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My wife and I are in a pretty dire financial situation. Due to severe depression and anxiety, I've been in and out of crap jobs since 2008 and in various states of unemployment and underemployment. I pretty much don't have a career at this point, and on top of that we live in Alabama, where we constantly trade 1st and 2nd place with Mississippi for things like unemployment, poor education, infant mortality, death by misadventure, morbid obesity and such. I'm currently working at home as a transcriptionist, which goons in this forum have been known to make decent money off of, but I just can't make it work for me. My wife and I bought our house at the height of the bubble when I was much worse off with my mental state and generally confused with where my life would be taking me. It was a dumb thing to do when you're unsure of the future. So of course we've been underwater for years now and things don't seem to be getting any better. Currently I have about $85k on the mortgage, and the highest estimate I can get for selling is $45k. We've been living paycheck to paycheck so far in 2014 when I got fired by my latest job and started the transcription thing. Money's tight, but we do not have frivolous spending or debt, besides student loans. We have no savings anymore. Making it worse, I'm trying to pay for much needed therapy and medication. We barely make the mortgage payments, but we're a car accident or medical bill away from things going bad. I want to leave town and go to a city with better opportunities for us, but there's the house. My plan is not to move somewhere and hope for the best, but to find a job first and decide if we can stand living wherever it is, and also have reasonable prospects for my wife's field of work. I'm thinking of starting the short sale process, but I'm unsure if it's a good idea. On one hand, we'll be starting from scratch and living with damaged credit for a while. On the other, I'm just waiting for things to get better here without being able to do anything about it. Is this a good idea? Or at least a not horrible idea?
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Aug 28, 2014 22:02
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The only advice I can give you is that short selling your house could affect your ability to rent. The few people I know who did it pretty much just found somewhere else to live, stopped making payments, and told the bank they wanted to do a shortsale. Your mileage will vary. Don't forget you will have to claim some of the difference between the selling price and the loan value on your taxes. Don't let that bite you in the rear end with the IRS.
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Aug 28, 2014 22:52
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If you are going to move, can you find a tenant? Being a landlord sucks, but it's better than the alternative. Speaking of alternatives, if it were me, I would rather default on the student loans than short sell the house.
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Aug 29, 2014 00:54
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Have you tried modifying your mortgage under HARP? I did that for my father who is slightly underwater on his home and its been great. His payment went from 1280 to 890 a month with something like a 2.3% interest rate which rises to a max 3% after some period of time (It's been a while since I did it). If you make two years(?) worth of payments on time they knock 5,000 of the principal of the loan for being a good boy. If you don't qualify for HARP your best bet is to just stop paying the mortgage. Your lender will either find some way to work with you OR they'll take 2+ years to have you legally removed from the property. Hopefully giving you enough time to get some cash together to go rent somewhere. Your credit will be pretty hosed if you take this option though.
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Aug 29, 2014 01:37
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adorai posted:If you are going to move, can you find a tenant? Being a landlord sucks, but it's better than the alternative. Speaking of alternatives, if it were me, I would rather default on the student loans than short sell the house. Any rent income wouldn't nearly cover my mortgage payment. PromethiumX posted:Have you tried modifying your mortgage under HARP? Yeah, I don't qualify for HARP. Wouldn't foreclosing be worse than a short sale? I was under the impression that a short sale was less bad.
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Aug 29, 2014 05:07
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Why would the bank agree to the short sale and taking the hit?
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Aug 29, 2014 05:43
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Zapf Dingbat posted:Yeah, I don't qualify for HARP Is this because you're not current on your mortgage? What makes you think a new city will change everything?
