Hello everyone. I've been reading this site for a while & have referenced it quite a bit over the years. First time poster though!
My son and his wife are having a real tough time financially. They got in way over their heads through some stupid decisions, credit cards, and a problem with the construction of their house. I'm hoping you can help me out with some advise for them, I'd really appreciate it. Here are the facts:
-They made $115k last year. He made most of this. He is still making this amount of money BUT he is going to need to take some time off due to personal problems (stress) and his wife is pregnant & having some health issues w/ it. Basically, he needs to be there to help out with their two little ones as she simply cannot do it. I expect his income to be reduced in the area of 1/2 over the next 6-8 months!
-They owe 450k on a house that is worth 350k, if it would even sell at that. The house was new when they purchased it 3 years ago but it is already suffering from major rot on the exterior. It needs 20k of work NOW. They have considered suing the builder but that takes $.
-They owe $70k on credit cards... They didn't waste money - most of the money is taxes, living expenses, diapers, food, etc. They're paying $1500/mo on these.
-They owe $100k in gov student loans (50k/ea) and he owes $5k to a private organization for a student loan.
-They owe $19k on their vehicle that is worth about the same. This is their only vehicle and I think they should keep it.
From what I've read, I realize they would be well above the median income limit in their state (VA) if he was to continue working full time. But, I'm guessing his 6-month income will put them well below the limit.
I've told him I think he should stop paying the CCs and his mortgage right now as they can't even afford to go grocery shopping! Then, go talk to an attorney about filing chapter 7. Honestly, I'd like to see him either go rent a house for a while (save $) or buy something cheaper but I'm not real sure about how to tell him to do it. Also, he recently sold his truck (which he needs) because he couldn't afford it along w/ the CC payments! He makes a decent living & is a good kid, just made some dumb decisions. I've been there, I know how he feels & want to help him out.
My questions are about how he would go about this exactly. Is a chapter 7 pretty cut & dry if his income is below the 6-month limit for his family size? They have 2 kids now but are having a third - will it go on the 4 or 5 person amount? If he goes back to work after the baby is born & his income increases - will it cause a problem for a chapter 7? When filing for chapter 7, if they have some room in their budget (stop paying the CCs and the high mortgage), will it cause a problem?
I'd really appreciate anything you can offer. He needs something positive.
buddy
My son and his wife are having a real tough time financially. They got in way over their heads through some stupid decisions, credit cards, and a problem with the construction of their house. I'm hoping you can help me out with some advise for them, I'd really appreciate it. Here are the facts:
-They made $115k last year. He made most of this. He is still making this amount of money BUT he is going to need to take some time off due to personal problems (stress) and his wife is pregnant & having some health issues w/ it. Basically, he needs to be there to help out with their two little ones as she simply cannot do it. I expect his income to be reduced in the area of 1/2 over the next 6-8 months!
-They owe 450k on a house that is worth 350k, if it would even sell at that. The house was new when they purchased it 3 years ago but it is already suffering from major rot on the exterior. It needs 20k of work NOW. They have considered suing the builder but that takes $.
-They owe $70k on credit cards... They didn't waste money - most of the money is taxes, living expenses, diapers, food, etc. They're paying $1500/mo on these.
-They owe $100k in gov student loans (50k/ea) and he owes $5k to a private organization for a student loan.
-They owe $19k on their vehicle that is worth about the same. This is their only vehicle and I think they should keep it.
From what I've read, I realize they would be well above the median income limit in their state (VA) if he was to continue working full time. But, I'm guessing his 6-month income will put them well below the limit.
I've told him I think he should stop paying the CCs and his mortgage right now as they can't even afford to go grocery shopping! Then, go talk to an attorney about filing chapter 7. Honestly, I'd like to see him either go rent a house for a while (save $) or buy something cheaper but I'm not real sure about how to tell him to do it. Also, he recently sold his truck (which he needs) because he couldn't afford it along w/ the CC payments! He makes a decent living & is a good kid, just made some dumb decisions. I've been there, I know how he feels & want to help him out.
My questions are about how he would go about this exactly. Is a chapter 7 pretty cut & dry if his income is below the 6-month limit for his family size? They have 2 kids now but are having a third - will it go on the 4 or 5 person amount? If he goes back to work after the baby is born & his income increases - will it cause a problem for a chapter 7? When filing for chapter 7, if they have some room in their budget (stop paying the CCs and the high mortgage), will it cause a problem?
I'd really appreciate anything you can offer. He needs something positive.
buddy
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