We Are SUNK - Any Advice?

[MoonpieMomma]

We Are Sunk - Any Advice

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Let me begin by saying that I am NOT a troll. I actually am a poster who has been active on the boards for more than 5 years, but I am so embarrassed by my current situation that I couldn't create this thread under my usual user name. I am so sick and so depressed by the whole situation that I can barely function. I'm crying all the time and don't want to even get out of bed in the mornings. I'm looking for any advice that you can give me.

We applied for a loan through our bank and they denied us. This loan was to consolidate debt and lower our payments so we can make our bills on time. We are in debt way over our heads and I just can't see any daylight. We do not want to "write off" any debt because I believe that we made the mistake and should pay everything back.

Here's some background:
My DH works in the housing industry. He has been employed by the same company for more than 20 years, but as you know the housing market has tanked. What used to be a nice steady income has now become hit and miss at best. Winters here are brutal and the last two years have killed us financially. We don't know where to turn or what to do. Him finding another job isn't really a great option because the job market here is dead. We have been looking and asking anyone if they know of any better employment, but there is nothing to be found. I am so afraid we are going to lose everything.

We have a mortgage that is current - never made a late payment on it.

We have an unsecured loan that we have just recently gone behind one payment on. There is no way we can catch this payment up and it's getting harder to make this payment at all each month.

We have two credit cards that are maxed and closed. Haven't used them in more than a year. We have occasionally made late payments due to having paychecks that were not full checks. We catch them up as soon as we are able, usually on the next month's payments.

We have only one vehicle at the current time because our second car needs work and we can't afford to have the work done. My DH is riding to work with someone and pitching in money for gas.

We only eat out one time per month. We have no satellite/cable/home phone or internet.

We do have cell phones, but with the ages my children are I have to have a way to be in contact with them. This bill runs $100/mo for the 4 of us.

My middle child had to have some MAJOR dental work done in 2009 ($7000)and we don't have any dental insurance, so all those charges went onto the credit card.

My kids are only involved in one activity because we frankly cannot afford anything more. The activity only costs us about $20 per month for the both of them to participate. We have taken so much from them already that I cannot tell them that this has to go also.

We haven't even filled our fuel oil tank yet because we don't know where the money will come from. We make too much to apply for assistace, and I don't much believe in able bodied workers going that route anyway.

I also have medication that costs us approx. $75 per month. This is something that I cannot do without. I have thought about going without, but the results would be disastrous.

We spend approx $400 per month in gas and about $300-350 in groceries. I shop when there are sales and use coupons so I'm not sure what more to do there. With three always hungry teens in the house, it's hard to cut back any more.

Our home is worth $120,000 and our current mortgage is at $50,000. If we could refinance everything into one new mortgage ($100,000) we could pay EVERYTHING off and get back on track. Our one monthly payment would be much lower and we could have a chance to get back on our feet. Where do we go from here? If our bank won't do this for us, is there any hope that another bank will?

Our bills just exceed what our income is at the current time. One payment would allow us to get back on our feet and start over and do things the right way. What do we do?

 

[barbarabini]

My advice:

Do not swap unsecured debt (all the other debt that you have except for the mortgage) for secured debt (debt on your house). Thats a real good way to lose your house.

Right now, you are not in danger of missing mortgage payments. Don't foul that up by adding another 50000 to your mortgage.

The unsecured debts will get paid. Eventually, if they don't like how you are paying, you will get offered a lower interest rate 0% for a year or some other derivation, or eventually a settlement letter. Have you asked for a repayment plan from them? The unsecured lenders can't come after your house, they can only garnish a wage and/or execute on a bank account. That will take years.

If you add to your mortgage, and your having this trouble with the unsecured debt amount right now, your likely to miss a mortgage payment and start to put the house in jeopardy.

 

[FINFAN]

sorry for your situation, sounds like you are doing everything you can to remedy it. I am not advising for or against the re-fi, just going to point out that if you do decide to do it, it would would be logical to do so while your DH is technically employed...but if his salary is fluctuating, not sure if the bank will go for it. I hope things work out for you.

 

[ceecee]

Maybe you can get your meds discounted, ask your Dr or check with the manufacturer. A lot of them do offer discounts if you can't afford it. Have you thought about couponing to save a little on the groceries? They are hiring holiday workers now, maybe you or DH could get some PT work at least. Have you seen a credit counselor at your bank or credit union? Like the previous poster said, don't add more to your morgage.

 

[MoonpieMomma]

At this point there is nothing in a bank account for them to take. I hate this feeling. We are hard-working individuals who believe in paying what we owe. I have asked for help from the creditors but they are refusing any assistance.
One actually told us we have to be behind on our accounts before they will even spean to us about it. Do we let the account go past due just to see if they will help us? This just baffles me.

I keep hearing horror stories about credit counseling. How do we find a legit agency to work with?