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Aug 29, 2014 11:51
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spwrozek posted:Why would the bank agree to the short sale and taking the hit? I don't know. I plan on sending in the paperwork and financial information soon and seeing what they say. I'm also not sure what the difference will be given that the bank is the Alabama Housing Finance Authority and not a private entity. They gave that young stupid me a no down payment mortgage under a program that involved some sort of Hurricane Katrina relief. Bloody Queef posted:Is this because you're not current on your mortgage? I am current on my mortgage, but that's not likely to stay that way for very long. I've whittled my savings down to $500 because of an essential car repair, plus I was sick for a week last month and couldn't work, both putting strain on a fragile situation. Another month like that and I'll start missing payments for sure. I'm not entirely sure a new city will change everything, but it could get me a livable wage at least, and a chance to try to get a career started. I figured expanding the job search outside of this small city would improve my chances of not failing. I suppose that's a whole other issue, though, the depression, joblessness, unemployability, and all that. I'm trying to possibly relieve some of the pressure about the house so I can more easily deal with the other things. Edit: I should clarify that I don't qualify for harp because it's neither a Fannie nor a Freddie loan. Zapf Dingbat fucked around with this message at 14:48 on Aug 29, 2014 |
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Aug 29, 2014 14:44
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You may qualify for HAMP or even your lender's specific in house programs. It's likely that there's a local housing counseling agency you could make an appointment with and visit that would be able to help you out. Depending on your specific situation, there's a lot of options, you just need someone to go over what's available and what your state's foreclosure proceedings could be like if things went that far. http://portal.hud.gov/hudportal/HUD?src=/i_want_to/talk_to_a_housing_counselor http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=AL
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Aug 29, 2014 17:38
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The ideal situation would be to avoid short selling your house if at all possible. Not that it isn't an option on the table but I would see if the goon collective of BFC can help you figure out how to hang onto it. With that in mind, how about changing the conversation from "thinking about short selling my house" to "help me avoid short selling my house." I would start by doing the normal BFC routine. List your incomes along with your bills/debts and lets see if we can help put together a budget that gets you on track. Maybe there are a few options that you haven't thought of that folks here can help point you towards. edit: I would also recommend discussing a little bit about what you and your wife qualifications are. If you are going to throw a hail mary pass by dumping everything and leaving Alabama you're going to want to make certain that you're not going to end up in a worse situation by being homeless in a new town. TouchyMcFeely fucked around with this message at 17:43 on Aug 29, 2014 |
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Aug 29, 2014 17:38
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mastershakeman posted:You may qualify for HAMP or even your lender's specific in house programs. It's likely that there's a local housing counseling agency you could make an appointment with and visit that would be able to help you out. Depending on your specific situation, there's a lot of options, you just need someone to go over what's available and what your state's foreclosure proceedings could be like if things went that far. Hmm, I didn't know about HAMP. I'll look into that. You're right, I'll go talk to one of these HUD people to see what they say about the situation. TouchyMcFeely posted:The ideal situation would be to avoid short selling your house if at all possible. Well, here we are then: Bills: Rent/Mortgage $797.87 Phone $113.70 Internet $29.99 Electricity $124.97 (year-long average) Water $42.00 Natural Gas/Propane/Oil $60.68 (year-long average) Netflix $7.99 Groceries $450.00 Gasoline $110.00 Medical $75.00 Car Insurance $156.20 Health Insurance $180.96 Student Loan Payment $223.72 Therapist $180.00 Total: $2553.08 Income: Me: Anywhere from $1,200 to $1,500 (pre-taxes) Wife: $1,843.24 (post taxes) My wife works in the printing industry as a pre-press artist, which means she's not on the creative side of things but on the technical, let's-make-sure-this-prints-out-correctly side. She doesn't want to be a purely creative graphic designer, which limits our options I guess, but there are a lot of printing companies out there. As for my qualifications and experience, that's a can of worms. I can't settle on anything, and my resume shows that. My first real mistake was thinking I wanted to be in TV, going to school for it, and then realizing that the unstable people that work in TV plus the high amounts of stress involved don't sit well with mental illness. This was before meds and therapy. Have at it.
