Negative net worth.

[Saving in So Cal]

Without discounting anyone's moral objection to bankruptcy, consulting with a reputable bankruptcy attorney may not be a bad suggestion for this couple. With recent amendments to the Bankruptcy Code, declaring Chapter 7 bankruptcy, where your debts are wiped free, is not so easy. Since your friends have earning capacity, they would likely be limited to Chapter 13 bankruptcy, where they have to come up with and meet a repayment plan. I believe they would also have to go through some sort of consumer counseling program. In return, they might get some concessions on their interest rates or reductions in their loans balances. Some of the secured creditors may be even be satisified with their security. Even if they don't avail themselves of the bankruptcy process, consulting with a bankruptcy attorney may give them a much needed wake-up call. It seems like they are denial about the seriousness of their financial situation and, in my experience, people have an easier time accepting tough advice from a stranger rather than a friend.

[sakigt]

Lazyness isnt deserving of the term "psychiatric" imo.

In that case, I know SEVERAL who need to be committed! lol

[Ima saver]

They make $100,000 and their window fell out of their house!! Come on, where is their sense of pride? They don't sound like they can be helped, unless they are willing to help themselves!!

[KellyJef]

Originally Posted by LuxLiving

It says that they aren't working up to their potential...so because in some capacity they are lazy then the creditor should suffer a loss??? I don't think that is morally right!

They dug their hole, now they should dig themselves out of it.

You made my blood pressure go up just thru the roof by merely suggesting bankruptcy for these people! Good grief, it is there for people who have medical emergencies that wipe them out - not some layabout nogood!!!

I agree with every word!

These people are morally bankrupt losers. Period.

[scrava]

I think they both may have some serious problems. Sounds like depression. Or, potheads who smoked WAY too much and have no ambition. Until they are ready to change, though, I don't think there is much you can do to help them.

[greedy4chips]

Originally Posted by Sweepsplayer

But if this couple does need psychiatric help, then that would classify as a medical condition, right? Therefore would that make it ethically acceptable for them to declare bankruptcy?

If they both had severe depression then you could make a case for bankrupcy if they cannot be helped.


Well we have knocked them enough, now lets help them.

Solution: Both of these Master Degree holders go out and get full-time jobs and a couple part-time ones to boot. The part-time jobs are needed to keep them from spending more and to make it hurt!

$100k is $7500 take home a month.

Expenses My guesstimates
House: $2000
Car1: $350
Car2: $350
Car3: $400
Timeshare: $400
CCs: $3000
Expenses: $1000 bills and food

No more cable, vacations, eating out, etc. 2 years of hard work and they are well on their way to being out of debt!

In 2 years they will have CCs paid for, timeshare mostly paid for, cars mostly paid for and their house almost rightside up.

Just my honest opinion, it is a workable debt for 2 wage earners with their obvious earning capabilities.

Bankrupcy is a cop-out!
$1200

[b4freedom]

They aren't depressed because they are active in lots of activities: vacations, church, etc.. Although, they seem to be getting a little down. They aren't using drugs, as far as I can tell. I think that several years ago they got caught up in trying to start two businesses (hers was the MLM, and his was consulting) and they played it up. I thought they were very successful until I learned all this. The only way I can describe it is to say that they are on a speeding train, having a giant party, and the train is racing towards a giant brick wall. They know the wall is there, they just don't want to look at it or deal with it, so they keep on having fun. They don't want to pull the breaks and do the work to fix the situation. The thing with the window is the same way, they just shut the door and ignored it. It's almost as if they are sleep walking a party. I just want to shake and slap them and say, “Wake up you dumb *&%@~!”

Tonight I told them that they are just going to have to get jobs and pay it off. I said that if you don't like that answer, you can declare bankruptcy and have a judge tell you the same thing. They responded by asking me if I wanted to go to the beach with them in a few weeks. I declined.

[disneysteve]

Originally Posted by greedy4chips

$100k is $7500 take home a month.

