Crushing Debt - Need advice paying it off

[maat55]

IMO, you two need to sit down together and agree on a plan to get out of debt. This plan would include cutting every unecessary expense possible(including eating out of all kinds).

It would also involve selling everything you can (cars etc.). Your numbers leave you no way to do it on your own. You have to want to do it more than anything(a quest). Every paycheck should make a difference. But again, you need to do it together. Just tell your spouse I said so.

You should list all your expenses by necessity starting with food(not eating out, but brown bags and leftovers) utilities, house etc. Then list your debts either smallest to largest or highest interest to lowest, pay the minimums and apply all extra funds towards the first debt, knock it out and move to the next.

Good luck.

[Russell]

It would also involve selling everything you can (cars etc.). Your numbers leave you no way to do it on your own. You have to want to do it more than anything(a quest). ...

Good advice and that is key! In your original post you said "DH is anxiously waiting for my post and the responses" I hope you're just as anxious as he is if not more because if you show the interest and the drive I'm sure your husband will help you. I know that would be true for me!

[LivingAlmostLarge]

That fills in more details.

Can I ask a very stupid question. How will you retire, pay for college when you and your husband are on two different living expenses?

Do you work until you die and he retires? Or will you have debt and have bankruptcy on your account which doesn't go through when the judge finds out your husband has income? Or will you have to get divorced for him to pay the debts?

Debts in general suck. They suck even more when your spouse could help you pay them off but isn't.

Time to put on the big girl panties and talk about joint finances. Maybe having 3 accounts, one for everything, and one each for "fun" money. Unfortunately your DH is going to have to give up stuff to pay off the debt.

He also can't keep eating out when you have so much debt.

Question what are you saving for retirement and college?

[KTP]

Do you file taxes as married filing separately?

I can't get over why two people would keep separate accounts when married, except maybe for a small personal spending account where each would get the same set amount for hobbies or strip clubs or whatever.

Does this stop debt holders from going after combined assets, or assets in your husbands name? I'd be curious to know the answer to this...as probably Maddof's wife would be also

[Seeker]

Yours, mine and ours, only works when both are not suffering, and without an income you have no means to better this situation (if you still want to call it "your" situation). But, if you have health issues and cannot work, "your situation" will affect your husband's situation too (and your child's).

Money/income is the only thing that will resolve these debts.

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In addition to the items previously mentioned that you guys can do (that you've not responded to)....

Raise your auto insurance deductibles to at least $1000... and more if your insurance co will deal.

If your insurance company is AAA, switch out entirely... there are many companies in this state that will insure you less expensively. AAA is the MOST expensive company within this state. If you only belong to the AAA AutoClub, I'd consider switching to Allstate since they will cover both drivers for one lower price for just the roadside assistance.

Review your auto coverage entirely. California requires at minimum: Auto insurance basics-What you need to know.

Do you file taxes as married filing separately?

I can't get over why two people would keep separate accounts when married, except maybe for a small personal spending account where each would get the same set amount for hobbies or strip clubs or whatever.

Does this stop debt holders from going after combined assets, or assets in your husbands name? I'd be curious to know the answer to this...as probably Maddof's wife would be also

LOL -- minus the strip clubs hopefully!

"Separate accounts" have been questioned many times. It's not unusual when people marry, to agree to keep previous holdings separate. There are many reasons for this, most are personal and private. One never knows what the future holds.

When married, the law divides everything equally from that point in time in a 50% ratio if not-contested. It's a team going forward, until the date of separation. It's in both people's best interests; as is the same for people who decide to keep things separate for priorly held "earnings" (a house, car or whatever) -- prior to the marriage.

As far as debt... debt holders can only legally "go after" the person who signed. If held jointly, then yes, they can legally "go after" both.

With a pre-school child and an "almost 10-year" marriage, the child is probably theirs.

The house is still a "mortgage" and in the eyes of the law the house would be shared (if they divorced) since she put efforts into it as well, even if his is the only name on the mortgage and even if he's the only person paying said mortgage (because she pays by his using that money for that purpose and not another purpose).

Her medical issue is almost certainly mixed into his interests.

And she being without an income, definitely means that they need to agree on their courses of action.

[me in socal]

LivingAlmostLarge - I have 401ks from 2 previous jobs. Both were (at the high) about 50K each now about 30K ea. I also Have $2k in a ROTH and another $2k in a 529 for college. I think now that I'm not working, I need to concentrate on paying off debt before saving up again. At this point, I can live on my current budget when (if?) I get a job again. That way, I can snowball the debt payments and get saving sooner. If DH sees me as committed to maintaining a debt-free lifestyle, he will help me out.

This is the second time I've run up debt like this. However, I have a nagging feeling that if we had combined accounts in the beginning and he saw my spending patterns early, he would have been able to help me nip this in the bud awhile ago. Hindsight is always 20/20, no?

KTP - We file jointly.

Seeker - Our insurance is through costco. Never stupid enough to get AAA in CA. Used to have Allstate for 10 yrs then switched to 20th Century now it's been Costo for 3 years now. It's been the best rates for us. They may have a roadside assistance plan too that I can check up on the rates.

Yes, CA is a communal property state so everything is 50/50 for the most part no matter what fancy pieces of paper say. And you're right, the child is ours.

Thanks again for all your critical advice and thoughts. I do appreciate it!

[LivingAlmostLarge]

How old are you? I love AAA in CA, they gave us the best service for everything.

I am trying to predict long term what the repercussions are for not having a joint account when you don't have equivalent salaries. I wonder what will happen in the future.

So then it would affect the future. But for now it's hard to get traction because you have a lot of debt which can and will affect your future savings goals.

[rusty2832]

[QUOTE=Lindahfx;212693]I- consider eliminating the following: AAA membership, netflix, and car maint. fund


I would definitely keep the AAA road club membership in case your car breaks down and you have to call a tow truck. It is a worthwhile expense to keep. I pay mine by the year. I paid the extra AAA Plus dues for years and finally my car conked out and I drove it under 200 miles as far as I could before it totallly died and I got towed back home free. The road club is a keeper expense.

[rusty2832]

[QUOTE= We can bump down to a lower svc level. ....Reduce AAA memb to basic level (now or at renewal in Oct)

Before you take action on lowering your AAA membership services, consider this. If you have AAA Plus, those help calls have priority over regual AAA members; if you have AAA Premium, those members calls have priority over both AAA Plus members and AAA members. Last summer when it was really hot here my car died at a gas station. I waited nearly 3 hours for a tow truck and it would have been longer. The driver told me he because I had upgraded to the Premium option this past year, my call was booted ahead in line. After waiting 3 hours in the sun, while it wasn't really fair to the others that were ahead of me, I was very glad I had opted to upgrade to premium service. My point: you get what you pay for. You may not use it hardly at all yet when you do need car help and you have Premium you are closer to the top of the line and you will get speedier service. This is something that only your family can decide. Is it is worth less money to wait longer for a tow truck to rescue you?

[wnlbutterfly]

Being a substitute teacher that works solely in the grade schools. I can assure you that taking your child out of Pre-K now won't be a problem.
She/he starts school in the fall. Let her spend this time with you now, because she will be going to school for the next 13 years (and hopefully onto college).

She probably already knows everything she/he needs to for K right now...very basic stuff and you can work with her at home. Main things are counting (I believe they have to count to 20 to exit K), basic colors, you can work on printing her name and as long as you read to her/him everything will be fine.

I am certain your child is picking up on the stress over the budget also.