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Aug 29, 2014 21:17
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Hello, I will weigh in on this to maybe prevent a decision that has consequences you don't know about. I understand your situation. I got laid off in 2006 and did a short sale in 2007. I also used to work for a mortgage lending division of H&R Block, and I am now an attorney in Florida. I don't know if there are any Alabama laws on this issue, and I'm not admitted to the Alabama bar, but these are important factual IRS considerations: 1. A short sale in your situation will create a $40,000 income recognition event - meaning, if your home is encumbered by 85k and it's sold for 45k, the IRS will consider that to be $40k of income recognized above the line. That does not mean that you will owe taxes on the entire 40k, it just means that 40k is recognized and added to your gross income. There was an IRS exemption for this income between 2007 and 2013, but that exemption has not been extended to the 2014 tax year. 2. A foreclosure will result in a sale for which you will recognize a gain or a loss for tax purposes. I am speculating on this because I don't know the Alabama market for real estate foreclosures, however, a rough estimate of 65% of market value for a foreclosure sale is pretty standard in my experience. This would be a sale of about 29k which would be applied against the 85k debt. You would recognize a 56k gain. Either way, I'd think very, very hard before I took one of those options. That additional income may cause you some serious problems. However, I do not know enough about your situation to see if the insolvency exception would apply. Also, nobody has mentioned bankruptcy as an option - it is also something to consider. It's better to deal with it as soon as you can rather than let everything slowly kill you - and you know that this is killing you. Just don't bring "BK" up here, because people will start giving you really bad advice about things they know nothing about. So, there are two pieces of advice that I urge you to follow: first, make an appointment with an attorney. I'd speak with a tax attorney before an attorney that only does bankruptcy, but if the attorney does both, all the better. The attorney could give you straightforward legal advice so that you can make the decision that's right for you. Secondly, I understand your motivation for posting this thread on the Something Awful forums, but you will not find the help you need here. I'm serious. You need a lawyer, not a goon. Don't take something that somebody said on an internet forum as a comprehensive solution. One last thing. This isn't advice; it's just something to think about. It's good to pay your bills on time, and I wouldn't ever advocate that you change your habits if you do pay well. But, a mortgage is just a contract. Breaking the contract has consequences, but it isn't a crime and it doesn't make you a bad person. This situation you are in happens all the time to people around you, and there is plenty of help available to in from the legal system. Edit: I wasn't directing the bad advice comment to any of the previous suggestions in this thread. All of them are valid. I just know of the propensity for things to get out of hand and turn into a shitshow of nonsense. KaiserSchnitzel fucked around with this message at 22:37 on Aug 29, 2014 |
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Aug 29, 2014 22:35
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Zapf Dingbat posted:Bills: Good lord how many cars do you have and do you have a clean driving record? Why are you paying $1874.40 a year in car insurance? Finding a way lower that would certainly help free up money for other things.
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Aug 29, 2014 23:09
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My wife and I have 2 total cars, are over 25, pay once annually for the discount, clean driving records, and I dropped uninsured/underinsured coverage. For 500k in liability coverage, and a 1k deductible on comprehensive/collision, I still pay $1300 per year. It really varies state to state is my point. I think I get screwed living in a no-fault state because I probably don't get nearly the benefit of age/clean driving record/etc that I would in a normal state.
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Aug 29, 2014 23:18
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Try posting your resume in the megathread for help. As it stands it is nowhere near ready for real career type applications. (3 pages long with 10+ bullets about you taking senior pictures? Come on man! ) I'd suggest downplaying your work history and focus on your skills and successful projects. I'm confident you can make an appealing product to help land a great job. You have some worthwhile experience v in there, but it is lost in the noise.
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Aug 29, 2014 23:49
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Are you both looking for jobs outside of your state? It sounded kind of like you were the only one looking for work right now, is that the case or did I just misread you? Do you have any skills outside of your resume? Does your wife?
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Aug 30, 2014 00:34
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With you doing transcription work at home you're pretty mobile but what about your wife? Would she have better opportunities with what she's doing in another location? I took a quick look at your resume and I see HR on there. That's pretty good since you should be able to find HR work just about anywhere. Your wife's job on the other hand I don't know anything about. Are you near a large city or way out in the boonies? Would you be able to up your income by picking up an HR gig somewhere which would in turn give you a little breathing room? The typical "get out of debt/fix a financial problem" is to run the debt snowball but there isn't much breathing room in your budget to do that. You could really slash your food budget but it means eating like garbage while you get things sorted out. If you have any land or access to land I would highly recommend gardening. Especially with where you live you could be growing just about year round. Those supplemental veggies would also go a long way in helping to reduce food costs and you might be able to make a deal bartering with others in the community for eggs, meat, etc. Another place where you could temporarily take a hit is to reduce your phone bill. I'm guessing those are his and her's cellphones. You could go old school phone/text only basic phones which should reduce your bill a bit as well. The good news is that although you're right on the edge, you have everything covered. As long as you both keep doing what you're doing you can make head way.
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Aug 30, 2014 00:54
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Yeah, my wife and I both have clean driving records and pay around $135/mo for two small sedans.
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Aug 30, 2014 01:17
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Zapf Dingbat posted:Groceries $450.00 I'm not one to advocate a rice and beans diet, and forgive me if I missed mouths other than you and your wife, but holy poo poo this is high. You live in a rural area so supermarkets are a thing, you're not existing on food from corner stores. My wife and I eat a lot of local grass fed beef, eggs from a local farm, and that hippy and/or expensive poo poo and we're at $400 even including tp and that stuff. We're in a very different income and housing position than you guys are and I know we spend waaaaaay too much. However, we have in the past cut our bill down to sub $200 and still eat meat at almost every meal.
