Overextended and Falling Behind

[wannabedebtfree]

After sharing our situation, a lot of you pointed out that we are just overextended and do not need to file bankruptcy. That is probably true, but something has got to give, we cannot make the payments. We have a 1st and 2nd mortgage (Beneficial ). We could probably sell the house for enough to cover the 1st, but the 2nd is $27,000 loaned without an appraisal or anything. (They hooked us!) I was wondering if a foreclosure would be a "better" option than bankruptcy for us. We are 30 days late on our 1st and a few days late on the 2nd. So at this point it is probably going to be bk or foreclosure for us. We have good credit and have been fighting this for the past year. Husband's income has decreased by a few thousand over the past couple years and the increase in gas prices (3 hour commute daily) is making it extremely stressful.

[HHM]

Where else is your money going. I forget if you posted you general expenses somewhere. I am sure you are already looking into it, but find a way to cut your expenses.

Foreclosure is generlly not better than a BK.

[wannabedebtfree]

HHM

We have $1400 in mortgage payments.
$800 in vehicle payments.
(We owe more than all the above are worth, so haven't been able to sell or trade.)
Gas is running about $600 per month (3 hr daily commute)

Plus utilities,etc. We have $8000 in credit card debt. This situation is just not working. We were young and stupid and made some bad financial decisions. We have cut back in every way I know possible. I am out of ideas and so stressed from trying to make it work every month.

[HHM]

How far have you gone looking into if you can get a cheaper car and finance the negative equity. (its really hard to finance negative equity in used cars, so you would have to buy a new car). I would think that with all the "employee" pricing offers from car manufactures, that you could probably get a bargain basement (more fuel efficient) car, and even with financing your negative equity, you might be able to lower your payment.

The 3hr commute is killer, are there any jobs closer, is there someone you can carpool with. Make the effort to ask around even if that means knocking on a strangers door. Even if a closer job is lower paying, it might actuall work out better financially when you factor in fuel costs and vehicle depreciation.

Have you cut off your cable or satellite TV?

Have you hired a realtor to sell your house, or have you been doing it FSBO? Maybe look into getting a realtor.

These are just a few suggestions.

[wannabedebtfree]

We have traded vehicles with negative equity in the past and that's why we are so upside down now. We originally started out with an interest rate of 24% and kept trading as our credit got better to get the interest down to 6%. So we just hate to continue the cycle of trading!! The whole and only reason we are living in our current location is for hubby's job. He works in the city. He is paid really well, but it is just not worth the commute time and gas. There are really no jobs close by that would pay anywhere near what he is currently making. He was commuting with someone but that person was laid off about a year ago. He has a job available in our hometown (where we'd like to relocate to) but we are in such a bind we can't move. We moved down there temporarily last summer, had our home up for sale, but had to come back because we were falling behind on our payments. House never had any offers, because we listed it so high to cover paying off mortgages plus real estate commision.

We do have "basic satellite connection". We tried the antenna deal, but couldn't pick up any stations period.

I know we may not be a classic situation for bankruptcy or foreclosure but it would be such a relief to not be in this situation.

[Lightning]

Where are you going to live after foreclosure? Obviously you'll have to rent, and you'll probably need to find a private landlord who won't run your credit.

Your hubby isn't paid well if you can't afford the commute and the mortgage. He's not making enough to support your lifestyle. Either he gets a different job or you change the way you live.

It's easy to stop the negative equity and trading problem with cars. Start buying cheap used ones. If you rolled over your car debt several times, you've clearly been spending more than $3000-$5000 per car. Get used to driving something less than luxurious.

[wannabedebtfree]

Where are you going to live after foreclosure? Obviously you'll have to rent, and you'll probably need to find a private landlord who won't run your credit.

Your hubby isn't paid well if you can't afford the commute and the mortgage. He's not making enough to support your lifestyle. Either he gets a different job or you change the way you live.

It's easy to stop the negative equity and trading problem with cars. Start buying cheap used ones. If you rolled over your car debt several times, you've clearly been spending more than $3000-$5000 per car. Get used to driving something less than luxurious.

We have already found a place and the owner wants to finance. So, no we would not be renting.

My husband is paid very well, we just can't see paying $800 a month in gas. We also do not like the fact that he is on the road for 3 hours per day. Doesn't make much sense to live 1 1/2 hours away from work with gas prices rising. I don't know what else you suggest I change about the way we live? Hubby has worked for 5 years straight, no vacation. We just made some bad choices, took on too much.

