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Husband seriouslyly screwed our finances!!!

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countryfire14
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Husband seriouslyly screwed our finances!!!  Reply with quote  

Long story short, my husband has severely racked up debt and ruined his credit.

He owes:
$14k on a credit card
Has a loan around $4000-5000 at a VERY VERY high interest rate.
Bought a brand new car at 11% interest, after roll over from his old car loan, fees, the car itself, etc. He owes approx $23k on it. Payments are almost $500 a month. Trade in and sale values are about $14-17k.
He did a school but didn't finish and owes them $20k. It is NOT a student loan and they will not work with him, it was something with stocks and he was supposed to pay from his profits...

Now, it wouldn't be as bad to work all of it out except he is going to be losing his job in a couple of months and next month takes a $400 pay cut. He works a second job and still barely making it. We were separated. During this time. So i had no idea how bad his finances had become. We own our house and wanted to move to some where with cheaper payments, renting really isn't an option because of my situation. We found land Wed like to buy as well as a modular home that'd lower our payments by $300+ a month. But his credit is so bad I don't know how we would get it. Lower his car payment seems like its going to be necessary but if we trade it in we will have $9k or so leftover to pay on it plus the other vehicle. My vehicle is slowly dying on me. I'm currently not working, looking but so far no luck. My credit isn't great because I have very little credit history as I have been a stay at home mom so couldn't put much of anything in my name (and most times if we could it would have resulted in higher interest rates due to my credit score.)

I'm really stuck here on what to do! I feel trading in the car for something much cheaper (which would also lower car insurance on top of lower cca payments) would be the smart choice but everyone I've spoken to has said no and that there is no way we'd get financing... I know we are going to have to move, so I need to figure out how to get the 10% down and get his credit score up so we will be approved.
Post Tue Jun 16, 2015 2:56 am
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Wino
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Credit cards are unsecured, so if you stop paying, their best bet is to sue you, but in the meantime, you get some breathing room. I don't know the details of the not-school-loan, but you can probably also set them aside.

The rent/house payment, utilities, food, car, and gas need to be kept current. Once those are paid, look to the next bill. If you don't have enough for the stock swindlers, then don't pay them. The same goes for the credit cards.

The first priority is for DH to get another job. He's losing one, but the last time I got a job, I was looking for a job, so that's the way to get a job. What are his prospects? What are your prospects? Fast food doesn't pay much, but it pays more than nothing. What are your options? What about savings? What about unemployment?

We need more details, but you need to prioritize, and that's what I've done a short list (too short, really) for above.
Post Tue Jun 16, 2015 6:02 am
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countryfire14
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Unfortunately the credit. Card is through his bank so it locks up his entire bank account if he doesn't pay it, and we don't want to hurt his credit more as we are going to have to move and its going to have to go in his name...
The company that took over the school stuff calls me daily, he hasn't paid on it in quite some time so it went to collections.
He has a second job right now which is helping to cover the "outside expenses" (gas, food, and misc necessary things), he's military and doesn't know exactly when he is getting out but has to go through some things there to learn about finding civilian jobs or something (they haven't gotten that far into it so I'm not sure exactly what it is), he can't quit so has to wait til he's out to find a replacement job for that or at least wait til he has a timeframe to get something lined up.
I'm currently a full-time student but not close enough to my degree to use any of it towards a job. I have no experience so gas stations, retail, etc are my options. I have been filing out application since March without any luck. My school does a work study program in the fall so waiting for information to be posted on that to apply.
No savings anymore, I used a good chunk on it for my attorney and the rest he used on his furniture and such when he moved out. No unemployment for me since Ive never worked an on the books job. Once I am working we have to worry about paying childcare costs though and not sure it will be a benefit at all, we may take a hit financially instead.
Post Tue Jun 16, 2015 12:35 pm
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littleroc02us
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I noticed you said you cannot rent due to your situation. What does that mean?

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Tue Jun 16, 2015 1:47 pm
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countryfire14
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quote:
Originally posted by littleroc02us
I noticed you said you cannot rent due to your situation. What does that mean?


