Frustrated and angry

[Slingerland]

I can’t begin to say how angry and frustrated I am this morning.

Two years ago, I almost filed for a C-13. My wife’s medical bills (cancer), thousands of dollars of repairs to a rental property (that normally was profitable) and an unexpected tax bill put me on the edge. I came to this site, got some great advice and found an attorney I really liked. But I was able to financially scrape through by making a payment arrangement with the IRS.

Last year, similar situation. In this case I had to normal repairs and bills, but still was hurting financially. And my wife started withdrawing from me emotionally. She started wrapping herself around her family, and pushing me away. She traded off her paid-for car for a Toyota Mommy-van (and its $600 a month payment). She started taking her vacations with them.

This year, one of the rentals caught on fire (storm damage). Even with good insurance, some repairs weren’t covered. Finances became shaky again and unsecured payments ran late. My wife and I discussed my filing a solo C-13 with my attorney friend again, but my wife developed a BIG emotional attitude about it. I was able to work with CCCS and come up with a payment plan that worked to get the credit cards back under control. My daughter (from first marriage) and her husband became parents, but my wife wants nothing to do with them or the grandbaby.

Yesterday, my wife received a notice from the IRS. Apparently she had changed her withholdings (without coordinating with me), and the IRS determined she wasn’t eligible. They forced her back to “single with 0”. For her, this means $470 a month in more income taxes being withheld. Of course she is crying that she can’t afford it. We’re calling the IRS later today.

For me, I can’t begin to describe how angry and frustrated I am. I have bent over backwards to avoid a C-13… while knowing it was the best thing to do… all to assuage her ego. But she has pulled out of the marriage emotionally and left me hanging. I feel like a chump… like a sucker… betrayed.

So I have been considering a divorce. I can move into one of the high-end rentals and give her the primary residence. There’s no equity on the other rentals, and were purchased solely with my money so I’ll keep them (I’ve already discussed this with a divorce attorney.)

Ironically… once divorced I can file the C-13 and be in MUCH better financial shape. Using BestCase to model the situation… looking at my Schedule I/J and the 22… I pay a certain amount for a year, and then when child support ends, the child support amount gets added to the C-13 payment. All unsecured creditors get 100% and the C-13 only runs for 56 months. And the payment is one I can handle.

Even better… with the income of my wife and me, we’ve been forced to carry forward the rental losses. Together we exceed the passive income limits. But once divorced, all those losses are available to take… we’re talking tax refunds close to $10k a year for the next few years.

So this morning I’m angry and tired. I’ve been on the road all weekend with little sleep and bad food. But I just needed to whine and get it out of my system I guess. I’ll have some questions going forward, and I want to tell everybody here how much I appreciate them!

Thanks!

[keepsmiling]

Oy, sorry to hear.
Have you guys done some counseling? Seems like the wife is in some deep denial.

[Slingerland]

She refuses... says there is nothing wrong with her.

[TheBajan]

I am so saddened to hear this news. Financial stress is devastating to a marriage. Hopefully as you proceed with this she will wake up and the two of you can try to work it out. Before we filed my husband was the one in denial and it nearly tore us apart. I actually reached a point of considering permanent separation. I didn't ever get to where I thought we'd divorce but we were definitely on completely different planes for a while. In the end, I took steps to begin preparing to be on my own.

I stopped trying to work with him or convince him that we needed to file and made changes in myself. Through that, even though he didn't change, my perspective toward him did and somehow we made it through. Eventually, he finally realized we were out of options and we are now 10 months into our ch 13 and doing fine. I wish you the best. I'm frustrated on your behalf. Please vent as often as you need to and let us know how you're doing.

Best wishes,
The Bajan

[woeisme]

I feel for you Slingerland. I've taken on all the financial responsibility in my marriage and my husband still spends away and its been everything I can do not to blow up the marriage some days, but mainly I don't for our son's sake. He's actually legally my stepson, but his Mom died when he was 4 years old and I've been raising him with my husband since he was 8 and he's now a Jr in high school. If I divorced his Dad he'd no longer be my dependent and lose eligibility for a free private college education that comes as a fringe benefit from the university I work at, so a divorce at this point would cost him ~$100,000 of free tuition for a 4-year bachelors degree. We've almost made it through our CH 13 and I've been the one taking on all the overtime to cover payments, scrimping while my husband refuses to save a dime for those financial emergencies that always come up, etc. He did the same thing as your wife, adjusted his tax withholdings so that he'd get more take-home pay to blow so I had to adjust my own withholdings to cover the difference so we wouldn't owe big at tax time, then when we do get a small refund, somehow thinks that "half" should belong to him to spend! Anyhow, I totally understand your frustrations, I have them too and once my son is through school all bets are off, but for now I just have to try to hold things together. Best of luck to you!

[bcohen]

Hi. Your posting has several distinct issues, so I will break them down one by one (not necessarily in order of importance).

1) In any business--even a highly profitable business--there will still be occasional losses due to fraud, acts of God, actions by competitors, etc. The rental housing business is no different. The idea that you can just buy a house, let the tenant pay the mortgage and insurance, and just pocket gobs of "free" money is silly. A reputable landlord will reinvest most of the rental proceeds into maintaining and upgrading the rental properties. Thus, the fact that you lost money on one of your rentals due to storm damage is something that you should have been prepared for and able to cover.

2) When you are married, the most important thing is to discuss everything, always consider your partner's opinion, and never make important decisions--financial or otherwise--without your spouse's agreement. When your wife decided to purchase a car without discussing it with you, and getting your permission, she betrayed your trust in a major way.

3) If your wife is more interested in spending time with her family, more interested in discussing her problems with them than with you, and disrespecting your daughter and grandbaby, then it sounds like she has given up on the marriage. Ideally, you would spend time with both families--hers and yours--together. If you can get your wife to admit that there is a problem, and attend counseling, then maybe you can work this out. Maybe not. But if she is going to pretend like there's no problem, and it's all your fault, then perhaps it's time to move on.

4) It is not in your interest to try and reduce your wife's tax withholdings. If you are successful, then it sounds like you are (both) going to owe a lot in taxes at the end of the year--taxes which might end up being YOUR responsibility to pay!

5) Bankruptcy is (or should be) purely a business decision. If it makes financial sense to file, then you should file. If it makes financial sense to pay your debts, settle, or let them charge off, then you should not file. But to not file when you should file, just to please someone's ego--especially your wife, who probably would NOT do the same thing for you--is just crazy.

6) If you do end up divorcing, and choose to move into one of your rental houses, be sure to file the appropriate papers with the county and declare the house as your homestead, if that is required in your state.