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Aug 30, 2014 01:38
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Bloody Queef posted:I'm not one to advocate a rice and beans diet, and forgive me if I missed mouths other than you and your wife, but holy poo poo this is high. You live in a rural area so supermarkets are a thing, you're not existing on food from corner stores. My wife and I eat a lot of local grass fed beef, eggs from a local farm, and that hippy and/or expensive poo poo and we're at $400 even including tp and that stuff. Zapf has nailed it. The problem isn't spending, it's income. Even if they do a short-sale and rent an apartment at $400/month, they're still an emergency away from bankruptcy. They could probably save a little money in some areas, like car insurance or phones, but it's not going to change their lives.
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Aug 30, 2014 02:38
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swenblack posted:This isn't particularly useful. $450/month is $7.50/person/day. That's really not that high. It's a step above rice and beans, but not by all that much, particularly if it includes toiletries. The problem is income, but short term he can absolutely cut spending. Go to the Goons with spoons cheap eats thread. You can feed yourself on $1 a meal and eat well. They're in a very desperate situation and need immediate fixes. Not spending such a huge chunk of income on food is one of them.
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Aug 30, 2014 03:10
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I walk away from the thread and look at it. Okay, I'll try to catch up.buzzsaw.gif posted:Hello, I will weigh in on this to maybe prevent a decision that has consequences you don't know about. Don't worry, I'm not taking the advice of SA as my sole source of information. People on BFC seem on the level and give practical advice, and can be pretty impartial. That's not something I'm getting from friends and family. I'm not dead set on anything yet, and I plan on seeking actual professional advice. CuddleChunks posted:Good lord how many cars do you have and do you have a clean driving record? Why are you paying $1874.40 a year in car insurance? Finding a way lower that would certainly help free up money for other things. Velochis posted:Try posting your resume in the megathread for help. As it stands it is nowhere near ready for real career type applications. (3 pages long with 10+ bullets about you taking senior pictures? Come on man! ) That resume was a product of Resume to Interviews. It wasn't originally so long. I'll have to think a lot about the resume, though. It'll take some creativity to fix it. moana posted:Are you both looking for jobs outside of your state? It sounded kind of like you were the only one looking for work right now, is that the case or did I just misread you? Do you have any skills outside of your resume? Does your wife? We're both looking for jobs. The resume has pretty much all my concrete skills, besides homebrewing. I wouldn't be opposed to an entry level job at a craft brewery. But that's a little silly. Bloody Queef posted:I'm not one to advocate a rice and beans diet, and forgive me if I missed mouths other than you and your wife, but holy poo poo this is high. You live in a rural area so supermarkets are a thing, you're not existing on food from corner stores. My wife and I eat a lot of local grass fed beef, eggs from a local farm, and that hippy and/or expensive poo poo and we're at $400 even including tp and that stuff. I don't know what to tell you. We buy whole chickens at $1.00/pound or lower, cut them up, freeze them, and use the inedible parts for stock. We buy from cheaper grocery stores and buy according to sales. We do get fruits and vegetables from these stores. We try to eat pretty healthy, and none of our groceries are organic. We hardly eat out anymore... once every two or three weeks if that. I lump my toiletries under groceries, plus any cleaning products like Lysol or something. swenblack posted:This isn't particularly useful. $450/month is $7.50/person/day. That's really not that high. It's a step above rice and beans, but not by all that much, particularly if it includes toiletries. I could be the ultimate coupon mom but it still wouldn't fix the fact I'm going nowhere.
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Aug 30, 2014 03:42
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Looks like I missed one.TouchyMcFeely posted:With you doing transcription work at home you're pretty mobile but what about your wife? Would she have better opportunities with what she's doing in another location? Yes, my wife would definitely have better opportunities elsewhere. There are about 3 companies in her field in this area, and she's got the highest paying one. There's a ton of printing in Atlanta, for instance. Was there HR in my resume? I've never been in that position except for a short stint at the census in 2010, and that was firing people. I live in the suburbs of Mobile, a small city on the gulf coast. We do grow herbs in our garden, but any more substantial veggies are snuffed out by the virtual canopy rain forest that is our back yard. Oak trees in neighbors' yards, hedges... No sunlight for veggies. We've tried for years. I'll shop around for the phones. I'm not sure what my options are, but I'll find something.
