Anyone got a solution?

[disneysteve]

It would be helpful if you listed all the debts with balances and interest rates, not just the minimum payments.

Tell us about the car. I can tell you that $350/month is really weighing you down. What's the balance and what's it worth (check kbb.com for that info)? You may want to consider selling it and buying something cheaper unless you are pretty close to it being paid for.

Car insurance is $300/mo. on one car? That is awfully high (and I live in NJ, home of the highest rates in the country). What do you mean when you say you'll be dropping that in January? I would definitely be shopping around for cheaper coverage. Do either of you have bad driving records?

Your cable/internet/phone bill is way too high. Cancel cable. If you won't do that, call and ask for their cheapest option. It might be called "antenna service" or something like that. Here in NJ, Comcast charges $11/mo. for the cheapest plan. Landline phone should be about $30/mo. Same for internet. That would put you more around $70 or $80 instead of $140. You could also look into a bundled service from the cable company for all 3. That is usually around $99/mo.

Can you stop childcare while you are unemployed, or will you lose your spots if you do that?

I've got your income at $3,293/mo., not $3,040 by the way. After the expenses you listed, that leaves $258/mo for debt reduction.

Do you have any savings at this point? Any emergency fund?

Since he has good credit (you haven't mentioned how yours is) have you looked into consolidating debt on a low-interest credit card? If he could qualify for a 0% rate for a year or a low fixed rate like 2.9% for the life of the balance, that could save you quite a bit in interest and help pay off the debt quicker.

$200/month for his cell phone is insane. It might be worth running the numbers to see if it makes sense to break the contract and pay the early termination fee to get out of that. You might still come out ahead in the long run.

[LivingAlmostLarge]

That's not enough income period to support a family of 6 regularly and 12 in general. You have 10 kids together right?

So he needs another job, you need a job and you should dump the car.

It's not necessarily that the house is too expensive at $900/month, but it is when you are earning $3k/month with tons of other debt.

This is the reality. You need more income. You will not live long term on that income.

But heck at least you probably can guess that.

[disneysteve]

not necessarily that the house is too expensive at $900/month, but it is when you are earning $3k/month with tons of other debt.

True. Rule of thumb is 28% to house and 36% to overall debt including house. You guys aren't too far off on the house figure but your overall debt payments are 62% of income. That is ridiculous. No wonder you are having trouble. You need to boost income immediately.

You need to find a job right away even if it isn't the perfect job or even in your field. You are collecting $175/week from unemployment. That is equivalent to well below minimum wage, so any job would be an improvement over what you are taking in now.

[hmsmomof6]

Thanks Steve, Ok cable, internet, and phone are al bundled together with our cable company the cable could be lowered about $20.00 a month if we went down to just basic, (we currently have basic with the box thingy) but as internet cable are only forms of entertainment being allowed in the home I haven't pushed the point to much)
Car insurance is for 2 cars his and mine he has a dui on record he got after a bout with depression over failed marriage but has been clean since and as I said will drop in Jan or Feb

Child care I have cut we were paying $400.00 a month (which there mom pays half so its was totaled at $800.00 I got it down to the current $400.00 a month us paying $200.00) We talked about putting them into public school and paying for after school care but, when we worked with the school the reduced us down to our current total so I have reduced that as far as it will go what we pay now would be less than public school with after care.

The car sorry didnt notice typo til you brought it up is actually 306.60 is the cheapest thing I could find that still would fit the majority of us in it at one time its a pontiac grand am bought used still owe 12,000 on it and I bought that when I split with ex as I didn't have a car at all. I am pretty sure selling that is not an option as its the only thing I have to drive at all it is the main car we use it fits 5 of us at a time (he has small truck he uses for work owned outright) I do buy cars used and I use my cars until they die this car I plan on having 8 years or longer or until it dies.

No there is no emergancy fund which I know is bad (we are both rebuilding from messy divorces) And I do plan on working on but his debt freaks me out So I thought I'd get that under some kind of control and then tackle the
emergancy fund or is this the wrong way to think? I just always thought if I'm making 2% on savings and paying %14 on cc interest may as well pay debt down first.


