Months away from BK?

[dano100]

I'm glad I stumbled onto this forum and hope someone here can help.
My wife recently lost her job after 26 years. Her income was approx. 35%-40% of our total income. She will collect unemployment for the next 6 mos. then will receive "sub pay" equal to 70% of her wages from her employer for another 4 mos.

We will be able to meet all our obligations as long as she has those 2 sources of income. Our dilema is employment in our area is depressed and the likelyhood of her getting another job that pays as well as the one she had is slim.

Our current financial situation is this: a first mortgage of $144K and a second mortgage of $65K. We owe $31k total on both our cars and have no credit card (unsecured) debt. Our total debt for the house and cars is $240K. Our house is valued at $280,000 and the cars are probably worth $55,000 total.

Our budget is approx. $3500- $3800 a month. My average take home pay can range between $2400- $3200 a month, depending on the amount of overtime that is offered. My wife's unemployment is $1200 a month, thus we are making ends meet at this time. We also have about $13,000 in an "emergency" fund that we can tap. We have an excellent credit rating of 770. Our only savings is our 401Ks, valued at $250K.

We currently have our home for sale, hoping it sells before her unemployment checks run out but with the depressed job market in our area we are not confident it will. In our small town a house like ours is only affordable by about 2-3% of the citizens here, according to our realtor.

My fear is our house won't sell, my wife runs out of unemployment, she doesn't find another job, my overtime dries up and we end up with a monthly shortfall of over $1200.

I guess my questions are: should we, at this time, notify our mortgage companies and auto finance company of our situation and the possiblity of not being able to meet our obligations in the future and ask for some kind of arrangements? Or should I contact a bankruptcy attorney now, explain our situation and hopefully head off any bankruptcy or forclosure? (We would love to keep our house and cars as they were the last we were going to buy until reirement in 7 years).

We have spent a lifetime building an excellent credit history, have always received the most preferred rates on loans and it is just killing us that we could loose it all this late in life because we were not prepared to handle the loss of one of our incomes. After 26 years of employment we never thought my wife would lose her job at one of the largest companies in the world, a company that just this past year invested millions of dollars in her plant on new equipment supposedly insuring her future was bright.

Any advice will be greatly appreciated!

[JeepMom]

After reading your post a 2nd time, I'm wondering why you are even here. Are you retarded? Suze Orman would slap you silly. You have a net worth of nearly 6 figures, not including your 401k. Even if you discounted your house 50k to sell, you would have a networth of 50k, again not including your 401k. What are you people thinking. Get up and move on to a better place. If you file bk while you are still capable of making your own choices, you will lose alot more.

That is extremely rude, offensive and not helpful.

The word "retarded" is NOT a synoym for stupid.

That being siad - OP I think selling your house is your best option.

[miss puff]

After reading your post a 2nd time, I'm wondering why you are even here. Are you retarded? Suze Orman would slap you silly.

Ummm.... I am kind of new here and haven't quite got the nerve to state strong opinions yet but, that was a really ugly thing to say.

I get the impression that they are looking for advice on what to do WHEN it get's bad due to wife not having a job, house not selling, etc......

[bkbiker]

Perhaps filingonmyown just had brief lack of judgment and will make a correcting as needed. I can understand the rest of the post; Most of us here had debilitating debt and only considered bankruptcy as a last resort, perhaps dano100 is just learning what bankruptcy really is.

[dano100]

Perhaps filingonmyown just had brief lack of judgment and will make a correcting as needed. I can understand the rest of the post; Most of us here had debilitating debt and only considered bankruptcy as a last resort, perhaps dano100 is just learning what bankruptcy really is.

That is true, I am just finding out what BK is. And I was not too offended by the harsh comments. This is why I came to this forum, for advice. But like I said, if the house doesn't sell and my wife cannot find a job (at 55 years old) then we will have a shortfall of $1200 a month.

BTW, my job is pretty secure (34 years seniority) so moving where employment is good is not much of an option. That would require a commute of at least a 120 mile round trip.

I just want to get a head start on a "potential" problem.

[SinkingFast]

Well, FOMO kinda voiced the same thoughts I had.

We've been there done that. Spent and sold everything to keep from winding up here. But here we are.

Short story,......... Hubby lost job, July, '04. Hubby found new job, Feb, '05 outa State. Suddenly had to support 2 households and we had a house we were trying to sell.

Last spring, '05, we cashed out Hubby's retirement IRA to pay off the 2nd on the house. We were positioning it to sell. Retirement savings is GONE. Bye, bye. Kapoot.

We quick sale priced our house when we first went on the market. And it sat, and sat, and sat. We reduced, reduced, reduced. Down the point where we'd just pay the mortgage and all the costs to sell. Went thru the whole Foreclosure process, only to get a last minute reprieve. We sold and closed this past week. But we wound up paying out of pocket to Get-R-Done. Lates and penalties and fees and legal costs added another $8K on top of our mortgage balance.

In November, I sold all my jewelry to get us money to keep us going. Hoping against hope that the house would sell and we'd begin to turn everything around.

Because of cashing out the IRA, we wound up owing taxes big time. The only way to pay Uncle Sam was to sell our truck.

So I kinda feel the same way FOMO does. Dano has a nice house. Nice cars. And no unsecured debt.

Quick Sale price the house. You've got plenty of room to wiggle.

Call the Lender and start working on Short Sale just in case you need it. It's an application process that will take some time.

Trade those cars for beaters to get around in with no payments and liability only insurance.

Dano,.......... You are still in very good shape, financially. We live month to month, paycheck to paycheck, on CASH with no safety net of CC's and no savings to tap.

You have options to get out from under your Secured Debt obligations. Once you do that, you can adjust your lifestyle to your new income level.

[FilingOnMyOwn]

I really don't know what to say. All I did was respond to a post that I thought someone wanted responses to. Insensitivity was not the intention.

As its clear a couple nerves have been struck I will avoid voicing my opinions by not posting on this thread anymore.

[no_it_all]

Any advice will be greatly appreciated!