Financial nightmare UPDATE!!!!!!

First of all, I'm sorry to hear you are in a situation like this. I too was in a financial mess and it's a nightmare, so I totally understand. DH's business is in a slump but he won't get out, I hope you find some answers and the creditors will reconsider in working with you.

Another board to check out is www.creditboards.com
 
He drives a 92 and I drive an 02. We do not have fancy cars. Selling a car or gold is not going to bring in $65,000. We thought of selling the house but in this market it could take a year. I can't pay 30% interest for another year...it is throwing away money.

No selling a car is not going to bring in 65,000. I thought you might have new cars.
I know selling old gold wouldn't either. I was thinking every little thing might help -you know just to get you a little ahead.
 
I would not use any old debt company, only call Consumer Credit Counseling. they are the only legit consolidators out there. I called them once and they were very helpful and sent me lots of information. Luckily I never had to use them, my husband was able to get us on CC payment plans with very low interest - like 1-2% - on his own by calling and telling them this was their only chance to get the money. We aren't allowed to use the CCs anymore, but that's fine - we're not planning on ever using them again anyway.

I would also be very wary of doing a refi. My husband has been working on so many foreclosures recently, it's really a sad situation.

Good luck - you will find something that works for you!
 
I will be the lone voice and say talk to a bankruptcy lawyer.

Bankruptcy is there for people that have been put in your situation, loss income, illness, etc.
$65,000 is a lot of money. You guys are already working 2 jobs each. You can only be stretched so thin.

I would think long and hard about the refi, just because of the housing market right now.
That is why I suggest just talking to a bankruptcy lawyer. Doesn't mean you have to file, just see what your options are.

I know people look at people who file as evil or people who don't know how to manage their money. That isn't always the case.
I had a good friend who had to file, after her loser of a ex-husband left her with a lot of debt. I even went with her to the lawyer. I helped her research debt help and bankruptcy. I learned a lot. Yes, there are some people who abuse the system, but there are people there who need it and should be able to file without the shame.

I am not saying you need to file, but I would suggest talking to a lawyer. They will usually do the first meeting for free. The good lawyers will tell you honestly if you should file or not.
There are a few options with bankruptcy also, one is where you pay back X amount of your debt and then it is done.

You really should look into all options openly including bankruptcy and then decide what is right for YOUR family.

GOOD LUCK!!
 


Second, are you sure it will take a year to sell the house? Some markets aren't as slow as others, especially if your house is priced right and is in good condition in a desirable neighborhood.

This is true, I got a contract on my house after only 20 days on the market (about 10 days ago).

I don't have alot of advice, only lots of :grouphug: .

I took my my to CCCS a few years ago and they were great. I don't know if they'll let you keep a CC or not. Mom didn't have any more cards that were still open at the time so it didn't really apply to her.
 
I will be the lone voice and say talk to a bankruptcy lawyer.

Bankruptcy is there for people that have been put in your situation, loss income, illness, etc.
$65,000 is a lot of money. You guys are already working 2 jobs each. You can only be stretched so thin.

I would think long and hard about the refi, just because of the housing market right now.
That is why I suggest just talking to a bankruptcy lawyer. Doesn't mean you have to file, just see what your options are.

ITA!! It's called "Bankruptcy Protection" for a reason. OP is in the exact type of situation bankrupcty is intended for, rather than the thousands who have taken advantage of it to walk away from debt as a result of overindulgence.

Good luck, OP -- I hope you can find a way to get through this.
 
He drives a 92 and I drive an 02. We do not have fancy cars. Selling a car or gold is not going to bring in $65,000. We thought of selling the house but in this market it could take a year.

I totally understand what you're saying about needing 65,000, but try to rethink it as little steps. Sure, a couple hundred for old gold is a long way from 65,000, but it's also true that every little bit helps. Anything you can MAKE money on can allow you to put money somewhere else. Selling an 02 car and driving a clunker may also free up some cash to put towards the debt.

I think most people feel overwhelmed when they think of the big number, but do better when they break it down to how much extra they can put towards debt THIS month.

Anyway, glad to hear that DH is doing better. Good luck!
 


I have been in your shoes - and it is not an easy place to be....My husband had cancer 20 years ago and a lot of the expense was considered to be "above reasonable and customer charge" so therefore was not covered by our insurance. Refinance the house and be done with it.....you will recover we did and our not cover medical bills were in excess of $200,000.....Look at it this way you can take the interest paid on the refinance off on your income tax - credit card interest you cant. A little prayer goes up for you!!:hug:
 
I really hate the idea of rolling that unsecured debt into your mortgage. It's just a bad idea to move unsecured debt over to a secured debt. I your case, I really think it's a bad idea.

