Best advice for my situation

I have recently resigned from a position and now I am in a financial bind so to speak. When I took the job, my employer paid for three years of training up front (approximately $8,000) and now they want me to repay them. I was not given a specific timeline or amount to start paying back right away. The employer took my last two checks at applying about 1,000 off the top. Now, what would be the best course of action to pay this off? I do not wish to use my credit card or savings because it would leave me in even more debt. I have other financial responsibilities to think about. I am also in the process of trying to secure another position at this time.

In the past, my family and I have helped my husband. How do I get him to understand that he really needs to start stepping up and helping me through this very stressful portion of my life?

I am not down emotionally with the things that have gone on. As a matter of fact, I am taking proactive steps to secure myself as a potential employee with a great talent in my field. I am also trying to secure my financial future the best way I know how.

I hope I will find some info here – https://www.usa.gov/retirement, stil any help and suggestions would truly be appreciated.

Possible divorce and on disability

We got a question from one of our readers:

Any advice to the fact that I have been recently placed on disability and now possibly facing divorce and how to get the credit card companies to work with me on my fixed income and possible loss of husband’s income? I don’t want to file bankruptsy, but it is looking as if I might. I owe approximately 10,000. I live in Miami, Florida.

One thing people don’t realize is that even in a divorce or separation, debt collectors can careless (to some extent). All they really care about is getting their money and not hearing about personal problems. However, their is hope.

The first thing is to maintain at least the minimum balance until you can figure out how you’re going to pay things off. While avoiding bankruptcy is good, it’s not all that entirely life changing either. It actually gives you a fresh start, and by the looks of things you could file a Chapter 7 and be on your way in six months with a fresh start to life.

If however you have good credit that you don’t want to lose, I would pay the minimum, find out what the card companies can do to help you by calling them directly, and go from there. Also, make sure you find out how their methods to help you will affect your credit report if indeed it would. Then, like any other payment, set aside a certain amount each month (little more than the minimum) and have an end in sight. Ask them to help you calculate based on your interest rate how long would it take me to pay this cc off based on $xx.xx a month.

One thing to keep in mind is that even though you are divorcing, credit can still be ruined until your name is completely off your spouse’s debt. Thus, even if you hate him/her, you’re still responsible for their debt (as them as well) until all joint accounts are made separately. I would start there.

If your sole income is disability, creditors cannot touch that. It’s protected income. Work out a budget where you cover your four walls first (housing, food, utilities), then divide whatever’s left and send it to the credit card companies. It may be $5 a month. Send them written notification that you are divorcing and that your income will be disability only. Then, tell them how much you can send each month. (send the letter certified so you can prove that they received it) Yes, they’ll complain and threaten and not want to play nice, but they can’t do much else.

Bankruptcy isn’t as horrible as it’s made out to be. My hubby and I had to file back in 1999 (chapter 7). Since then, we’ve been able to buy four cars and a house. If you think that may be your only option, find a bankruptcy attorney who does the first visit free and go talk to them. Also consider taking out a payday loan – it may help you with urgent cash needs. In Florida we would recommend this company (payday-loans-florida.biz) – they have been around for 10 years and have a lot of great reviews.

The disability is a guaranteed monthly payment that they can garnish up to 35 %( like unemployment) of as I understand it which means they will be relentless in pursuit of this money. You are protected up to a certain amount of your income and assets no matter where it comes from or what you have then anything beyond that is subject to seizure or garnishment. That’s just how it was explained to me when we filed BK but I dont know the exact science of it all… I was told it was 75% or something that was protected as long as you fall under the ‘median income’ guidelines etc. I dont remember it all. BUT I have been told by others that if you have a guaranteed gov. check coming in monthly like disability or unemployment that they are aggressive because you are going to get that check and they can seize a percentage of it no matter what your situation. Again I dont know and maybe someone here does but I would be careful.

It’s the same for all states:

Social security benefits can ONLY be garnished for student loans, back taxes or child support issues. Credit cards are out of luck.