Custody things with my oldest, owning is 100% better option for that situation and will much more likely keep us out of court (which will run us an easy $5k, likely more.) Renting in the town we have to live in actually costs more than our current mortgage is anyway even if we got a place with less bedrooms.
Post Tue Jun 16, 2015 2:20 pm
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littleroc02us
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I understand. The other question I have is you keep using the word "He owes this and that", so are you planning on divorcing since your not saying we? If your going to work together on his debts and he's willing then these are the things you'll need to work on.

1. Sell the new car and take out a loan in your name to pay for the difference that it doesn't bring in a private sale, price found on KBB.com.

2. Buy a cheap vehicle for around 2k.

3. As Wino stated make sure you keep a roof over your head, buy food and clothing. Don't worry about your credit after you sell the new car and get a loan. Credit cards and private student loans will just have to wait for you to negotiate with the collection agencies. It's the only way you'll get breathing room.

4. Housing-You'll need to decide if you have equity in your current home and what comps in the neighborhood sell for and get it sold asap. Then if your working on this together, I'd look for a small home, but since you keep mentioning custody it sounds like your not working toghether so I'm not sure what to say about that.

5. If the debts are in his name then if your breaking off, then that's his problem.

Good luck, this seems like a very difficult situation to be in and without more facts it's hard to give my opinion.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Tue Jun 16, 2015 3:45 pm
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oldguy
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About $62,000 in debt - and his only asset is a $14,000 car. lol, sounds like a kid, how young is he?

Can he re-up in the Military? At least he would get housing & food. He probably has learned to stay away for Diploma Mills and Car Dealerships - so that's a plus. If he can re-up and stay in the Service for another tour, that might give him time to grind thru most of the $62k, as well as build some credit.

For you - you mention that renting isn't an option - IMO that would be your best option. Sell the house, capture whatever equity there is and get an apt.[/i]
Post Tue Jun 16, 2015 3:51 pm
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countryfire14
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We haven't officially moved back in together, he's staying on base currently and I guess since it's all in his name I just say he, partly out of habit from the past few months of being apart.
I can't get a loan in my name with no income and basically no credit history my only option is a secured card. But we are trying to get back together, its just a matter of working through some issues and sorting out financials.

Our house appraised for $140k or so when we bought it, I've been looking houses for sale/recently and we could possibly get about that much for it compared to what I've seen sold, nearby, of course there weren't any exactly the same but comparable. We owe about $126k on it so we'd have a bit left over after the sale depending on fees and such. We're actually waiting to hear from our realtor to make an appointment with her. Even going down one bedroom from what we currently have, our mortgage wouldn't go down much at all maybe $100 which is why we are looking at land and a modular which would actually bring it down about $300+.
The custody stuff, isn't with my husband. My oldest son isn't his so I have to deal with custody stuff for him regardless. My ex will take me back to court over anything he can and he usually ends up getting his way.


quote:
Originally posted by littleroc02us
I understand. The other question I have is you keep using the word "He owes this and that", so are you planning on divorcing since your not saying we? If your going to work together on his debts and he's willing then these are the things you'll need to work on.

1. Sell the new car and take out a loan in your name to pay for the difference that it doesn't bring in a private sale, price found on KBB.com.

2. Buy a cheap vehicle for around 2k.

3. As Wino stated make sure you keep a roof over your head, buy food and clothing. Don't worry about your credit after you sell the new car and get a loan. Credit cards and private student loans will just have to wait for you to negotiate with the collection agencies. It's the only way you'll get breathing room.

4. Housing-You'll need to decide if you have equity in your current home and what comps in the neighborhood sell for and get it sold asap. Then if your working on this together, I'd look for a small home, but since you keep mentioning custody it sounds like your not working toghether so I'm not sure what to say about that.

5. If the debts are in his name then if your breaking off, then that's his problem.

Good luck, this seems like a very difficult situation to be in and without more facts it's hard to give my opinion.


