Looking for honest advice on debt

[Georgiapilot]

Ok heres the deal. I was injured at work almost a year ago. It was serious enough that I had to have back surgery and Im still out of work 11 months later on workmans comp. I have a lot of debt compared to my income and need some help. Heres the layout:

$120,000 secured with 5ac. of raw land, SUV, and some business equipment from a previous business. All of this is now valued at around $75k.
payment of $750/month/20years

around $20k in credit card debt (mistake Ill never make again)
Total min payments of $650/ month

$23,000 private student loan balance.

So I have around $165k of debt with only $75k of property secured with it. Doesnt sound good to me. I have always been one to pay my bills and want to pay my debt off but I don't see a way My wife of 8 years is also pregnant with out first child and we rent our home.

The good things: My wife has good credit, little debt, good job, and shes not on any of my debt. Is filing bankruptcy a good option? Will it effect my wifes credit? Any advice is appreciated!

Im located in Georgia if that matters.

[disneysteve]

Welcome. What is your household income? What are your total monthly living expenses? Do you have any savings?

At the very least, I'd be selling everything I could possibly sell to raise money to pay off debt. If you have 75K in assets that you can live without, sell them and put that money toward the debt. And I'd be slashing living expenses to the bare minimum. If you post your budget, we'd be happy to help point out things that could be trimmed or cut.

Originally Posted by Georgiapilot

My wife has good credit, little debt

Sorry, but I totally disagree with this. If my wife has debt, I have debt. We are married. We are a team. What affects her, affects me, and vice versa. There is no such thing as my debt or her debt. As your spouse, this debt is just as much her responsibility as it is yours.

[jpg7n16]

Also, where do you live? Do you own a home as part of this debt, or are you renters?

[maat55]

What are your prospects for going back to work and what would your total incomes be.

[Seeker]

Sell off all assets from your previous business. There's no reason to keep them when you cannot work. The longer you hold them, the lower their "value" becomes.

As far as raw land, you pay property taxes and there are other expenses associated with holding it. If you don't have attainable plans for these things, then sell them, even if it must be at a loss.

Bankruptcy will affect both you and your wife regardless of the fact that your name only is on your past debts. Backruptcies hold effect for 10 years into the future. Anything you try to purchase as a team (ie based on both of your incomes) for 10 years following a BK, will be more expensive in terms of higher interest rates (assuming that lenders will even lend to you) because of that BK.

My husband got a BK well before we were married (I did not know him at the time of his BK). Five years into the marriage, the auto loan we got went under my credit instead of his, they could still see it in his records. Both our names are on the auto title, though in reality he's pretty much the only driver of that car.

If you try for a major loan, like the purchase of a house within that 10 years, lenders will look at both your incomes and history. Anything you try to do as a team, will be affected by this. Like it or not, she will be affected.

What is your income on Worker's Comp? You really need to break out all incoming monies and all outgoing monies line-by-line:

income:
both of you?

expense:
rent?
utilities?
insurance?
groceries?
medical?
auto?
etc.

debts with interest rates and terms (time)?

You might also want to break out necessities (versus wants or desires) within those expenses and debts.

You will need to look closely at what you can live without (to sell) and what you need to live with (to meet expenses and debts and get into a better financial reality).

You will probably need to find something that you can do (for income) without having to be physically stressed; even if that means changing industry or going back to college to learn to do something less physical.

[Georgiapilot]

Originally Posted by Georgiapilot

Ok heres the deal. I was injured at work almost a year ago. It was serious enough that I had to have back surgery and Im still out of work 11 months later on workmans comp. I have a lot of debt compared to my income and need some help. Heres the layout:

$120,000 secured with 5ac. of raw land, SUV, and some business equipment from a previous business. All of this is now valued at around $75k.
payment of $750/month/20years

around $20k in credit card debt (mistake Ill never make again)
Total min payments of $650/ month

$23,000 private student loan balance.

