Negative net worth.

**sweeps** · 08-21-2006, 07:00 PM

Re: Negative net worth.

Play the lottery?

**creditcardfree** · 08-21-2006, 07:32 PM

Re: Negative net worth.

Work. Work a lot.

Sell their stuff. Maybe all of it!!

Last I heard you really couldn't buy yourself out of debt.

I feel for you in trying to help your friends. I have a dear friend who just doesn't seem to get that all that debt is risky and impacts the future. I'd tell them not to file bankruptcy. I'm sure you are right about paying most of it off in 5-7 years. They just need to take it one step at a time and keep working.

The question is how tired are they of having all the debt and are they willing to work hard to turn it around?

**tabbycat31** · 08-21-2006, 07:59 PM

Re: Negative net worth.

I think that they have to *WANT* to get out of debt before any advice could help them.

I would take all taht stuff and sell what they can, and have them both get back to work (easier said than done since I am out of work).

And have them read DAve Ramsey's "The Total Money MAkeover"

**TinyFish** · 08-21-2006, 08:57 PM

Re: Negative net worth.

That's a sad story. How did they end up so upside down on the house? Just unlucky enough to be in an area that didn't get the real estate 'bubble'? Sounds like they need serious financial CPR. I guess whether or not to declare bankruptsy would depend on what kind of income they could possibly make in your area.

CCard companies probably figure they are making enough payments to make it worth the CCard company's money.

Sounds like they need financial CPR, or a wake up call. Are they in Florida? Maybe they could sign up for that Big Spender guy's show.

You are a good friend to help them out. I hope when you pointed out their situation they realized what they were doing wrong.

-TinyFish

**Bookie** · 08-21-2006, 09:13 PM

Re: Negative net worth.

Your friends are living in a house of cards that probably isn't sustainable, judging from the information provided. My guess is that they will find themselves in bankruptcy court at some point.

They remain "credit worthy" because lenders would rather carry their accounts as assets than pull the plug and accept the loss. So long as they can manage to make the payments, late though these may be, the illusion of viability can be maintained. I've seen people string the process along for years before their debt-leveraged livestyle collapsed.

**yellow heel** · 08-21-2006, 10:04 PM

Re: Negative net worth.

Wow, how did they get in that mess?

**PRICEPLUS** · 08-21-2006, 10:25 PM

Re: Negative net worth.

The situation you described is a tradgedy in the making. The way it is going they may have no choice but to declare bankruptcy. The interest payments alone are a killer.

**autoxer** · 08-22-2006, 04:46 AM

Re: Negative net worth.

Originally posted by b4freedom

They asked about bankruptcy. But, they both have masters degrees.

It doesn't matter if they have doctorates, they are barely treading water. They can't really sell to downsize. They can't sell the house because they owe $30k more than it is worth and they can't even sell the car that still runs if they are under. The lein won't release the title until they get paid. Those debts are costing probably $4k in interest and late fees each month. They need to go see an accountant and an attorney to consider bankruptcy. If they ignored the problem for a long time, I don't think they can turn it around that quickly.

**Broken Arrow** · 08-22-2006, 05:16 AM

Re: Negative net worth.

Wow. Thanks for making me feel better about MY negative net worth.

Originally posted by Sweepsplayer

Play the lottery?

Now that's funny, right there!

**disneysteve** · 08-22-2006, 05:41 AM

Re: Negative net worth.

Originally posted by b4freedom

$70k+ in credit card debt (various rates)
$8k loan on a time-share @ 16.75% (You could buy the same timeshare for about $1500 at a discount websites).
$210k mortgage. They tried to get a third HELOC, or refinance, and the house only appraised at $180k. They have variable interest rate. I'm too embarrassed to tell you how high.
$10k car loan on a car that no longer runs, sits in driveway, needs new engine.
$8k car loan on a car that was totaled and is long gone
$15k on the car they drive now (I'm certain it's not worth $15k).

I'm not so sure they can get out of this hole without filing for bankruptcy, but here's what I would suggest in the short term.

1. Destroy the credit cards and don't ever use them again. Call each card company and request a lower interest rate.
2. Sell the time share. Even if they only get $1,500 for it, it would reduce their debt by $1,500. Every little bit helps.
3. Get rid of the variable rate mortgage and lock in a fixed rate if possible to at least stem the bleeding there.
4. Sell the car that doesn't run. A friend of mine just got $2,200 for her car that needed the engine replaced and hers wasn't worth anywhere near 10K. The car is worse than worthless to them now so whatever they get for it would help lessen their debt.
5. I'm curious about the 8K car loan. Were they uninsured when they totaled it? Why didn't insurance take care of that one?

Most importantly, they both need to get jobs! With no regular income, there is no way they can possibly hope to repay all that debt.

**LuxLiving** · 08-22-2006, 05:42 AM

Re: Negative net worth.

Sweepsplayer - you are a hoot!!

But, I have to disagree w/the bankruptcy thing Autoexer. 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. Stop vacationing, sell the junk, get regularly paying jobs, batten down the hatches, tighten the old belt a notch or two, cancel the cable, stop eating out, QUIT DEBTING and do the right thing and pay their creditors what they owe them. No one held a gun to their heads and made them take on these bills! Get that house and car rightside up and then sell the suckers! Or see if they can sign the house back over to the lender w/a Deed In Lieu of Foreclosure.

GRRRRRRRRR - Sorry if I'm offending some of you but my parents took a major hit on their property that they were counting on for their retirement when they held the note on the sale of 900 acres. The deadbeats made ONE payment and were able to hang on for over a year before folks could get them out and then they filed bankruptcy and it stopped the foreclosure proceedings for over another year - meanwhile my folks were w/o that income for two years. YES - they checked their credit before they sold. Good debtors gone bad. Took years off my parents life - saw them stressing and aging about it daily!! Finally one good lawyer and a decent judge later they got their property back and resold it and are now enjoying a nice retirement. Not as healthy because Dad had a stroke and a heart attack in those two years. Who is to say what caused it, but I do strongly believe those deadbeats contributed mightily to the decline in his health!

I also was a collections specialist for years so I'm also geared that way. BUT shoot fire those friends of his are doing nut'in but leeching at this point. Bankruptcy - NO WAY! Shoot, get out there and work two jobs a piece, pick up cans, do whatever it takes - start bailing the water and turn that sinking ship around and head back to shore!!! OMGosh - I am so intense about this subject. Sorry! But my motto is "Debts you made 'em - Debts You Pay 'em!"

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!!! You wouldn't suggest it if you had watched your Dad with a feeding tube down his throat in ICU because some scank won't pay what they AGREED TO PAY. You just wouldn't suggest it! R.E.A.L.L.Y. - you wouldn't!!

**sakigt** · 08-22-2006, 06:26 AM

Re: Negative net worth.

I agree LuxLiving. My mom worked VERY hard to repay all of her debts without filing for bankruptcy. When lenders would call to harass her about how late everything was she would always say: "At least Im not filing for bankruptcy...be patient, I WILL pay you back."

And she did.

If one consultant is more successful than the other Id suggest one of them get a "real" job with a consistent income. What a terrible situation to be in.

**Fern** · 08-22-2006, 08:10 AM

Re: Negative net worth.

Many people declare bankruptcy with MUCH less $$ in debt. I am the first one to say take responsibility for your actions, but with that kind of debt it nearly seems a lost cause unless they take drastic action with a debt counselor immediately.

**Ima saver** · 08-22-2006, 08:20 AM

Re: Negative net worth.

I have to agree with you Lux. Those people have master's degrees, they should both be out working as hard as they can and quit going on vacation, charging, etc.

Negative net worth.