Last edited by countryfire14 on Tue Jun 16, 2015 4:31 pm; edited 1 time in total
Post Tue Jun 16, 2015 4:18 pm
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countryfire14
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He's 26. I think he finally is SLOWLY figuring out finances, before we separated I took care of all of it and we were doing pretty good, we split and he went money crazy.
He's being forced out of the military, so no option to stay in or he'd be in another 3 or so years and I could get this all cleared up.
Apartments are only about $100 cheaper than our current mortgage, and I can't see cramming my kids into an apartment and forcing them to give up their dogs as well, for only $100 a month. Houses for rent are more than my mortgage currently is now. If we do rent my ex will take me back to court in a heartbeat which will cost me minimum of $5k upfront and likely lose time with my oldest son.

quote:
Originally posted by oldguy
About $62,000 in debt - and his only asset is a $14,000 car. lol, sounds like a kid, how young is he?

Can he re-up in the Military? At least he would get housing & food. He probably has learned to stay away for Diploma Mills and Car Dealerships - so that's a plus. If he can re-up and stay in the Service for another tour, that might give him time to grind thru most of the $62k, as well as build some credit.

For you - you mention that renting isn't an option - IMO that would be your best option. Sell the house, capture whatever equity there is and get an apt.[/i]
Post Tue Jun 16, 2015 4:23 pm
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Wino
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You're going to have to start making smart decisions. The first is probably to stay in the house. You won't get much bang for the buck, and you have $14K equity. If you sell, you'll be lucky to see $4K. Not worth the hassle.

Let me say again, just look at food, rent/house payment, utilities, transportation, in that order.

Transportation means getting rid of that car loan and getting a beater. I drove a 15 year old car with no air conditioning in Houston TX for three years when I first started out. If you do better than that, then you're OK. A $9K loan with a $2K car is better than a $23K loan with a $14K car.

The credit card and stock school can keep calling. Tell them, "I have no money. When I have money, we can talk." Then hang up. If they call back, tell them not to call so often, or you'll file a complaint with the Consumer Financial Protection Bureau for harassment. Make sure you keep a record of their calls, each and every time they call, write it down, and write down the conversation. Note time, date, the person's name (if they won't give their name, hang up).

The phrase "You can't get blood from a turnip" comes to mind.

Once you prioritize, you'll start to see some breathing room. The main thing, though, is to stop doing stupid stuff with money ("Stupid stuff" is not meant to sound derogatory, but I cannnot come up with a better way to state it.)
Post Tue Jun 16, 2015 4:40 pm
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countryfire14
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When we discussed moved we were considering long term, we know once he gets out it will be extremely hard to afford this house. Even without the debt payments it'll be rough. If we could sell now and lower our mortgage payment that's give us the extra $300+ to put towards debts while we still have it. Then when we dont we wont be struggling as much with making sure we have enough for basics if things get tight for a while....
We're going this weekend about trading in the car since we can't do private sale without paying it off... We could possibly sell privately for $17-18k whichd help but we'd need that extra $5k for a clean title. He's going to see what quotes he can get for trade in and what cheap vehicles he can find. But he's not allowed to go car shopping without me or my dad (dad's a mechanic so can make sure no MAJOR issues like transmission and such and help us get lower prices if minor issues) and I'll be there to make sure he's not going crazy spending out of budget.
The credit card has to be paid (part of his counseling at work he had today) and even if they didn't make him pay it, his bank account where his paycheck goes would be locked down and he'd have no money at all.. I'm making him call to see if its canceled if thered work out a payment plan or something.
As far as the school... He's been ignoring that he owes it, they only call me for some reason and its ALWAYS a recording. I have the records in my phone of when they call and its near daily even Saturdays. I think I'm going to look up the company for a number and tell them this isn't his number and they need to stop calling once he gives me access to his credit reports
We had minimal debt before the split (mortgage, his old card, and a credit card only I used-since he obviously can't handle a credit card and made sure it was paid off every month.)

quote:
Originally posted by Wino
You're going to have to start making smart decisions. The first is probably to stay in the house. You won't get much bang for the buck, and you have $14K equity. If you sell, you'll be lucky to see $4K. Not worth the hassle.

Let me say again, just look at food, rent/house payment, utilities, transportation, in that order.

Transportation means getting rid of that car loan and getting a beater. I drove a 15 year old car with no air conditioning in Houston TX for three years when I first started out. If you do better than that, then you're OK. A $9K loan with a $2K car is better than a $23K loan with a $14K car.

