Divorce and stuck with all debt

[glt4392]

hello,
The ex and I have been in a financial hell ever since we got married. We purchased a home in FL at the peak of the real state bubble and lived in it for a year. Due to work and trying to maek the marriage better, We moved to the midwest and rented the place. Once the bubble burst, we could not rent it, sell it or even short sell it. I tried hard to still pay for our debt but we just got deeper and deeper into credit card debt and even took a loan on my 401k. Now, we just got divorced and because she filled for Chapter 7 as part of the process, I am stuck with a house in FL and almost a year behind on my mortgage and all the credit card debt that was either on my name or both of our names. She is financially responsible to $0. On top, I now have to pay child support.
DEBT:
house - $375,000 (appraised at $120,000, should go in foreclosure soon)
credit cards - $11,000 ($400 in minimum payments)
401k loan - $7000 ($240 payments taken out of my bi-weekly paycheck)
Student loans - $130 a month.
child support $600 a month
Daycare - $500 a month

Because of being behind on my mortgage my credit score is screwed (400s). I keep looking at what to do but I am getting different opinions. On one side, it is being suggested that I stop paying my credit cards and use the saved income to offset the child support payments. With my credit already ruined, paying off 11K will not make much of a difference if I default on $375K. Some have suggested credit councelling. This would help pay the debt but again if the banks sue at any point, I would still be forced into a chapter 13. A voluntary chapter 13 would be also an option but according to the last lawyer I talked to, because they don't care about 401k loans etc but only about the allowances they give you, I would pay over $1000 a month for 5 years.
I feel trapped. She also got primary so I get 0 deductions, 0 tax breaks and 0 ways to save on child care.

any suggestions will be appreciated.

thank you

[disneysteve]

What is your monthly take home pay?
What are your total monthly expenses at this point?

[Angelynne]

Originally Posted by glt4392

hello,
The ex and I have been in a financial hell ever since we got married. We purchased a home in FL at the peak of the real state bubble and lived in it for a year. Due to work and trying to maek the marriage better, We moved to the midwest and rented the place. Once the bubble burst, we could not rent it, sell it or even short sell it. I tried hard to still pay for our debt but we just got deeper and deeper into credit card debt and even took a loan on my 401k. Now, we just got divorced and because she filled for Chapter 7 as part of the process, I am stuck with a house in FL and almost a year behind on my mortgage and all the credit card debt that was either on my name or both of our names. She is financially responsible to $0. On top, I now have to pay child support.
DEBT:
house - $375,000 (appraised at $120,000, should go in foreclosure soon)
credit cards - $11,000 ($400 in minimum payments)
401k loan - $7000 ($240 payments taken out of my bi-weekly paycheck)
Student loans - $130 a month.
child support $600 a month
Daycare - $500 a month

Because of being behind on my mortgage my credit score is screwed (400s). I keep looking at what to do but I am getting different opinions. On one side, it is being suggested that I stop paying my credit cards and use the saved income to offset the child support payments. With my credit already ruined, paying off 11K will not make much of a difference if I default on $375K. Some have suggested credit councelling. This would help pay the debt but again if the banks sue at any point, I would still be forced into a chapter 13. A voluntary chapter 13 would be also an option but according to the last lawyer I talked to, because they don't care about 401k loans etc but only about the allowances they give you, I would pay over $1000 a month for 5 years.
I feel trapped. She also got primary so I get 0 deductions, 0 tax breaks and 0 ways to save on child care.

any suggestions will be appreciated.

thank you

wow.. i must say you're really into one hell of a trouble. regarding the child pension thing, i think you should tell your ex thank you so much if it weren't for her you wouldn't be in a mess. just kidding.. whatever choice you make, it's still hard because obviously you owe too much that you cant pay in just a nick of time.

[artwest]

Without knowing more information (take home pay and budget) it is difficult to give advice.

One thing that concerns me is the 401k loan. If you should lose your job for any reason (I know that is just what you need right now) your 401k loan will become due in full or you will be charge a 10% fee plus have to pay tax on it just as if you had made an early withdrawal on your 401k. Getting that paid should be towards the top of your list.

[Eric80]

A friend of mine was in a very similar situation and she went to a debt advisor where they advised that she consolidate her debts. she went away thought about it (as well as doing her own research) and decided to give it a go - that was possibly the best thing she has ever done. She is in such a good position now and can spend more on herself and her little girl.

[naomibatac]

Sometimes the best thing to do is to seek outside help. Try to talk with debt counselor in order to analyze your financial situation and come up with a plan so that you can settle your debts.

________________
Read this article on paying off debt, which might be of help to you:Help Paying Off Credit Card - Your Help Paying Off Credit Card Debt Options