I do not know interests rate on cc's at this time as bf doesnt pay attetion to those (something I'm working on) But balances are close to the following

$9800.00
$2800.00
$1500.00
$200.00
$550.00 18% (store card also cancelling when paid)
$450.00 22% (store card cancelling when paid)
$18,000 (on actually a home equity)(he used it to buy out his ex wife's portion of house)


Cell Phone was high this month normal bill usually $150.00 (he just informed of that) We did run numbers at one time and considered doing this but coming up with that money all at once seems to be issue at present time. So have decided to wait on just the contract to expire. (at least until we figure a way to come up with cancalation fees)

I'm sorry about the misadding but just know that any leftovers I find I am appling to debt reduction.


I have thought about that 0% intrest card. I am willing to do that but I am worried about his self control which hes getting better at but I am unsure if hes ready for that I think we could do that (i have issues with it as my ex would do that then run up debt on cleared cards all over again) Bf says he can do it and thus far has been very good with the plan I have thus far but I still worry because of past experiance but thanks for suggesting that at least I know I'm thinking like someone else and I am not to far off base on it.

[hmsmomof6]

The kids are mostly grown on regular basis there is 6 of us 4 kids and 2 adults on partime there is 6 kids and 2 adults. The rest are grown and on thier own.

[jIM_Ohio]

We owe 148,000 total and the value is currently 120,000. Last year it was valued at 175,00 so we have lost alot.

I have thought about refinancing but was unsure they would do it due to the balance versus the owed amount.

I'll post budget later today as it is on another computer.

This is not enough information.

What was the loan amount for?
How much is the $148k different from last year at this time?
In 12 months do you expect the $148 to be higher or lower?

If you cannot get ahead of the mortgage, you are better off selling, taking the 28k loss as opposed to a 50-75k loss in 3 years.

You need to be making payments higher than $1400 for an extended period of time to get ahead of this loan.

[hmsmomof6]

I expect the total owed to be more as long as we keep making the current amount of $600.00 payment if we could find a way to pay more however it should at least remain the same amount or go down. Currently the $600.00 just keeps us in good graces with the bank and the rest is tacked on to principle.
I do not know what it was last year as I have only been involved with it since spring of this year when we began to merge finances.

[disneysteve]

spring of this year when we began to merge finances.

I don't know to what extent you have already merged finances, but I'd advise you to keep everything as separate as possible at least until this whole debt mess is cleaned up.

Also, you said something that concerned me.

I have thought about that 0% intrest card. I am willing to do that but I am worried about his self control

Are any of the credit cards still being used? If they are, that needs to stop IMMEDIATELY. They should all be destroyed. Nobody should be charging any new purchases at this stage. If you don't have the cash in hand, you can't buy it, whatever it may be. I would keep the card with the lowest interest and/or highest limit locked up just for emergencies.

[LivingAlmostLarge]

still $3k/month isn't a lot to live on.

I would not open a 0% CC either until you get married. He needs to get control of his debt and you need a job so you don't contribute to the situation.

I know you understand this. So good luck.

But seriously you need to talk to him about cutting up CC and getting a second job to pay them off faster.

[belic3000]

Not sure where you live hmsmomof6, but Angel Food Ministry was a godsend when I found it. Prices have gone up since I first bought from them. A unit now cost $30 rather than $25. But the food does go a long way, it doesn't include staples. You'll have to buy those elsewhere. Tis cut my food cost in half for a family of 4. And I use Dollar General to buy my detergents and such. You can do a search to see if there is A Angel Food Ministry near you.

[hmsmomof6]

I havent used CC's in more than a year he stopped using this past summer during merge and finances are merged only in that we are wroking together to pay his debt down we have talked about getting a checking together but thats it so far.

[maat55]

To start, you are going to have to make some very painful adjustments. I found that your current expense structure has your monthly outgo at 3,241 not including the house. This number includes taxes and ins. on house, but no house payment.

