We met with a lawyer today here in Orlando. My husband unexpectedly lost his $70K a year job and we are trying to decide what to do. As an FYI, we are not late on any payment at this point but that day is coming close.
1. Our monthly income after his job loss is $5574 gross (my salary + his mil pension).
2. We have two $225 car payments and we have about $68K in unsecured debt, not including a $66K 2nd mortgage.
3. The house was worth $390K a few years ago. It is now worth $150K and the 1st mortgage is underwater by $25K at this point so we could strip the 2nd in a Chapter 13 if we wanted to keep the house. However, the real estate market is horrible here and values are now not projected to return to decent levels for another 15 years or so. We were about 8 yrs away from his retirement but everthing has changed now. Operating cost for the house is an additional $500 to 600 per month if you factor in electric, water, garbage, sewer, HOA fees, termite bond and floor insurance (no emergencies in that cost). Homeowners insurance and property taxes are included in the $1257 monthly mortgage payment. As an FYI, even though the house value dropped considerably, the taxes actually went up on the property.
4. Very, very little short-term savings because we were trying to pay off unsecured debt. Any savings we have is in 401K (still trying to recoup the damage there) and our pensions -- and even those are considerably less than they were a few years ago due to pension changes by our companies or his job loss.
5. The job market is horrible, nearly 12% unemployment and he is 58 and getting rejections on job occupations that he has worked in before.
Our lawyer asked us what we want to file although he did explain both options. I guess I want to file whatever is going to give us the best option to try to not end up on the street when neither of us will be able to work. It sounded like we would not be eligible for a Chapter 7 although he said he might be able to argue the loss of income due to job loss but we are obviously above the median income. I ran a budget where we would keep the house in a Chap. 13 but even with trimming, we come out with less than $100 in monthly disposable income once my husband's 6-month run of unemployment insurance runs out. Because $1600 of our income is from a military pension with no survivorship benefit (I know!!), if anything happens to him during that 3 to 5 year Chapter 13 repayment plan, that income will disappear. The lawyer said I could convert to a Chapter 7 then but where could I live with my credit rating at that point? Right now our credit rating borders on good/excellent.
My mother thinks I am making a big deal out of all of this but then she owns her own house and lets my brother and his girlfriend live there for free. Her response to my expressing my concerns is that at least my husband is alive.
I am losing sleep over this and my husband is going through somewhat of a grieving process due to the unexpected job loss. I have to think for two these days so any constructive guidance would be most appreciated.
Thank you!
1. Our monthly income after his job loss is $5574 gross (my salary + his mil pension).
2. We have two $225 car payments and we have about $68K in unsecured debt, not including a $66K 2nd mortgage.
3. The house was worth $390K a few years ago. It is now worth $150K and the 1st mortgage is underwater by $25K at this point so we could strip the 2nd in a Chapter 13 if we wanted to keep the house. However, the real estate market is horrible here and values are now not projected to return to decent levels for another 15 years or so. We were about 8 yrs away from his retirement but everthing has changed now. Operating cost for the house is an additional $500 to 600 per month if you factor in electric, water, garbage, sewer, HOA fees, termite bond and floor insurance (no emergencies in that cost). Homeowners insurance and property taxes are included in the $1257 monthly mortgage payment. As an FYI, even though the house value dropped considerably, the taxes actually went up on the property.
4. Very, very little short-term savings because we were trying to pay off unsecured debt. Any savings we have is in 401K (still trying to recoup the damage there) and our pensions -- and even those are considerably less than they were a few years ago due to pension changes by our companies or his job loss.
5. The job market is horrible, nearly 12% unemployment and he is 58 and getting rejections on job occupations that he has worked in before.
Our lawyer asked us what we want to file although he did explain both options. I guess I want to file whatever is going to give us the best option to try to not end up on the street when neither of us will be able to work. It sounded like we would not be eligible for a Chapter 7 although he said he might be able to argue the loss of income due to job loss but we are obviously above the median income. I ran a budget where we would keep the house in a Chap. 13 but even with trimming, we come out with less than $100 in monthly disposable income once my husband's 6-month run of unemployment insurance runs out. Because $1600 of our income is from a military pension with no survivorship benefit (I know!!), if anything happens to him during that 3 to 5 year Chapter 13 repayment plan, that income will disappear. The lawyer said I could convert to a Chapter 7 then but where could I live with my credit rating at that point? Right now our credit rating borders on good/excellent.
My mother thinks I am making a big deal out of all of this but then she owns her own house and lets my brother and his girlfriend live there for free. Her response to my expressing my concerns is that at least my husband is alive.
I am losing sleep over this and my husband is going through somewhat of a grieving process due to the unexpected job loss. I have to think for two these days so any constructive guidance would be most appreciated.Thank you!
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