For one, your DH has had health issues....what if he has a relapse or complication of some sort? He's a contractor....not exactly a secure job title these days with the worst housing market in the past 50 years. And so if DH gets sick again, you risk losing the home. If he can't find work or hours are cut as a contractor...you risk losing your home.

And finally, if you were actually able to get a HEL that takes you up to 95% of your home value, I can't imagine that the rate is very good. And I'm wondering if you were pre-approved for that loan because not many banks are underwriting home equity loans taking you up to 95% loan to value these days.

If you're both already working two jobs and you can't meet those minimum payments (or barely), I can't imagine how you turn it around. I see two options....sell you house, pay off all debts and rent until you can get back on your feet. Or speak to a bankruptcy attorney.

I would *not* roll that debt into your house though....
 
ITA!! It's called "Bankruptcy Protection" for a reason. OP is in the exact type of situation bankrupcty is intended for, rather than the thousands who have taken advantage of it to walk away from debt as a result of overindulgence.

Good luck, OP -- I hope you can find a way to get through this.

I agree also and I'm about as anti-bankruptcy as a person can get.

But you know what? when credit cards start acting like this they are just begging for it. A 33% interest is simply ridiculous.

Do I agree that you should pay back the $65000? yes, right up to the point where they make the interest rate so high that a normal person has no chance of paying it. They are drowning you with greediness and at this point I have to go with --- number #1 priority is to protect yourself. Giving up your home equity is not protecting yourself.

I'm really against you putting your house up for play in this circumstance. Right now, you have a bit of power here with these credit card loan sharks. You can call them up and say, "get reasonable or get nothing." If it were me, I don't think I'd give that up.

Good Luck.
 
In todays market, I think your best bet is to either sell your house, or opt for bankruptcy. I think refinincing can really get you into more of a pickle with the way the market is. I think the best bet is to contact a financial advisor to ask their opinion.
 
If anyone else gets in this kind of situation, go talk to your doctors and the hospitals FIRST BEFORE you put it on the credit card. Did you have insurance? Doctors and hospitals will often negotiate on your bill if you show them true financial need. I've known doctors who have treated people for free or close to it, because of their true financial need. Also, does your church know what is going on? Many times our church takes up money for cases such as these.
 
I really hate the idea of rolling that unsecured debt into your mortgage. It's just a bad idea to move unsecured debt over to a secured debt. I your case, I really think it's a bad idea.

For one, your DH has had health issues....what if he has a relapse or complication of some sort? He's a contractor....not exactly a secure job title these days with the worst housing market in the past 50 years. And so if DH gets sick again, you risk losing the home. If he can't find work or hours are cut as a contractor...you risk losing your home.

And finally, if you were actually able to get a HEL that takes you up to 95% of your home value, I can't imagine that the rate is very good. And I'm wondering if you were pre-approved for that loan because not many banks are underwriting home equity loans taking you up to 95% loan to value these days.

If you're both already working two jobs and you can't meet those minimum payments (or barely), I can't imagine how you turn it around. I see two options....sell you house, pay off all debts and rent until you can get back on your feet. Or speak to a bankruptcy attorney.

I would *not* roll that debt into your house though....


I'm going to second this. Do not risk your house. Even if you have to declare bancruptcy you can recover.
 
I will be the lone voice and say talk to a bankruptcy lawyer.

Bankruptcy is there for people that have been put in your situation, loss income, illness, etc.
$65,000 is a lot of money. You guys are already working 2 jobs each. You can only be stretched so thin.

I would think long and hard about the refi, just because of the housing market right now.
That is why I suggest just talking to a bankruptcy lawyer. Doesn't mean you have to file, just see what your options are.

I know people look at people who file as evil or people who don't know how to manage their money. That isn't always the case.
I had a good friend who had to file, after her loser of a ex-husband left her with a lot of debt. I even went with her to the lawyer. I helped her research debt help and bankruptcy. I learned a lot. Yes, there are some people who abuse the system, but there are people there who need it and should be able to file without the shame.

I am not saying you need to file, but I would suggest talking to a lawyer. They will usually do the first meeting for free. The good lawyers will tell you honestly if you should file or not.
There are a few options with bankruptcy also, one is where you pay back X amount of your debt and then it is done.

You really should look into all options openly including bankruptcy and then decide what is right for YOUR family.

GOOD LUCK!!

I agree! You don't wan't to go even further into debt by refinancing your mortgage and risk losing your house. My DH works in finance and he said that when they are looking at a person's credit/financial history, it looks worse for someone who does the "Credit Counsiling " than if they filed bankruptcy.
 
If anyone else gets in this kind of situation, go talk to your doctors and the hospitals FIRST BEFORE you put it on the credit card. Did you have insurance? Doctors and hospitals will often negotiate on your bill if you show them true financial need. I've known doctors who have treated people for free or close to it, because of their true financial need. Also, does your church know what is going on? Many times our church takes up money for cases such as these.