This is where people get confused. Disability is protected income but if you put it in a bank account for example and a creditor receives a judgment against you they can freeze that account and they often do this without warning. In some states those with these types of income are encouraged to separate accounts for wages that are protected and also garnishment laws are different state by state in terms of the amounts and what can be garnished etc. I think one of these articles mentions that in Florida the head of households wages-including earned wages are protected entirely. In the state of New York I think it said they can only garnish 10% of your earnings for example. Here where I live they can garnish up to 35% unless that amounts to be more then the federal law allows. Here are 3 links to three different articles that explain alot of things about garnishment in detail. Some of you might find them helpful.

http://law.freeadvice.com/estate_planning/asset_protection/protecting-wages-from-creditors.htm

Good luck!

Short Sale Question

Sale questionI am considering doing a short sale, and trying to weigh all of the ramifications and would like some advice or insight. We can afford our mortgage and pay our bills. Unfortunatley, our condo is a one bedroom unit, and I’m expecting in July. With the mortgage, taxes, insurance, homeowners assoc fee, and neighborhood fee, it’s close to $1,700 a month. If we are lucky we could rent it out for $900. Even if we lower the mortgage by a couple hundred dollars, it’s still not really feasible to rent. I really want out because the second hand smoke from our neighbor is out of control, and I don’t want my baby in that environment, plus it’s too small for three people.

We can’t do a traditional sale, we owe $176,00 and they are currently selling for about $110,000. If we do a short sale, how is that going to affect our credit rating. I was told only about 110 points. Is that correct? It’s only in my name, I bought before we got married, will my husband be affected? If anyone has gone through this I would love to hear their insights.

We are trying to do a short sale. The bank is taking forever to process our paperwork. We are current on our mortgage and all bills and was wondering if we stop paying our mortgage if that will help the short sale go faster. The reason we are using for the short sale is that I lost my job a couple of years ago and got a new one where I have to commute to another state. It now is no longer working to commute such a long distance. We owe more than it’s worth, and to rent comes no where near covering our expenses.

My friend told me: “It will affect your credit but I am not sure where you got the 110 points information. If your husband is not in the mortgage then it will not show up in his. Make sure if you do the short sale that it is a non-recourse and the bank does not come back at you for the difference. If the mortgage is strictly in your name and you do the short sale, then only your credit gets dinged and pretty bad. The note below is correct, make sure it is without recourse. BUT, when you go to make another home purchase and IF you put your name on it, expect higher than normal interest rates. The next home would almost have to be in just your husband’s name.” Is that true? Thanks.

Question about assuming new debt

Assuming New DebtWe are a self employed couple (22 years) in Maryland with nearly 200K in combined personal and business debt which we incurred when we moved our business to a renovated space on our property. The economy over the last 24 months has severely impacted our income and made servicing the total debt impossible. Despite many cost cutting measures we may be forced to file Chapter 7 for personal and possibly business debt.

We have met with one attorney so far and gotten a second opinion from a CPA who reviewed recent tax returns. We plan to meet a second attorney before making any final decisions. We have been advised by the first attorney that “by law” he can not advise us to assume any new debt prior to filing. We are in need of a vehicle and he knows that but has emphasized multiple times he can not advise us to take on new debt. Frankly his tone and his contract language beg us to read between the lines.

I have had a friend (also self employed) nearly file and they advise us to get a car loan before we file. Our credit is good, we are current on all loans and credit cards, but feel certain we are at risk of defaulting soon. If our personal debt alone is discharged our cash flow will allow us to continue our mortgage and other necessities as well as make a modest car payment.

My question is this, since we have applied for a mortgage modification as well, and our case is now in the hands of an agent, will applying for new credit before they determine our case be a big mistake? Does anyone else have thoughts on options? We do not own any assets of value that we could sell or we would have done it already.

We may or may not opt to file business bankruptcy as well. One of the businesses is owned 51/49 (woman owned) the other business is owned jointly. Both are S corps. The house and most of the credit cards are joint debt.