The credit card and stock school can keep calling. Tell them, "I have no money. When I have money, we can talk." Then hang up. If they call back, tell them not to call so often, or you'll file a complaint with the Consumer Financial Protection Bureau for harassment. Make sure you keep a record of their calls, each and every time they call, write it down, and write down the conversation. Note time, date, the person's name (if they won't give their name, hang up).

The phrase "You can't get blood from a turnip" comes to mind.

Once you prioritize, you'll start to see some breathing room. The main thing, though, is to stop doing stupid stuff with money ("Stupid stuff" is not meant to sound derogatory, but I cannnot come up with a better way to state it.)
Post Tue Jun 16, 2015 8:22 pm
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littleroc02us
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You mentioned school. Would you be able to take a break with that idea and find some kind of a job to do small business wise like mowing lawns, picking weeds, planting flowers, sewing,etc. Or could you deliver pizzas, wait tables for tips? More income would help this situation.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Tue Jun 16, 2015 8:55 pm
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oldguy
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[/quote] a full-time student but not close enough to my degree to use any of it towards a job.
quote:

I agree with littleroc - it's time to put schooling aside and start earning.



We're going this weekend about trading in the car since we can't do private sale without paying it off... We could possibly sell privately for $17-18k whichd help but we'd need that extra $5k for a clean title. He's going to see what quotes he can get for trade in and what cheap vehicles he can find.
quote:


No - he needs to stay away from 'trades', that's how yow you overpay - plus get 15% loans. Here's what I've done. Advertise (craigs list, etc) and find a buyer. Set up a meeting with the lender - the lender takes the buyer's money, signs the title over to the new owner, and gives you dh a note for the shortfall (about $5000).

And then you can look for a used car (not a beater) get one with only about 100,000 or 120,000 miles, maybe 8 or 10 years old, a small Japanese car (reliable) for about $4000 (maybe your lender will carry that loan?)
Post Tue Jun 16, 2015 9:11 pm
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countryfire14
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I've been looking for a job for months, and nothing has worked out.. School isn't interfering at all with it so definitely not willing to consider a break from school right now. I check daily for jobs on various sites, with the school, have checked craigslist, have accounts on sitter sites, stopped by local owned stores, done a ton of applications and followed up on them. But no one wants to hire someone with no experience right now...

quote:
Originally posted by littleroc02us
You mentioned school. Would you be able to take a break with that idea and find some kind of a job to do small business wise like mowing lawns, picking weeds, planting flowers, sewing,etc. Or could you deliver pizzas, wait tables for tips? More income would help this situation.
Post Tue Jun 16, 2015 9:57 pm
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countryfire14
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I already stated in the original post that I have been looking for employment, quitting school won't help that any.
I dont see him getting another loan for anything with his credit and debt to income ratios which is why we were doing trade in. He'd have to get a loan to cover the remaining on his new car AND a loan to cover another vehicle, The lender doesnt have a location nearby, if he's able to get a personal loan somehow for $5k+ and a loan for another vehicle, how would he do that?


quote:
Originally posted by oldguy

a full-time student but not close enough to my degree to use any of it towards a job.
quote:

I agree with littleroc - it's time to put schooling aside and start earning.



We're going this weekend about trading in the car since we can't do private sale without paying it off... We could possibly sell privately for $17-18k whichd help but we'd need that extra $5k for a clean title. He's going to see what quotes he can get for trade in and what cheap vehicles he can find.
quote:


No - he needs to stay away from 'trades', that's how yow you overpay - plus get 15% loans. Here's what I've done. Advertise (craigs list, etc) and find a buyer. Set up a meeting with the lender - the lender takes the buyer's money, signs the title over to the new owner, and gives you dh a note for the shortfall (about $5000).

And then you can look for a used car (not a beater) get one with only about 100,000 or 120,000 miles, maybe 8 or 10 years old, a small Japanese car (reliable) for about $4000 (maybe your lender will carry that loan?)
[/quote]
Post Tue Jun 16, 2015 10:03 pm
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