What should our next move be?

Question

Okay we have a mobile home. We owe $25,000 on it after nine years. No missed payments. We have a 2004 Kia spectra. We owe $11,000 on it. We have a 2004 Trailblazer and we owe $16,000 on it. We have no credit cards and no one will refinance ANY of what we have.

I want to move but obviously our house won't sell for what we owe. We can't get rid of the Kia because again its worth less than what we owe.

My husband works full time and has a great job. But overtime has been cut. So we really have no extra money. I homeschool our oldest and we have a one year old as well. I have no experience and no way to get any unless I pay for childcare. Which would defeat the purpose of having a job.

Is bankruptcy our only option? Please only serious answers. We are at a total loss. We are in our early 30's and just want to actually start living and have a home. Not live in a trailer park raising our kids.

Answer 1

Your problems began by paying too much for the cars and not putting enough down which put you upside down on both. Apparently you did not put enough down on the mobile home as you find yourself upside down there too. Learn from that and do not allow that to happen again. If you can't put 25-30% down on future purchases, you can't afford the item.

As far as getting out of your current situation, it involves a simple concept. Living within your means. You can do that in one of two ways (or a combination of both). Increase your earnings or reduce your expenses. Sounds like you want to live better which means you won't be reducing your expenses. So you'll need to increase your income. You say your husband has a great job. But it obviously is not great enough as it won't support your current lifestyle let alone the one you want to increase to. He has to either get a better job or you need to find the job you say you don't want to go after.

As far as the bankruptcy option, you will probably lose both cars the home and may still owe some money on each. You will also have ruined your credit making it impossible for the next 7-10 years to buy a car or home on credit. You have to rethink your priorities. Both in the lifestyle you want to reach and how hard you are willing to work to get there. Good luck.  

Answer 2

It is most unfortunate that you are in such a position, had you been in the UK, government help would be available. However, you are not, I am not familiar with the procedure in the US but I would have thought that there was some governmental means of alleviating the situation. I am glad that you wish to drag your family out of the trailer park, there but for the grace of God go I.  I do hope you find a solution, I am sorry I cannot help, except to give you moral support.  

Answer 3

Clearly you're doing all you can in terms of keeping your expenses low. And your husband is working his socks off too.  It makes me mad that people who deserve better get stuck in this kind of trap. Obviously I share the same sentiments as Lord Percy (he and I are fortunate to live in the fab country of France, and know how different things could be if we hadn't had our luck).  

One thing you could consider is working from home as a childminder, caring for someone else's child along with your own. This would bring in extra income that you could save in order to get somewhere better.  That means a lot of work for you, but could bring some extra company for your own kids.  I hope you find a solution. Good luck.

Answer 4

May I be honest with you?

By buying things you cannot afford and getting upside down in your loans isn't going to help by moving, filing bankruptcy, consolidating, selling things, and buying more things. It's time to deal with what you have and change your patterns before moving on.

Bankruptcy may or may not be an option for you. Only a lawyer and trustee can tell you whether you qualify, not whether you want to or don't want to file and not whether you can or cannot sell or own what you want. Bankruptcy is based on income, assets and liabilities. It sounds like you may qualify but if you simply run out to get a new home and two new cars, you'll be right in the same spot as you are now. How will bankruptcy help you??? If you get a Chapter 13 bankruptcy, you are only going to repay your debts anyway. It sounds like it's time for a lifestyle change.

It doesn't matter if you live in a trailer park or a cardboard box as long as you have love, respect and integrity. Don't worry about what the Joneses think of you. They're broke. You don't have to be.

Live within your means and stop making the mistakes of getting homes and cars and things that you cannot afford. You are paying more from interest to have what you have than items are worth. Save credit for assets, not liabilities. As for the home, you have to live somewhere and it makes more sense to have a payment that you can afford than a payment you cannot afford. If worse comes to worse you are better off renting within your means than buying above your means.

You're in your early thirties, giving you a major advantage over others in your situation in their fourties, fifties or golden years. Learn from the mistakes you've made so you don't relive them over and over. Don't blame yourself and don't beat yourself up. Get out of the situation by setting and achieving your goals but be realistic.

Between the house and cars you are listing $52,000 in debt. What's the income like? What are the values of the home and cars??? What can you sell them for (not always the same as value)? $52K in debt is alot for a $20K income but not so bad with a $60K income so you're not really disclosing enough information. You may or may not qualify for bankruptcy and that should be a last resort anyway.

You should look at ways to increase income and/or reduce current expenses. The fact that you don't have credit cards is actually a wonderful thing. Who cares if you don't have savings or extra spending money... at least you don't have huge debts.

Why do you have two cars? Get rid of one and while you may still owe some money, you won't be paying for gas and insurance and maintenance on it meaning what you owe will eventually be reduced to a zero balance freeing up some money in your budget.

Maybe you can't work full time but why not consider part time or doing something from home... tutoring other home schooled kids? selling on ebay? teaching computer skills? taking in laundry??? Be creative here.

Don't try to worsened your credit by thinking bankruptcy, foreclosure or repossession. Work out a plan for repayment. Refinancing only shifts who you owe and may reduce interest by pennies. Be logical. You'll need good credit when the time comes for a nice home you can afford. It may not be now.

What expenses do you have that you really don't need ... cable tv? cell phones? dinners out? magazine subscriptions? expensive high speed internet? Do you have things around the house that you can sell and apply the money to your debt??? Remember that $2 here and $10 there adds up quickly and can pay off what you owe and/or give you more spending money for needs instead of wants.

Has your husband considered a part-time job? I work two jobs. My wife is disabled.

Get to the library and check out the books by Dave Ramsey. He doesn't give magical formulas but hope and inspiration to the working class families who has debt. There's a light at the end of the tunnel... nand it's not a train.

Try to save money for a cushion. What if something happens to health or husband's employment if you are having troubles now??? What happens with the need for home or car repairs???

Review your budget carefully. You don't have to give up everything and live like your Amish but your wish list seems to be increasing.

Be realistic.

Again it doesn't matter where you live as long as you have a family with love. Save your desire for Prada, Gucci and Lexus for later in your life. At 30+, you have time to achieve your long term goals but work in short term and do whatever you have to do.

Maybe bankruptcy is the answer but there are more cons than pros.