Is my pride getting in the way?

**Nika** · 10-21-2011, 08:43 PM

BK would do absolutely nothing about your childcare or housing payment, so it would only address cc debt.

With your income, it wouldn't just be erased, it would be restructured into fixed payments over a number of years, based on what bk judge thinks you can afford on the tightest realistic budget (which would not include kids ballet lessons or organic food or other things that the family might be accustomed to.

So it is unclear as to how much you would actually have to pay back in BK.
Can you live some place cheaper? Or if your house is big get a live-in nanny that will accept less pay in exchange for a place to live? Have you cut all luxuries or made a budget calculating how much you should try to pay off each month and how many years it would take to pay off cc debt?

lets say you average 9k a month - 1800 childcare, -1900 mortgage, 1800 cc still leaves $3,500 to live on. Maybe it is not possible to live the way you like or lived before you had that cc debt, but it is possible for a family to live on $3,500 if housing and childcare is already paid for. Your kids would not go cold or hungry.

When you made your investment, if it turned out well, you would have kept all the profit, right? You would feel that you deserve it and it was your smart choice that got you that money. Well, this is the flip side of the gamble, and one should own responsibility for both. It was not something that you had no control of like cancer, huge medical bills, disability... It was a choice.

I personally am investing in something risky right now, so I do understand the drive to sometimes take a chance. And I might loose the money, which would totally suck, and I am nervous about it, but I understand that this is a possible consequence I have to accept and thus I can't invest money I DON"T HAVE.

**disneysteve** · 10-22-2011, 05:41 AM

Originally posted by Nika View Post

still leaves $3,500 to live on. Maybe it is not possible to live the way you like or lived before you had that cc debt, but it is possible for a family to live on $3,500 if housing and childcare is already paid for.

I totally agree. You are definitely not bankrupt. Remember, the median household income in the US is about 50K. From that, families pay ALL of there expenses including mortgage, childcare and debt payments. You've got 42K to work with AFTER mortgage, childcare and debt payments. There is absolutely no reason you shouldn't be able to make that work.

Originally posted by JourneyCC View Post

We've cut everything out possible

I suspect that isn't really the case, given what I said above. Post your monthly expenses for us and see if we can't find more cuts for you to make.

**MonkeyMama** · 10-22-2011, 08:00 AM

I don't come up with $3500 to live on. That $1900 mortgage figure obviously does not include taxes and insurance. What about the cost of other insurance, transportation, basic utilities, food for SIX people, etc. No wonder you are drowning. (Income is moot when your basic bills are already above $8000, easily).

Childcare is temporary though, so if you can stick it out 2-3 years, find odd jobs to help, downsize the house is possible, find cheaper daycare, etc., that is probably the route I would go. IT's hard to answer with the little info given, and I am no BK expert, but it doesn't sound like BK gives you much of a leg up anyway from what you said.

**jpg7n16** · 10-22-2011, 12:08 PM

Originally posted by disneysteve View Post

Post your monthly expenses for us and see if we can't find more cuts for you to make.

Agreed. I've seen way to many people say 'there's nothing else to cut!' only to turn around and post $500+/month car payments, or something equally ludicrous.

I'll believe it when I see it.

OP - what was your total income last year? and/or what was your total income over the past 4 months?

**cptacek** · 10-22-2011, 01:28 PM

Your pride might be getting in the way of finding things to cut.

**JourneyCC** · 10-22-2011, 03:10 PM

Thank you guys for your responses. You are right, the mortgage does not include HOA, Taxes or Melloroos, which is about another $800 a month. Utilities/water/trash are running us about 480/month. Grocery is about 900 month for six of us (two kids eat like adults). We run about $250 month eating out. And we cut our satelite down to the basic $30/month connection few channels. We cut our gym, big cell phone plans, eating out (was 450 month, now 250), bank fees and preschool are gone. The only thing we haven't cut out is our kids soccer fees about 150 month (which at this point is a drop in the bucket).

I think one of the above posters hit the nail on the head, it's the other incidentals that are creeping up on us, eating into our living expenses (which one can live on 3900 a month if no other incidentals come up). For example in the last 2 months, one car needed new tires, my son had a $450 dollar anesthesia bill out of pocket, and another kiddo had $680 in dental copays. And the list goes on..... if I budget for all these things, we cannot live on $3900 month.

