negotiated a cash buy price for them ($270 for a 1 year old Duet gas dryer and $265 for a used washer that looked brand new. Sold the old washer for parts for $75). Then I did a 90 days same as cash deal with them. That gave me the chance to make sure the appliances worked well. Did the same for the fridge, but bought that new. I negotiated a cash price and then a 90 days same as cash. I always thought rent a center was not a place that I would go to. I really did get some great appliance deals. They are paid for (except washer, that will be paid in June).
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The point of this is stuff happens. Bad stuff happens. We ended up $60k in credit card debt between the two of us! In the fall 2010 we defaulted on our credit cards. Just couldn’t do it anymore. This is what IÂ have done to get out of this mess (and you can get out of it no matter how deep you are in it). First we called our mortgage holder. We explained what had happened. They wouldn’t help us before we got into foreclosure. In fact, they were quite jerks about it. Once we went into foreclosure, they were all to happy to work out a payment plan with us. This put a stop on the foreclosure IMMEDIATELY. As long as we paid the plan, we would be reinstated as soon as the last payment is done. That payment is in April 2011. We developed a budget with all of our expenses (gas, utilities, payments like mortgage, cars, insurance, daycare, etc). We have more or less stuck to the budget.
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Then we started working on settlements or payment plans with our credit cards. Most of the major ones immediately did a balance liquidatation plan. They report the account as current on our credit report. We get a 0% interest rate and will have it paid off in 1, 2, 3, 4, or 5 years (depending on the card). The one company that refused to work with us was Chase. However, I was able to get a 0% balance liquidation on one card with them for a 8K balance this month. The other card, they served me with a summons (which I found out was not the end of the world). With O6′s help, I have answered the summons (going to file it at lunch today with the court) and I negotiated a 0% interest, no fee payment plan for the balance for 4 years. Most of the cards I was able to get a reduced sum (citicard and BOA were the best) and 0% interest plans. I have letters confirming the arrangements and that these accounts will be listed as settled in full/paid in full on our credit reports. While on these plans, they will also update our accounts as current.
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As each settlement/payment plan was done, I added it to the budget to make sure we don’t go over the budget. I have a folder of all my documentation. I have taken notes on who I talked with, what time, date, and what was said.
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I still have one big card that I am going to settle (5k). I tried to settle with them last fall. However, they took the payment 3 or 4 days early out of my account and caused everything to bounce. I had never bounced a check in my life!! We finally got that all straightened out with our checking account. I cancelled the remaining payment with them for taking money out and blocked them from my checking account. I also sent documentation to them (Barclay’s Bank for the BJ’s Visa) about everything that had happened. Their answer was ooops. I couldn’t get anyone to do anything there. So I am going to play hardball with them. If they happen to summons me to court, well I have all of my documentation. I am sure we will work out a small settlement than what is owed on the card. I also still have several smaller cards in collections. They are with our favorite unsavory CAs. So I am not paying them unless I get a PFD and have it in writing. They are last on my list.
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Anyway, at one point I was considering bankruptcy. I think that as long as we stick to our budget, we won’t have to do that. I still have some work to do on some small collections and the barclay’s card. My plan is as each card is paid off, I am going to take that money and put it towards another card. Both cars will be paid off in 22 and 23 mos. Our daughter mentioned above will be starting kindergarden in three years. Which means that I would have an additional $700 a month from daycare that could go to card payments too. I figure in 3 to 3 1/2 years we will be debt free again. At least this is what I can project (heck, we have already replaced all of the major stuff in the house, lol). In the meantime, I have opened an unsecured Orchard Bank card with a cl of $320. Plan to use it only to put a tank of gas on it each month and pay it off in full each month so I am building good credit history again in the meantime. After each card is paid off, I plan to goodwill the heck out of them to get the lates removed or whatever.  I was successful in doing that a few years ago when I had a couple of 30 day lates (back in college).
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I just wanted to let people know that no matter how hopeless it seems, you can get back on track. There are people here that have been down this path for whatever reason and are extremely knowlegeable and helpful. I’m looking forward to when all of this mess is behind me.