Fitting title for multiple reasons. Other than today's date, all this started with an email I received entitled "Declare your independence from debt!" It was from equifax, peddling their Debt Wise program. That got the ball rolling for me to really look at what it'd take to get out from all this debt. So, here's our situation summed up:
- House worth a bit over 100k, owe almost 120k
- Timeshare worth less than $510 (according to completed ebay auctions, which included more points). Owe 11.7k
- Nearly 40k in credit card debt
- Over 10k in unpaid medical bills (there is a lawsuit pending, settlement offer wouldn't pay the bills, but we're considering it nonetheless).
- State is Tennessee, so we'd be going by their exemptions
I figured what we'd be left with if we just liquidated everything. We'd owe about $80k. Maybe the accident settlement would take care of the medical, but maybe (probably) the house wouldn't sell for the estimated value.
Stopped using the credit cards last week. Don't have any payments due until the end of this month, though some might go over the limit if I don't make a payment soon (i.e. before they charge interest). House is paid for through September.
Work is sporadic. We have to save enough to keep paying at least the minimums when there's no work. We do pay ahead on the mortgage, since we can pay months ahead and not have to pay for those months.
So, here's my current thinking:
Stop paying the cards. I hate this, but consensus seems to be that I'd be throwing it away. Assuming we do file, it'd be more than 90 days out anyways.
Once we get back home, liquidate everything that wouldn't be exempt. Give up the house, put any money we have towards some land, and park our RV on it. Keep value under $25k to be on the safe side (not that we'd have more than that anyways), as the law reads that an individual with a dependent child can have a homestead exemption up to $25k (though I read a court ruling/opinion/whatever that says a married couple could double that). Paid $4k for the RV (it's actually a converted bus), doubt they'd value it much more than that. I've been told that a small plot of land with utilities (where a mobile home used to be set) would cost between $5k and $8k. We might be able to swing this.
Decide whether to keep or sell our van. Value is anywhere from 6-9k, though I doubt we'd even get 5k. If we need more money to buy some land, then we'd sell the van. If not, we could get it appraised at actual value, and use the wildcard exemption.
Assuming we get unemployment, opt for the debit card, and don't touch it until any cash reserves are depleted first. If I read it right, all unemployment money would be exempt, even if you let it accumulate, as long as it doesn't get "mixed" with any other money.
Things I've already done:
Opened new checking account. Actually opened due to the interest rate, now I might use it since it's just in my name (I "think" that my wife would be more of a target for a judgment than I would be).
Signed up with Google Voice. Signed up not that long ago, after we decided to sell our house (and thus, would need a new contact number; this way we could have it ring to our home number, or cell, or new home number, etc.). I think I have everyone using this number now.
Called about our oldest debt, a student loan. Got a settlement offer, paid $1.5k toward it. After our tax refund is applied to it, that leaves less than $300. I assume I should go ahead and finish paying it (have to by the end of September, if I want to pay the lower amount). I'm worried about the preferential payment thing, but again we'd be past 90 days, and the last payment would be well under the $600 if it did fall within the 90 day period.
Gone through the first steps (denial, freaking out, etc.). Just entered the "well, what would put us in the best position for our family in the next 1/5/10 years" phase. So, leaning heavily toward filing Chapter 7 at the end of the year. Would be very stressful, but I think it'd leave us in a much better situation even in a single year's time. Hate what family would think (I'm sure some would find out), but gotta do what's best for the kids. Looking at it that way, I don't see another option at this point, though I'm definitely open to other options.
- House worth a bit over 100k, owe almost 120k
- Timeshare worth less than $510 (according to completed ebay auctions, which included more points). Owe 11.7k
- Nearly 40k in credit card debt
- Over 10k in unpaid medical bills (there is a lawsuit pending, settlement offer wouldn't pay the bills, but we're considering it nonetheless).
- State is Tennessee, so we'd be going by their exemptions
I figured what we'd be left with if we just liquidated everything. We'd owe about $80k. Maybe the accident settlement would take care of the medical, but maybe (probably) the house wouldn't sell for the estimated value.
Stopped using the credit cards last week. Don't have any payments due until the end of this month, though some might go over the limit if I don't make a payment soon (i.e. before they charge interest). House is paid for through September.
Work is sporadic. We have to save enough to keep paying at least the minimums when there's no work. We do pay ahead on the mortgage, since we can pay months ahead and not have to pay for those months.
So, here's my current thinking:
Stop paying the cards. I hate this, but consensus seems to be that I'd be throwing it away. Assuming we do file, it'd be more than 90 days out anyways.
Once we get back home, liquidate everything that wouldn't be exempt. Give up the house, put any money we have towards some land, and park our RV on it. Keep value under $25k to be on the safe side (not that we'd have more than that anyways), as the law reads that an individual with a dependent child can have a homestead exemption up to $25k (though I read a court ruling/opinion/whatever that says a married couple could double that). Paid $4k for the RV (it's actually a converted bus), doubt they'd value it much more than that. I've been told that a small plot of land with utilities (where a mobile home used to be set) would cost between $5k and $8k. We might be able to swing this.
Decide whether to keep or sell our van. Value is anywhere from 6-9k, though I doubt we'd even get 5k. If we need more money to buy some land, then we'd sell the van. If not, we could get it appraised at actual value, and use the wildcard exemption.
Assuming we get unemployment, opt for the debit card, and don't touch it until any cash reserves are depleted first. If I read it right, all unemployment money would be exempt, even if you let it accumulate, as long as it doesn't get "mixed" with any other money.
Things I've already done:
Opened new checking account. Actually opened due to the interest rate, now I might use it since it's just in my name (I "think" that my wife would be more of a target for a judgment than I would be).
Signed up with Google Voice. Signed up not that long ago, after we decided to sell our house (and thus, would need a new contact number; this way we could have it ring to our home number, or cell, or new home number, etc.). I think I have everyone using this number now.
Called about our oldest debt, a student loan. Got a settlement offer, paid $1.5k toward it. After our tax refund is applied to it, that leaves less than $300. I assume I should go ahead and finish paying it (have to by the end of September, if I want to pay the lower amount). I'm worried about the preferential payment thing, but again we'd be past 90 days, and the last payment would be well under the $600 if it did fall within the 90 day period.
Gone through the first steps (denial, freaking out, etc.). Just entered the "well, what would put us in the best position for our family in the next 1/5/10 years" phase. So, leaning heavily toward filing Chapter 7 at the end of the year. Would be very stressful, but I think it'd leave us in a much better situation even in a single year's time. Hate what family would think (I'm sure some would find out), but gotta do what's best for the kids. Looking at it that way, I don't see another option at this point, though I'm definitely open to other options.
Comment