That is great advice for the medical bills.

But it doesn't make up for lost income and pay the electric bill or buy the groceries while the business owner is unable to work. When you own your business, there is no such thing as paid sick leave.
 
I would not use any old debt company, only call Consumer Credit Counseling. they are the only legit consolidators out there. I called them once and they were very helpful and sent me lots of information. Luckily I never had to use them, my husband was able to get us on CC payment plans with very low interest - like 1-2% - on his own by calling and telling them this was their only chance to get the money. We aren't allowed to use the CCs anymore, but that's fine - we're not planning on ever using them again anyway.

I would also be very wary of doing a refi. My husband has been working on so many foreclosures recently, it's really a sad situation.

Good luck - you will find something that works for you!

I agree.. Also the card he wants to use for the company do not add to the plan. You not have to add all of your credit cards.

I have very positive things about http://www.myafs.org/.. they are formally genus.org. I used them as well as a few friends and I have no complaint. They were able to lower the interest on my credit cards while I paid them off. Yes, those cards were also closed.

You will make one payment a month to the ccc and than pay the creditors. I never had a problem with payments being late or any issues.

Any other questions just email me.

Best of luck to you and your family. :grouphug:
Just leave off one the one
 
That is great advice for the medical bills.

But it doesn't make up for lost income and pay the electric bill or buy the groceries while the business owner is unable to work. When you own your business, there is no such thing as paid sick leave.

Which is why buisness owners and self employed people should always build in disability insureance into their business plans and operating expenses. Again, no flame to the OP, hindsight is 20/20 but anyone out there that is reading this, regardless if you are employeed by a company or own your own, get insurance! If you own your own business, it might be called something else, like "income replacement insurance", it's slightly different because traditional disability pays out based on your salery, but it's essentially the same thing, talk to your insurance agent about it, they can point you in the right direction.
 
In Charge is a reputable company. We used them a few years ago when credit card debt was getting to be a problem. We have since quit using cc's. Anyway, In Charge helped us reduce our interest rate on our two cards to 9% from 28%. We owed about$8,000 in on our two cards, and I know we couldn't have paid it off if it weren't for In Charge. BTW, we were also in debt due to medical problems; I had emergency surgery and had to quit work for a while. Medical problems can ruin your finances!
 
Thank you all for such wonderful advice and kind words. I was very afraid about posting this. I am trying to avoid bankruptcy because I feel it is our debt and we should pay it. Our house payment with the refi will be $370.00 a month more then we pay now. A small amount in comparison to the payments we are making for the credit cards. Our cars are paid for so I really don't want to sell them. I don't want to buy a clunker and then have it break down. I contacted CCCS and they are not available in my state. I do like the tax advantage with the refi. I hate to ruin our credit because I know credit affects ayuto insurance premiums. A refi will raise the credit score. My mortgage guy is certain we will qualify because we have been there for 13 years and never a day late on our house payment and our income is good enough for the loan. I think I will follow everyones advice and see where each option leads me. I can't wait until I have made a decision and begin new. My DH has a clean bill of health PTL.
 
OP, first of all, hugs to you both- I know this may seem like an insurmountable task right now, but maybe if you can break it down into smaller pieces, it will seem more manageable.

First of all, forgive me if this is a dumb question, but do you have a working monthly budget? I know you said you live within your means, but how willing are you to live below your means for a little while? DH and I have been doing a Total Money Makeover since Jan 1, and we were surprised at places we cut our monthly budget that we never thought of before. For example, we don't eat out more than once a month now, we cut back on cable/phone/internet bill by calling the company and asking for a price break, we changed cell phone plans, we lowered our car insurance, etc. You may have some "found" money there.

I don't think anyone has mentioned it yet here, but I would really recommend going to a library and checking out the book Total Money Makeover by Dave Ramsey. It really isn't rocket science, but he is very motivating to a lot of people looking to get rid of their debt. He also has a radio show that you can call into and get free advice on your situation.

Also, before you refinance, I would look at your debts one by one on paper. How many cards are the $65,000 spread out on? Which one has the lowest balance, and how fast could you pay it off if you concentrated on just that one? We had originally thought about refinancing, but once we sat down and really crunched the numbers, we will be much better off by paying off the smallest debt first, then using that payment to snowball onto the next lowest one, etc.

I wish you all the best- financial issues can really be a burden on everyone. I am glad dh is doing well with his health, and it sounds like you both will work great together to get out of debt.

Lisa

PS- I frequent another board that uses Dave Ramsey's principles. I am not sure if I can post the link here, but if you want to pm me, I will gladly share that with you.
 

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