Are you talking 100K gross or after taxes, because 100K gross most certainly wouldn't be 7500/month after taxes. It would be more like 6000, give or take a couple hundred. And if you meant after taxes, then 7500/month is 90K/year.

As for your plan, I still say they should sell the timeshare. They neither need it nor deserve it. They would still owe on it as timeshares are horrendous investments and they couldn't possibly recoup what they owe, but at least they would owe less. And they could sell the non-running car. Again, they'd still owe but not as much.

[greedy4chips]

When I was making $78k per year I was bringing home $1250 a wk after putting 12% into a 401k. I guess my estimate was wrong because I had my w4 setup to take into consideration all of my deductions. I now have friends at the same company making 90k and taking home 1500/wk so I just figured 100k would be about 7500/month or $1700/wk * 4.33 wks/month = $7400

I agree with them selling the junk car and the timeshare. I also think they should do 2 jobs each and strive for $140k/yr income.

No matter what our guesstimates of their income, this couple has no business being in debt.

[med12]

I'm not defending them as I have never met them BUT I am going to just throw this out there. I have a masters degree and a law degree. I have been actively looking for a job for eight months now. I have made it my full time job to look. It gets very very depressing to send out 50-100 resumes and only get 3 interview calls. Granted, I live in a smaller market to a certain extent but I am not being picky with what I am applying for. It is easier said than done to tell someone to get a job. Especially since it appears that these folks are a bit older and don't want to work. Maybe they feel that they want to retire, hence the consulting idea. Nope - not necessarily the best thing but the one poster was right about the bankruptcy route - they won't be able to file a ch. 7 because of the wage earning potential.

Also, if they have searched at all for a job, they may be running into a wall because of their age. Nope, can't discriminate on age but it certainly plays a factor in the hiring decision and there are a multitude of reasons why a company can say they aren't hiring you without bringing up the age thing at all.

That being said - these people really need to get their heads out of their butts and make some drastic changes. Whether that be to get jobs or stop spending or whatever, they need to change and from the limited information we've been provided, it sounds like there is a case of depression involved as well as head in the sand-ism and until they both recognize that they will not get out of this situation. However, I think it is encouraging that they have approached a friend with it to take the first steps to change. My advice to b4freedom is to tell them to clean out their house. Sell things that they don't need whether they use a garage sale, craigslist or ebay. It's amazing what people will buy. Every last penny they get needs to go to debt. The other thing you can do is direct them to sites like this and others on the net to help them come up with a plan. The biggest thing though is they both have to be on board to changing their situation or it will be more problematic and harder to change.

I wish your friends good luck. They didn't get here overnight and they aren't going to get out overnight but hopefully you can encourage them to change and open the lines of communication about what steps to take to get there.

[b4freedom]

Originally Posted by med12

I have a masters degree and a law degree. I have been actively looking for a job for eight months now.

It's funny that you mention the law degree. I have another friend that finished law school in California about two years ago. My guess is that she has student loans in the area of $150k; probably more. She’s still looking for a job. She can find assistant jobs, but nothing that she really wants, or that’ll pay off her student loans. It seems to me that some law schools have flooded the market with lawyers. I sort of caught a glimpse of this when I walked into an HR Block and saw two lawyers applying for jobs.

(I knew they were lawyers because I served on the jury for one. And the other one I’ve seen in court.)

[Savingmonster]

Originally Posted by disneysteve

I think this couple needs psychiatric care. Seriously, there are some major things going on there. Two well-educated folks who gave up high paying jobs and now do basically nothing. That just isn't normal behavior.

Maybe you can give them another vacation to disney, STEVE.

[TinyFish]

That's a pretty strange situation they have there. Yeah, I guess that if you don't have a WINDOW in your room it is going to get pretty COLD! My husband does not have n MA degree and has a bit of an oblivious personality, but even he could have figured that one out I think!

Yes, they need to go out and try to get jobs I think! Whether or not they can even meet all the payments I supposed depends on what their income ends up being. Not having jobs seems to be problem #1. Not too surprised about the state of the house. My B.I.L. was out of work for months and apparently his apartment was awful.

-TinyFish