Thanks for your input.

update:
learn more about debt collection laws here – https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text and herehttp://www.federalreserve.gov/boarddocs/supmanual/cch/fairdebt.pdf (PDF document)

Spouse being persued for part of debt?

Hi, I am a newbie. I’m going thru a bankruptsy in OR, and the legal aid group asked for my x spouse’s details, age, name, etc..they sound like they are going to go after him. I’m going to do the full on request for hardship around college loans if I possibly can and the only thing I can think of is they could go after him for part of the interest that accrued on them during our marriage, has anyone experience with any of this?

Or could they go back over the divorce paperwork and go after him if they think it wasn’t fair. He apparently just wanted a green card, and left me in very very poor straights during the divorce, I negotiated with his lawyer, I was so poor and got only 2 grand and made him take his credit card debt from very man restaurants(excessive purchases of food to impress others as well).

All I know is that in my own divorce my ex accepted full, sole responsibility for a vehicle we’d bought during the marriage. He stopped paying for it and the people that held the debt garnished my wages. The only way I can stop paying for his van is to declare bankruptcy but right now this is my only real debt. But the judge set a monthly payment, which beats the weekly garnishments. The van was bought during the marriage and both our names were on the original purchase papers. No clue if this will help but this is my experience. Oh, and I’m in Michigan.

Any advise on consolidating?

I’v been looking into doing “debt consolidating” I have about 3000.00 in collections and another 3000.00 that i pay on time in CC and such that i want to clean up. Has anyone had any experiance with debt consolidating, or have any advise? Anything is appreshiated. ะจ know, that unless you are willing to cut all credit cards and swear to never use credit again and can keep that oath, DO NOT DO IT!!!!!!!! Let the voice of other’s experience talk to you. You will find yourself having consolidated your current debt into one nice, neat, little payment and start thinking, hey – I can buy that on credit. Next thing you know, you are back in the same boat, only there is more water inside the boat this time!

The only way to do it is to get rid of the credit cards. I had over 16,000 in credit card debt and went through a credit counceling place and with that those cards are closed and you can’t have a card through them again.

You just don’t have a lot of debt (although I’m sure it feels like you’re completely under water). You can totally do this on your own. To that end, you’re better off NOT consolidating. It will make your credit even worse because the first thing they advise you to do is stop making your payments. You have a couple of good options though.

1) Keep on keepin’ on with your current payments.
2) Call the collections co and ask to settle for a lower amount. This will only work if you have cash stored up to give them.
3) Call your credit card co and tell them that you’re in hardship. Ask for a lower rate.
4) Take out a personal loan from a credit union or an online place to consolidate gracefully.

I’m assuming that you’ve destroyed the credit card so you aren’t still using it. Right? :)

The good news is that you’re in charge at this point. The collections stuff has already hit your credit report so it’s not like you’re trying to prevent them from reporting. Use this power to your advantage. You’d be surprised how much you can do on your own. Google things like “work with credit card companies” or “how to settle a collection” and you’ll get some good advice.

I do not use any of my credit cards anymore, and my two bigger balance ones iv called and had the interest rates lowered. It just seems like I don’t get anywhere even paying much more than the minimum. I’m just trying to get my stuff straightened out the right way.

There is nothing to fear but fear itself

There is something to be said about, there is nothing to fear but fear itself…When we allow fear to guide us, we tend to make some poor choices. At this point you can’t afford this. I agree with qkjones, “get any job”, for more than one reason. Idle hands make idle minds! Alot of people do not take jobs below their pay scale for reasons that I don’t have time to get into. But this sets them up for more depression, lazyness, and increased spending. There are many organizations now that can assist you including churches, till you can get back on track. Dave Ramsey’s site is a good tool also.

The best thing is what you are already doing…seeking advise. Roman’s 12:2 Renew your mind and God will take you where you need to be! Praying for you and many more as we tread this economy.

God Bless you and yours!