 

[Marionnette]

We Are Sunk - Any Advice

--------------------------------------------------------------------------------

Let me begin by saying that I am NOT a troll. I actually am a poster who has been active on the boards for more than 5 years, but I am so embarrassed by my current situation that I couldn't create this thread under my usual user name. I am so sick and so depressed by the whole situation that I can barely function. I'm crying all the time and don't want to even get out of bed in the mornings. I'm looking for any advice that you can give me.

We applied for a loan through our bank and they denied us. This loan was to consolidate debt and lower our payments so we can make our bills on time. We are in debt way over our heads and I just can't see any daylight. We do not want to "write off" any debt because I believe that we made the mistake and should pay everything back.

Here's some background:
My DH works in the housing industry. He has been employed by the same company for more than 20 years, but as you know the housing market has tanked. What used to be a nice steady income has now become hit and miss at best. Winters here are brutal and the last two years have killed us financially. We don't know where to turn or what to do. Him finding another job isn't really a great option because the job market here is dead. We have been looking and asking anyone if they know of any better employment, but there is nothing to be found. I am so afraid we are going to lose everything.

We have a mortgage that is current - never made a late payment on it.

We have an unsecured loan that we have just recently gone behind one payment on. There is no way we can catch this payment up and it's getting harder to make this payment at all each month.

We have two credit cards that are maxed and closed. Haven't used them in more than a year. We have occasionally made late payments due to having paychecks that were not full checks. We catch them up as soon as we are able, usually on the next month's payments.

We have only one vehicle at the current time because our second car needs work and we can't afford to have the work done. My DH is riding to work with someone and pitching in money for gas.

We only eat out one time per month. We have no satellite/cable/home phone or internet.

We do have cell phones, but with the ages my children are I have to have a way to be in contact with them. This bill runs $100/mo for the 4 of us.

My middle child had to have some MAJOR dental work done in 2009 ($7000)and we don't have any dental insurance, so all those charges went onto the credit card.

My kids are only involved in one activity because we frankly cannot afford anything more. The activity only costs us about $20 per month for the both of them to participate. We have taken so much from them already that I cannot tell them that this has to go also.

We haven't even filled our fuel oil tank yet because we don't know where the money will come from. We make too much to apply for assistace, and I don't much believe in able bodied workers going that route anyway.

I also have medication that costs us approx. $75 per month. This is something that I cannot do without. I have thought about going without, but the results would be disastrous.

We spend approx $400 per month in gas and about $300-350 in groceries. I shop when there are sales and use coupons so I'm not sure what more to do there. With three always hungry teens in the house, it's hard to cut back any more.

Our home is worth $120,000 and our current mortgage is at $50,000. If we could refinance everything into one new mortgage ($100,000) we could pay EVERYTHING off and get back on track. Our one monthly payment would be much lower and we could have a chance to get back on our feet. Where do we go from here? If our bank won't do this for us, is there any hope that another bank will?

Our bills just exceed what our income is at the current time. One payment would allow us to get back on our feet and start over and do things the right way. What do we do?

I'm really sorry that you're dealing with such hardship right now.

TBH, if it were me, those cell phones would go. That $100/month would go a long way towards easing your troubles. I know that kids live and die for their cell phones, but you don't NEED them to keep in touch with your kids. Entire generations grew up without cell phones and managed to get by. Your kids could always borrow a friend's phone if they needed to reach you in a dire emergency.

 

[Disneefun]

You say the kids have to have cell phones -- why not get cheap prepaid phones. You can get handsets for $20 at target or walmart and most require something like $20 every 90 days to keep them active. Use them only in emergencies and it may save you some on your phone bill. The kids may hate not having phones that they can use all the time, but tough. Of course, if you're under contract with a provider, it will probably cost you more to get out so it may not be worth it. But before you re-up, I'd look into it.

ALso, it sounds like you just need more income. You don't say if you work, but if you don't can you get a part time job? Can you do something from home? You said DH is in the housing industry. Is DH in construction? Can he take on side gigs building decks, sheds, etc.? Can he get a part time job? I know it's not ideal, but it would only be temporary until you can get caught up.

 

[KennesawNemo]

Your gas cost seems high to me. Do you drive a big car like truck or SUV?

I drove a small sedan. My weekday commute is 25 miles one way. On weekends, I drove about 20-30 miles on average. One tank will last me a week, which is about $35. That adds up to around $150 a month.

I understand your husband is in the housing business so big car is a must sometimes. However, since he is carpooling any way, it might be a good idea to trade it in for a smaller car. Also, if your second car is a smaller one, it might pay to have it fixed and use it on a daily base and you could keep the big one just in case.

 

[sunlover13]

OP - Do you add to the income at all? Can you work? I'm not sure how old your kids are, but if all 3 are teens, can't you find a job outside the home? If not, what about babysitting in your house?