So I have around $165k of debt with only $75k of property secured with it. Doesnt sound good to me. I have always been one to pay my bills and want to pay my debt off but I don't see a way My wife of 8 years is also pregnant with out first child and we rent our home.

The good things: My wife has good credit, little debt, good job, and shes not on any of my debt. Is filing bankruptcy a good option? Will it effect my wifes credit? Any advice is appreciated!

Im located in Georgia if that matters.

Originally Posted by disneysteve

Welcome. What is your household income? What are your total monthly living expenses? Do you have any savings?

Income including my workmans comp is right at 4k/month. Expenses are around $2500/month. we have about 5k in savings.

At the very least, I'd be selling everything I could possibly sell to raise money to pay off debt. If you have 75K in assets that you can live without, sell them and put that money toward the debt. And I'd be slashing living expenses to the bare minimum. If you post your budget, we'd be happy to help point out things that could be trimmed or cut.

Well everything I don't need is forsale but just because I want to sell it doesn't mean it will sell. The land and business equipment is forsale but no one is interested in this economy. All living expenses are cut to the min. period! We spend about $50/month on going to dinner or a movie 1 time and thats it. Every other cent goes to pay off debt but were not getting anywhere quick.

Sorry, but I totally disagree with this. If my wife has debt, I have debt. We are married. We are a team. What affects her, affects me, and vice versa. There is no such thing as my debt or her debt. As your spouse, this debt is just as much her responsibility as it is yours.

You misunderstood what I said, We tackle all our problems as a team including debt. I was refering to the effect on her credit and the few assets that are totally in her name if I filed bankruptcy and nothing more.

Originally Posted by jpg7n16

Also, where do you live? Do you own a home as part of this debt, or are you renters?

Georgia, Rent

Originally Posted by maat55

What are your prospects for going back to work and what would your total incomes be.

Its unknown at this point, income would only be 20% higher

Originally Posted by Seeker

Sell off all assets from your previous business. There's no reason to keep them when you cannot work. The longer you hold them, the lower their "value" becomes.

See above, Im not holding on to them because I want to.

As far as raw land, you pay property taxes and there are other expenses associated with holding it. If you don't have attainable plans for these things, then sell them, even if it must be at a loss.

Same as above, its forsale at 1/2 market value

Bankruptcy will affect both you and your wife regardless of the fact that your name only is on your past debts. Backruptcies hold effect for 10 years into the future. Anything you try to purchase as a team (ie based on both of your incomes) for 10 years following a BK, will be more expensive in terms of higher interest rates (assuming that lenders will even lend to you) because of that BK.

Will it have an effect on her ability to buy something without my name on it?


My husband got a BK well before we were married (I did not know him at the time of his BK). Five years into the marriage, the auto loan we got went under my credit instead of his, they could still see it in his records. Both our names are on the auto title, though in reality he's pretty much the only driver of that car.

If you try for a major loan, like the purchase of a house within that 10 years, lenders will look at both your incomes and history. Anything you try to do as a team, will be affected by this. Like it or not, she will be affected.

Well as of now she was qualified for a home loan by herself, my name is not on it anywhere, nothing to do with me. Thats why I wanted to know if she bought a house and I file BK if they could come for it.


What is your income on Worker's Comp? You really need to break out all incoming monies and all outgoing monies line-by-line:

income:
both of you?

expense:
rent?
utilities?
insurance?
groceries?
medical?
auto?
etc.

debts with interest rates and terms (time)?

You might also want to break out necessities (versus wants or desires) within those expenses and debts.

You will need to look closely at what you can live without (to sell) and what you need to live with (to meet expenses and debts and get into a better financial reality).

You will probably need to find something that you can do (for income) without having to be physically stressed; even if that means changing industry or going back to college to learn to do something less physical.

All this has been taken into consideration and adjusted long ago. I feel $50 a month for fun for us is worth the loss of $50 to keep our relationship strong. And Im serious, thats all thats not used for debt. We cant even cut out utility services like tv because its all included in our rent. Other things to consider is we live in the country so certain things we have to have that people who live in cities do not need. I would love to go back to college but, how am I going to do that and pay my bills? I already have a career change in mind that is less physical but again I have to heal up and need the education in that field.