We don't want to trade vehicles again! Just as I stated, we have learned from our mistakes. We want to surrender our home, vehicles, and want to have the opportunity to live a simpler life and make better decisions. I don't think a pick-up truck is considered luxurious. And by the way, we have a 1990 Ford Festiva that we will be driving in the future. Does that make you happy? Sometimes you have to live and learn and we have, you "Lightning" are not telling me anything I don't already know. We have thought this through so many times and tried to make the neccessary changes but some things we can't undo no matter how hard we try.

[Lightning]

You came here looking for advice. It sounds like you've already made your mind up.

Let the house go to foreclosure. I'm not familiar with owner financing. I just hope you have a good attorney to set up the agreement.

Let your cars get repo'ed. You'll have to pay cash for the replacements or pay a really high interest rate again.

What kind of advice are you looking for?

[Pinktiger]

Here's some advice. Look at the "balance sheet." If your expenses are greater than your income, you need to file bankruptcy. If your expenses leave you only a bare sustenance left ($200-$300 after all expenses, including food, etc.) then you probably could still file Chapter 13 and be ahead.
You need to go see an attorney. Initial consultations are free. Go now before it is too late. I highly suggest this, as a foreclosure or repos will still mean you owe money, as you are upside down on both, according to what you said.
You will not quit worrying until you make a decision.
And yo - Lightning: shuddup.

[herekitty]

I agree with Pinktiger - especially the talking to lawyers part. I recommend speaking to two seperate ones, we can only offer recommendations. Lightining is that blunt guy from high school, but he's harmless at most points. It seems like you have your heart set on bankruptcy, so I thinking get a professional opinion is the next step.

[hhou812hh]

We have already found a place and the owner wants to finance. So, no we would not be renting.

My husband is paid very well, we just can't see paying $800 a month in gas. We also do not like the fact that he is on the road for 3 hours per day. Doesn't make much sense to live 1 1/2 hours away from work with gas prices rising. I don't know what else you suggest I change about the way we live? Hubby has worked for 5 years straight, no vacation. We just made some bad choices, took on too much.

We don't want to trade vehicles again! Just as I stated, we have learned from our mistakes. We want to surrender our home, vehicles, and want to have the opportunity to live a simpler life and make better decisions. I don't think a pick-up truck is considered luxurious. And by the way, we have a 1990 Ford Festiva that we will be driving in the future. Does that make you happy? Sometimes you have to live and learn and we have, you "Lightning" are not telling me anything I don't already know. We have thought this through so many times and tried to make the neccessary changes but some things we can't undo no matter how hard we try.

Boy!!!!!!!!!!!!!! 1990 Ford Festiva Still Running? God Bless You! I had two years ago, a 1988 and a 1991. They were company cars (I would never buy them myself, no offense). I just cannot believe it is still running. Good deal. Anyway, you are in a difficult situation. Please ignore Lightning and maybe he will go away. Anyway as HHM mentioned would it be easier to move closer to work? I feel your pain with the commute. I live 45 miles from NYC, but on bad days it takes me 2.5 hours to get there, not to mention the expense. Whatever you decide good luck!

[wannabedebtfree]

I guess I'm not so much looking for advice but SUPPORT. I have never done this before and it is scary! Thanks for all the positive feedback! We do have more expenses than income, I have done a balance sheet. If there was a way to get out of the vehicles and home without owing the deficit, we could make it work. If we can make it through the bk , I think we'll be just fine. I will have my teaching degree for this next school year, we have a place available with owner financing, and we will definitely be more wise with our finances.

[wannabedebtfree]

Yeah, the little car seems to run just fine. We had to put brakes on it, that's it. Knock on wood!!

[wannabedebtfree]

You came here looking for advice. It sounds like you've already made your mind up.

Let the house go to foreclosure. I'm not familiar with owner financing. I just hope you have a good attorney to set up the agreement.

Let your cars get repo'ed. You'll have to pay cash for the replacements or pay a really high interest rate again.

What kind of advice are you looking for?

By the way, I'm here for the same reasons as everyone else.

[robivi3]

wannabe, post here all you like. Post questions all you want. This forum is for that. Sometimes you may even know the answer and just need a sounding board. Feel free to use us as that.

Sometimes you may wanna just gab, this forum also has a place for that. Just hangin' here with everyone helped me alot. I have gotten to know afew old time members pretty well and even intend to see Minnymouth in person one day.