I sold my home two years ago when the rates dropped and bought a better home in a more desirable area. since that time, I have been plagued with financial woes. The mortgage payment was initially about 250.00 higher than the old one. Then, the gas/electric bill, phone bill, cable, homeowners insu, and auto insu also went up. 2003 came and hubbys employer (family owned) decided that they could no longer pay 100% health insurance. We couldn't afford the policy so we opted for the 80/20 plan instead. within 3 months we were buried in 20,000.00 in unpaid medical bills, despite the claim of 1500.00 max out of pocket. Everything was magically exempt. I dipped into my savings to pay the bills before my credit was destroyed. One bill came in months later that I didn't pay. In the spring of 04 I cashed out the rest of my savings to pay off my car loan so that I could take the 400.00/mo HMO when open enrollment came around. I also dropped the full coverage insuranceon the car That helped, but not enough, My credit cards were reaching their limits and my budget still wasn't working. Then, a school levy passed, increasing my tax bill by 500.00 per year, and thus my escrow. In sept. my mortgage payment bounced. I went online to pay it and failed to follow the instructions properly. I didn't see where it said xxx amount will be deducted enter any additional amount you want to pay. I entered xxx amount in the box and hit send when the confirmation came up I realized my mistake, I paid double. I called but nothing could be done. I had to wait for it to bounce. by the time I got that all straitened out it was 30 days past due. guess what. I got my homeowners renewal this week and the rate DOUBLED. reason... high balance to limit ratios and recent delinquencies. I am so screwed. I don't know what to do. I cannot afford this house any longer. I am out of savings,I have been selling belongings in yard sales, I have had one car for sale for months. the few interested couldn't get loans. I plan on trying to sell the house after christmas. If it doesn't sell I will be forced to foreclose, as I have reached the end of my rope. we have 4 cars titled to us though one belongs to our son. all are fairly old, yet over the exemption for bk7 I can lose one but not all. DH has a 401k but we can only get money out for certain things. we took some out for college tuition for our son, and I could get 1200 for that medical bill, I could pay off 1 card with that. Ohter than that I need to allow my house payments to fall behind in order to get more. hould I do this? I am killing my credit and I won't be able to obtain housing if my house sells.... I need advice fast! BK13?? walk away??? help
I feel for you. If you are old enough to have a son in college you shouldn't even think about dipping into your 401K. In my opinion, you should list your house immediately - a foreclosure is devestating not just emotionally and credit-wise, but also because you could still be on the hook for any deficiency remaining after the foreclosure sale (been there, done that to the tune of 25K). If I were you I'd spend a couple hours on the phone tomorrow finding agents who've sold homes in your neighborhood to give you an idea of what you could get at this time of year. Also, make appointments with several differnt BK attorneys to meet and discuss your situation. They should offer initial consultations for free. Lastly, if you haven't already, make a list of ALL of your creditors, your balances owed, whether you are currently delinquent, as well as your assets - property, cars, retirement accounts, etc. This will help an attorney give you meaningful advice. Don't wait to act on this - as you are seeing, it can and will spiral rapidly out of control, and your ability to act will deteriorate rapidly. I know from personal experience how scary and hopeless financial distress seems, but please remember that it can and will get better. You'll have some hard times, and hard decisions to make, but believe that this is temporary, you are not a bad person for being in this position, you can and will get through it, and you will eventually be ok again. You really will. Best of luck to you Poochie
This is just an example of what is happening in our country. If we get into a financial rut, we get kicked around a little more until it gets imposssible to get out. Also look at our Health insurance situation. That is insane. I am so sorry this is happening to you. If you have to start over, things will get better. Most of the people on this board have had similar circumstances. Things will get better, but its a shame it happened in the first place. If i were you, I'd get out of the house ASAP too, sorry to say. Its just a building and it sounds as if it is turning into a nightmare.
Unless foreclosure is IMMINENT absolutely DO NOT touch the 401k! I made the mistake about 8 years ago of taking some 401k money for a "hardship" (a little behind on the car payment and some cc bills)...stupid move. First, my 401k bank was slow with processing the payout, next, they took out 25% for penalties and taxes THEN the following year, IRS hit me up for more taxes and a penalty but I didn't get the notices as I had already moved. Those penalties later turned into an IRS lien against nothing but my name... Unless the prospects for your son's future employment are very good and you could have him consider student loans to defray your college expenses, hold off on the 401k unless absolutely necessary. I agree, see about selling the house FAST and either downsizing or going into a rental house/apt for a couple of years. You could also see about Chap 13 if nobody is going to work with you.
I do not understand why people worry about paying medical bills. If I EVER get in that situation, I would file major medical bankrutpcy. It allows you to file on just medical bills. My brother and his wife had tow premature babies in the 80's and had hospital bill in the $200,000 RANGE. THEY WOULD HAVE NEVER BEEN ABLE TO PAY THOSE BILLS! So they filed major medical bankruptcy. I understand hospitals and Drs. need to be paid, but be realistic. Just my opinion.
I haven't either. I didn't think you could choose what to BK on. Maybe it's something from the 80s that no longer exists.
I think you have to specifically ask for it and have a certain amount over your income in medical bills. Hedwig you are right, it was very common in the 80's. I knew people dealing with cancer who had filed due to extraordinary medical bills. But it is not widely advertised.
There is no such thing as major medical bankruptcy. Likely what people mean by that is, medical bills forced them to file. You can't pick and choose the creditors you include in a bk filing. You must include all creditors.
Not "exactly" true, I filed for BK in 01, and I simply paid down the creditors whom I wished to keep to a zero balance, and "hoped" that when I filed, they wouldnt close me out (they didnt have to be on the schedule if it's a zero balance) and since my BK was due to an ID theft issue, I told the creditors whom I wished to keep, simply that, not one closed me down, I came out of BK with over a 550 score. Now I am close to 800 again.