I truly appreciate everyones response. I do not want to just file bankruptcy as an easy way out. I want to pay my bills and do. My credit is actually good still, I pay all my bills on time and always have. My worries came when she unexpectedly got pregnant because she was suppose to not be able to get pregnant without medical help and hasn't been for able to for 8 years. So now that a child is on the way it changes the game for me. I want us to be able to provide everthing needed for the child and its just not possible with our current situation. We both have very supportive families that will help all they can but I do not want to rely on family to feed my child.

[disneysteve]

Income including my workmans comp is right at 4k/month. Expenses are around $2500/month.

Are you including your debt payments in your expenses?

[jpg7n16]

Sell the land - pay off big chunk of debt
Sell the SUV - pay off chunk of debt (buy cheaper replacement car for $5k-ish)
Lower the price on the business equipment - sell business equipment - pay off big chunk of debt

Once the debts are paid down a lot, maybe the monthly payments will go down too - or see if you can get the payments reset for the new lower balance over the same timeframe. Then aggressively pay down the credit cards (highest interest rate assumed).

Student loans are non-bankruptable anyways, so bankruptcy would do nothing about them. You'll have to pay them off one way or another.


Once you get back on your feet and working again - how much will you make? Obv more than the workers comp.

[ditchtheboss]

I agree with jpg7n16, get rid of anyu assets you don't need so you can reduce your debt as much as possible.

Another good help is getting another income. There may be activities you can do from home, usijg your computer to earn income, any little income helps to reduce the interest.

Investigate the possibility of earning passive income. Setting up passive income streams is slow, but if it is going to take 5 years or more for you to reduce the debt then you can certainly earn some passive income in the period to help to get rid of the debt.

Once you don't have any more debt, the passive income gives you money to invest.

Good luck.

[Seeker]

I wrote previously:
Bankruptcy will affect both you and your wife regardless of the fact that your name only is on your past debts. Backruptcies hold effect for 10 years into the future. Anything you try to purchase as a team (ie based on both of your incomes) for 10 years following a BK, will be more expensive in terms of higher interest rates (assuming that lenders will even lend to you) because of that BK.

Originally Posted by Georgiapilot

Will it have an effect on her ability to buy something without my name on it?

It depends on the state laws where she plans to purchase. Many states split income 50/50 ; so 50% of what she earns is "joint" (ie yours); and 50% of what you earn is "joint" (ie hers).

You two are already married... and a BK has these ramifications in the future. Check with a lawyer in your state, familiar with your state laws with regard to this.

Originally Posted by Georgiapilot

Well as of now she was qualified for a home loan by herself, my name is not on it anywhere, nothing to do with me. Thats why I wanted to know if she bought a house and I file BK if they could come for it.

How long have you two been married? Where does the DP for this house come from? Her savings before marriage? Can you detail prove (accounting/bank records) that she saved the money without even 50% of your earnings intermingled into this future home? Did you as a husband use all your income for expenses and she save 100% of her income for home? That's the type of questions that the court would be asking when they look at your potential BK. Essentially you getting a BK and her having money to pay for a house, could be perceived as you hiding money in her name for the future purchase of a house. Check with a lawyer in your state familiar with these issues in your State of residence.

[maddog21]

Sounds like you are in a pretty tough spot. I keep hearing commercials on the radio talking about eliminating credit card debt. Even though these things sound like a hoax I think it may actually be worth checking out in your situation. Basically, you will have the opportunity to deal with the credit card companies and actually renegotiate your debt. Also, check out the bankruptcy laws in your state and get a bankruptcy lawyer who you can pay on a contingency basis. This means you will be able to pay the lawyer after you get back on your feet. he lawyer should be able to tell you about how bankruptcy may or may not impact your wife's credit.