May 2009 Debt Report
For the record, there was no April 2009 debt report. I didn’t have time to get it written.
Starting Balances calculated post-bankruptcy (May 2008):
- Debts excluding student loans and 1st mortgage: $38,707
- Plus debts incurred between May 2008 and March 2009: $8,583
- 1st mortgage balance: $117,803
- Student loans: $48,774 $80,215
- Total: $213,867 $245,308
Current Debt Balances:
- IRS: $2,221.03 (TY 2007)
- LDR: $2,737.00 (Louisiana Department of Revenue, TY 2007, no payments scheduled yet)
- Chase HELOC: $4,537.52
- CFCU Visa: $5,035.04
- Capital One HELOC: $21,606.76
First mortgage balance: $115,303
Debt Balance excluding co-signed student loans and first mortgage: $35,932 $36,137
Total debt including first mortgage, excluding student loans: $151,630 $151,440
Student Loans:
- Co-signed student loans, approximate balance: $48,774 $80,215 (found out the new balance when my attorney checked my credit report. No letters I’ve received add up to this much. Attorney is checking on it).
Total balance including 1st mortgage and student loans: $200,404 $231,655
Change since highest balance ($245,308 starting May 2008): $13,463 $13,653
Discussion
A lot has been going on since March. Details below.
Bankruptcy Update
The only thing I’m waiting on right now to send my bankruptcy case to the trustee is my 2008 tax return, which will be done in the next few business days.
My balances are different from what I thought based on my credit report. What was reported to the credit reporting agencies isn’t the same thing that I received from the debt collectors. It doesn’t matter, the debts get wiped out anyway. I’m told it’s very common that the letters and the credit reports don’t agree. They are in the same ballpark, except for the student loan. That was significantly higher than anything I’ve been sent or that I cosigned to borrow.
My attorney is checking into bankrupting the student loans since they are private, I cosigned for them and didn’t borrow the money directly for my own or a family member’s education. If I can get them off my debt list, that will be great. If not, oh well.
Laid Off
I’ve technically been laid off again. The tutoring company I work for closed as of June 1 and the owner didn’t tell us until May 21. The company was very profitable, but she and her husband made a family decision that she would start working on his business because it makes more and takes less time away from their children. I’m very busy getting my own clients, and the former owner will continue to give out our contact information to potential clients.
The good news is I get a big pay raise, anywhere from $35-$45 per hour, nearly double to over double what I was making ($20/hr). The bad news is I have to do all the back end work dealing with clients, which may be more time-consuming than I like. There are other companies I can work for, but now that I have a client list, other potential clients and plenty of contacts, I plan to continue as an independent tutor unless the back office work is not worth the money I’m making. I doubt that will happen because I can streamline my back office a lot more than my former boss. I have more computer and internet tools to make things easier and more automated.
Online Work
With Hurricane Gustav, the messed up school schedules, and all the extra tutoring I did this year, I haven’t spent nearly as much time on my blogs or online business. But they are paying off better passively than ever before. My niche sites are making money with very little work on my part. Now that it’s summer, I’ll be able to spend more time on the sites that are paying and branch out into those niches more.
My plan is also to work on my own products so I can keep all the money I make from sales (minus taxes of course). I’m working on an ebook and a podcast. Video will come a little later.
I am looking into setting up a membership site, but I haven’t found the right niche with sufficiently low competition that would attract enough paying members to be worth the time. It wouldn’t cost me much money, only $10 more per year for another URL.
April and May Income
Passive online income:
- Affiliate Sales Commissions: $150.55
- Advertising: $111.92
- Services and active sources: $0
- Total online income: $262.47
I will be doing some active online work as well to increase my income. I have friends who need work on online marketing for their brick and mortar businesses.
Tutoring:
- Company: $2,780
- Private Students: $50
- Total tutoring: $2,830
Total Income: $3,097.47
On top of my income I also receive child support of $400/mo.
Online Income Discussion
Common wisdom in the blogosphere and in internet marketing circles is if you can earn $100/mo with your online business, you can earn $1000/mo. All it takes is continuing working on it and developing a few of your own products and/or starting a membership site. The key element is consistently working on growing traffic to your sites.
If I don’t put up another site but keep producing content for my existing sites and marketing them, I will start making $1000 in a few months. If I want to increase my earnings from $1000 to $5000, it will take a lot more effort up front; some new sites in either new niches or profitable extensions into current niches.
If I can find a good niche for a membership site, get 200 subscribers and charge $27/mo per member, I’ll make $5400/mo. If I find a niche willing to pay $47/mo per member, I’ll make $10,800/mo. I’ll have to pay taxes out of that, as I do now on my other income.
Over the summer, I tutor fewer days/week so I have more time to work on marketing current sites, work on more niche sites and start a membership site if I can find the right one.
Conclusion
The online work will have to come after doing everything I must get done for tutoring.
I will be glad when my bankruptcy is over. Then I can focus on work and starting over.