Your very basic needs to keep this house are:

House 932.00
T&I 250.00
Elec. 175.00
HEL? 180.00
Trash 120.00
Auto ins 150.00 max (ins. on beater car)
Child care 200.00
gas 160.00
food 600.00

Total 2817.00 allows 476.00 for saving, investing, lifestyle.

To get here, you would have to file BK on CC's and car. This budget has no Cell phone, cable, auto payment and has lower insurance cost. This also does not account for catching up the mortgage.

To not file BK and continue as is means you would have to bring in 4400.00, 1107 more than now, not including future ex payments. You clearly cannot maintain all your expenses, unless extra jobs can make up this difference.

You will need to sell or turn in car and buy a beater.
Cut the cable
Cut the cell
Lower your auto ins.
Work 2 jobs

Despite these expenses, you need to be able to save and invest, not to mention provide clothing and some lifestyle. You clearly need to have an extra job over your current income. You will be fighting this debt for along time unless you cut all nonessential spending or increase income substantially. Even with BK, you will need a strict budget.

[LivingAlmostLarge]

But Maat, that's why it's an income problem. Even declaring BK they'll end up in the same position. They really aren't making enough to support a family of 6.

I hope maybe you can find a job and your husband can get a better job. He needs a better job or a second job. Otherwise you'll end up in a worse position if something goes wrong.

In some ways this is harder than someone with a huge income overspending wildly. That they can curb. You have to make a some tough choices especially regarding employment.

[jIM_Ohio]

I expect the total owed to be more as long as we keep making the current amount of $600.00 payment if we could find a way to pay more however it should at least remain the same amount or go down. Currently the $600.00 just keeps us in good graces with the bank and the rest is tacked on to principle.
I do not know what it was last year as I have only been involved with it since spring of this year when we began to merge finances.

You missed my point-

I know you owe more now than the house can be sold for. You put this number at $148k.

My question was did you owe $148k last year at this time (I think no, I think the amount you owed then was LESS- meaning the amount you owe is increasing each month).

Do you think you will owe more than $148k next year at this time? I think the answer to this is YES.

Right now you need to calculate 3 numbers

1) what is the current mortgage payment needed to pay off the $148k in 30 years
2) what was the needed mortgage payment to pay off in 30 years when you bought house (I think this is the $1400 number)
3) what is the amount needed to pay off mortgage if you owe 10k more in october of 2009 (one year from now).

You don't need me or anyone here to tell you what to do once you see these numbers. To me these numbers will paint the right picture for you, but you need to know these numbers before taking my advice or the advice of anyone else here. Fixing the budget might work, but only if you know the numbers here (you will need more than $1400/month to get this back on track, I think).

Every month you do not make the payment identified in #1, the payment increases by around $65/month. One year from now with 10k more in debt ($800 short*12months=$9600) ammortized over 30 years at 7% would increase payment around $65/month. Compunding will increase this out a few dollars each month. Might get to $75 or so by years end and $100 or so by end of 2009. Each month the hole gets deeper.

The situation is spiraling out of control and your only ways out would be
1) sell now, take the loss you have now. 20k in debt is not bad.
2) pay more now so the debt starts decreasing

If you stay now and let the hole get deeper (not pay the minimum required to stop accruing interest), you will be looking at many more years of work to pay off a house which was not worth the money you put into it.

On my house I financed $352k and will pay around $540k in interest over 30 years
If I had a loan on the terms you have them my $352k loan would have around $700k or $1000k paid in interest. Meaning I paid close to 4X the value of my house to sell it when I retire... I think not- get out of this situation quickly or it will haunt you for a long time.

[cptacek]

son he didnt know got introuble with law just moved in with us and is going to have pay restitution at some point just dont know how much yet also mother of said child is looking for Child support of other kid they have together also do not know how much that will be until courts decide)

Does this mean that he didn't know the son at all? Didn't know he existed until all of a sudden he moved in with you? Maybe a quick paternity test would be in order...I just saw them at Walgreen's the other day. Apparently they are not good in court, but they would answer the question and if you needed something in court, take another test.

If you have kids living with you, shouldn't you be getting child support for them?

How old are the kids? Can they get a job to help out?