It seems every time we start to get ahead, these things come pop up.

We are up to our neck, and barely keeping our noses above water for so long. I am just not thinking BK is the way out. I still really think our home is the ticket out when the market turns around.....

Thanks though for your responses!

**LivingAlmostLarge** · 10-22-2011, 03:27 PM

8500 income
-1900 mortgage
-800 HOA/taxes
-480 utilities
-900 food
-250 eating out
-1800 CC
-1800 childcare
-30 cable
-250 cell phones
= $290 left over

now if you make $10k/month then you are running overage of $1790/month. The home is the problem, at $1900+800 = $2700/month it's 27% of $10k but more like 32% of $8500. Not to mention the $480 utilities, and I don't see a category for maintenance and repairs.

I agree with your assessment that the house should go. I think the home is a little much for your income, it's a lot with everything. Assuming a 1%/year maintenance so say $6k/year an extra $500/month for the home it KILLS the budget.

**minnie1928** · 10-22-2011, 07:40 PM

I'd cut the eating out and the kids soccer to free up 400/mth. I like the idea of a live in nanny too. Do you have anything worth selling? What was your tax refund like last year (assuming you had one)? It may be worthwhile to adjust your withholding.

I see it as a short term issue, once the kids are out of daycare that frees up a lot of cash that you can throw at the debt.

**snafu** · 10-23-2011, 08:58 AM

Ignoring the idea of taking responsibility for decisions for the moment...what would you, DH, DKs gain with bankruptcy and divorce? What would you lose? Would it affect career promotions? How would it impact DKs, extended family? These are not decisions to be taken in a cloud of emotion, you need to examine hard facts.

**feh** · 10-24-2011, 09:10 AM

Seems there is more cutting from the budget to be done - $250 eating out per month, $150 for soccer and satellite TV should all be cut.

If that still doesn't make the numbers work, it seems like selling the house is the best option.

**bjl584** · 10-24-2011, 10:08 AM

I don't see a need to declare BK. I do see a need to further cut the budget. Have you ran the numbers on giving up the daycare and staying at home with the kids and maybe working part time or not at all? Also, I would seriously consider selling the house and downsizing.

**papa_squat** · 10-24-2011, 11:57 AM

I definitely agree that downsizing the house my be the saving grace here; going off the $8500/mo income estimate, housing is eating up about 38% of your income! The loss on what the house was originally built for may be hard to swallow, but it is still worth it, especially if you can sell it with money in your pocket that could pay down more of that CC debt. Keep shopping around for lower childcare costs with local daycares and call everyone you can for lower rates on virtually every service you use.

**riverwed070707** · 10-24-2011, 12:17 PM

I find it hard to believe that you've accounted for all your expenses. With 6 people, you don't ever go do anything fun for entertainment? You don't buy new clothes? Are your cars paid off? Are you funding retirement? What about car insurance? Do you take vacations? I don't see the kids activities accounted for in your expenses. Do you buy gifts?

If the kids are all in child care, I presume they don't have cell phones -- why is your cell bill still $250/mo? People who are thinking about declaring bankruptcy should't have expensive cell bills, cable and spend $250/mo going out to eat.

Your house is too expensive for your income without the other obligations. Sell it (yes you may take a loss but it will be worth it) and buy something you can actually afford. Saying that your house is the ticket out is what is often referred to as house poor -- you have all your money tied up in an asset and it's drowning you. You have a great income, you just need to reprioritize. Its not an easy decision to make, but I'd downsize my home before I ever filed for bankruptcy.

**LivingAlmostLarge** · 10-25-2011, 04:45 AM

The other extras might be managable if the house wasn't eating so much income. It's hard to pay a $150 soccer fee if your mortgage is out of whack.

Everyone here keeps saying cut the same thing, here's the deal, this poster will NEVER get ahead with too much house period.

It won't stave off BK because one problem and they'd be SOL. The real problem is they bought too much house period. Cutting things and trying to keep the house is a deck of cards waiting to fall sadly. The affordability is the real problem and culprit. The $1900 doesn't include utilities, HOA, maintanence, etc. So the real cost of the house is like 35%+ of their income.

I bet if they declared BK today but kept the house, it's entirely possible they are back in the same mess in 3 years because the house sent them there. One big repair or damage or a damaged car and they'd be toast.

Is my pride getting in the way?