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Aug 30, 2014 03:52
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Zapf Dingbat posted:I walk away from the thread and look at it. Okay, I'll try to catch up. Good man. And professional advice - whether it's from a lawyer or an accountant - is not going to cost as much as you think it is - when you are ready of course. Aaaand of course as soon as you post how much you are spending on food, the morons show up, as I predicted. Every thread that involves someone posting anything about their budget is a miniature Hadron collider just waiting to discover the Goon boson particle.
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Aug 30, 2014 07:10
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Do your student loans qualify for Income Based Repayment or do you have any deferrals available? Do you have an idea of how much of a boost your wife's income would get by moving to Atlanta and have you looked at other cities like Montgomery, Tallahassee or New Orleans? That really sucks about your back yard not getting any sun. Any chance there is a community garden in town that trades shares for labor? On the income side, what are the chance you could pickup some extra work? Whether it's doing additional transcribing or maybe some odd jobs during the day?
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Aug 30, 2014 12:33
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Zapf Dingbat posted:
If that's as low as you can get your grocery bill, then so be it. It's your money not mine. It's just worthwhile to examine whether you can get it lower which it looks like you have. I'm not judging you at all, just trying to help by putting your grocery spending in perspective. But I'm a moron so I won't try to help anymore.
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Aug 30, 2014 14:22
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Bloody Queef posted:If that's as low as you can get your grocery bill, then so be it. It's your money not mine. It's just worthwhile to examine whether you can get it lower which it looks like you have. The disconnect is that it is his supermarket bill, not just grocery.
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Aug 30, 2014 16:08
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adorai posted:The disconnect is that it is his supermarket bill, not just grocery. Toilet paper, tissues, cleaning supplies, etc are very cheap. $50 a month at most. I get that it's his whole supermarket bill. It just seems way too high to me. Maybe I live in a magical land of cheap groceries, but like I said, he's the one on the verge of losing his house... and only thinks walking away from his responsibilities and moving is going to fix his life.
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Aug 30, 2014 16:45
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TouchyMcFeely posted:Do your student loans qualify for Income Based Repayment or do you have any deferrals available? I totally forgot about this. I had done it in years past, but had to get off it when I had found a proper job. Thanks for reminding me. TouchyMcFeely posted:Do you have an idea of how much of a boost your wife's income would get by moving to Atlanta and have you looked at other cities like Montgomery, Tallahassee or New Orleans? We think it would be a noticeable boost even considering the higher cost of living. I'm job hunting nationwide, really, but focusing on the southeast and/or places where we have friends or family. New Orleans I wouldn't mind one bit, but there don't seem to be any opportunities for my wife there. Sucks because she has family there. To tell you the truth, though, we're also looking to move out of podunk places like Alabama and north Florida because we have the added burden of being an interracial couple in the deep south (black/white). TouchyMcFeely posted:That really sucks about your back yard not getting any sun. Any chance there is a community garden in town that trades shares for labor? That's funny. TouchyMcFeely posted:On the income side, what are the chance you could pickup some extra work? Whether it's doing additional transcribing or maybe some odd jobs during the day? Yeah, I'll have some better weeks than what I laid out above, but never below the example I gave. It also depends a lot on my mental state, whether I can handle the work. Aside from grocery chat, I looked into the car insurance. I feel like an idiot for overlooking that. I'm changing to another company next week.
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Aug 30, 2014 17:09
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OP, I can't believe I'm doing this, but I'm actually recommending you to look at Oklahoma as a potential place to move. Stillwater is a college town with a large printing company (sorry I don't know the name) however the cost of living is comparable to living in one of the nicer suburbs (due to being a college town and all). Oklahoma City is doing pretty well these days and I imagine you would both be able to find jobs there with little trouble. It's a cheap, friendly place to live but it's not without significant drawbacks. It's worth a look.
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Aug 30, 2014 19:09
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Fantastic. It looks like you might be able to get a little bit of slack on your budget after all. Step one is to get your emergency fund back in place. Because of what you're trying to do you have a couple of options. If you're willing to stay where you are and grind down the house until you can break even on a sale then you're looking at saving a grand and then starting your debt snowball. Another option would be to save as much as you can in cash until you have enough to get the two if you moved to a new town and situated before the short sale or foreclosure has a chance to really make an impact. This is the more dangerous of the two options but it would get you moved faster. Personally I would likely go for option 1 because it carries the least amount of risk. I also meant to ask, what's the balance of the student loans and is there any other debt?
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Aug 30, 2014 19:33
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$400 for two people if they basically never eat out is hardly anything for groceries. Probably could save some but really I don't think this is obnoxious.
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Aug 30, 2014 19:55
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