 

[MoonpieMomma]

Honestly, the hardest part is the kids right now. My oldest has been eligible to get a drivers permit for almost a year and hasn't been able to go because we can't afford the bump in insurance. We toyed with the idea that he get a job to help pay for insurance/gas, but haven't found anything that would even pay enough to cover that. If he works 4 hours at a time @ $8/hr, thats $36. If it costs us $20 in gas to get him to work and bac....doesn't make much financial sense. He says he is OK with not driving, but I can see his heart breaking when others his age are driving and he isn't. He didn't ask for any of this mess, yet he is paying a price for it. There are days when I feel like the meanest mother in the world.

 

[Planogirl]

Consumer credit counseling is a free service and reputable.

I would personally get one cheap phone where you pay if you use it and get rid of the cell phones. Is your husband looking for another job? A more stable income might be helpful if you decide to apply for another refi.

 

[ADisneyQueen]

Unless you need a really good phone for work, you could switch to tracfones. We have 3 of them and pay only about $25 a month total for all of them. This is done online at their website. We get 40-80 min. each. My older dd has another phone from at&t that is like a tracfone. She pays about $20-$25 for unlimited texting and some min. for calls per month.

 

[MoonpieMomma]

Our vehicle is a 1998 Ford F150 pickup with 200,000 miles. It gets about 10 MPG. We can't afford a car payment so the gas is killing us.

Our other vehicle is a mini-van, but needs at least $500 worth of work and we just don't have the cash to fix it right now. It is much better on the gas mileage, though. Do we let the unsecured line that we are already behind payments on go another month so we can fix the van?

 

[mom to minnie&mickey]

I'm really sorry that you're dealing with such hardship right now.

TBH, if it were me, those cell phones would go. That $100/month would go a long way towards easing your troubles. I know that kids live and die for their cell phones, but you don't NEED them to keep in touch with your kids. Entire generations grew up without cell phones and managed to get by. Your kids could always borrow a friend's phone if they needed to reach you in a dire emergency.

THIS! When I first read your post it is the first thing that crossed my mind as well. My dd(14) does not have a cell even though we can easily afford it.
She will get one at 16 but it would be the last thing on my list if I were in your shoes. Aside from that, can your kids get a part-time job to help make ends meet? Maybe you should consider food stamps if you are eligible for them. There is no shame in needing and accepting help to help you out
temporarily. That is what we pay taxes for. This economy stinks and we just have to ride it out. Best of luck.

 

[MoonpieMomma]

OP - Do you add to the income at all? Can you work? I'm not sure how old your kids are, but if all 3 are teens, can't you find a job outside the home? If not, what about babysitting in your house?

Yes, I actually work full time and it is good steady work with decent pay. No benefits though.

 

[MoonpieMomma]

Consumer credit counseling is a free service and reputable.

I would personally get one cheap phone where you pay if you use it and get rid of the cell phones. Is your husband looking for another job? A more stable income might be helpful if you decide to apply for another refi.

We are under contract through August, and at this point the charges to back out of the contract would be more than if we just keep the phones until then and then just not renew (which is what we are planning). We are kinda stuck until then.

 

[sissy_ib]

Honestly, the hardest part is the kids right now. My oldest has been eligible to get a drivers permit for almost a year and hasn't been able to go because we can't afford the bump in insurance. We toyed with the idea that he get a job to help pay for insurance/gas, but haven't found anything that would even pay enough to cover that. If he works 4 hours at a time @ $8/hr, thats $36. If it costs us $20 in gas to get him to work and bac....doesn't make much financial sense. He says he is OK with not driving, but I can see his heart breaking when others his age are driving and he isn't. He didn't ask for any of this mess, yet he is paying a price for it. There are days when I feel like the meanest mother in the world.

What about mowing grass/raking leaves/shoveling snow? And it would cost $10 to drive him to work and $10 to pick him up? There is nowhere closer? Even if your car got 10 miles to the gallon that is about 25-30 miles. Where do you live? There is no McDonalds? Where do you work OP?

 

[KennesawNemo]

Our vehicle is a 1998 Ford F150 pickup with 200,000 miles. It gets about 10 MPG. We can't afford a car payment so the gas is killing us.

Our other vehicle is a mini-van, but needs at least $500 worth of work and we just don't have the cash to fix it right now. It is much better on the gas mileage, though. Do we let the unsecured line that we are already behind payments on go another month so we can fix the van?

I say sell the F150 and use the money to fix the van.

I wouldn't go behind the payments on the loan.

 

[sissy_ib]

I say sell the F150 and use the money to fix the van.

I wouldn't go behind the payments on the loan.

Not a bad idea.
Can your husband get a second job in the mean time?
I would say what Dave Ramsey says-deliver pizza, but with a only 10 MPG that makes no sense at a place that makes you use your own vehicle.
Anything else you can sell to raise the money for the van?

 

[kamik86]

I say sell the F150 and use the money to fix the van.

I wouldn't go behind the payments on the loan.

The problem with that idea is it would leave the OP without a vehicle for however long it takes to fix the van. If she lives in an area that you have to drive 25 miles to go to work then there is a good chance you can't be without a car unless your getting someone else to drive you everywhere (I couldn't be without one here)