ADVICE PLEASE, Hubby Hid Debts...Update

Willa_2

First Off, thanks so much to the folks that responded to my plea for help yesterday. It really helps to hear other people's responses, particularly from people who have dealt with debt problems. I looked into getting credit counseling here in the US, but apparently, if you do that the credit companies consider it the same as filing bankruptcy. Go figure! I want to pay back our debts...and not at 20% on the dollar!

I'm not quite sure what SOA stands for, but I am assuming STATEMENT OF ACCOUNTS. I wasn't sure if I should post back on my other post, or start a new one, but I know if I post a new one it will show back up on the first page again, plus it is rather a new post. For those that didn't read the other post...I just found out that my husband had lied to me about his new business. He told me he was making $2,500 a month (though I our household only saw a few hundred a month), and instead he lost $14,000 in about 4 months, taking out credit cards. We had a standing agreement not to take out any credit.

We recently relocated, and he has been looking for a new job, but at 55 with terrible credit (he told me it was in the 750s just a couple of months ago), all he's been able to find is a job at $12/hour. He has been working hard, but our household doesn't see much of the money, since he's behind on payments. I can no longer keep up with all of the household expenses, and fear that my (752) credit rating will now slide away.

I am angry, because we discussed the importance of keeping our credit good. THe plan WAS that as soon as he had steady income, we could take out a mortgage (we own our property free and clear, worth around $200K). Now it looks like we will have to pay a much higher rate for 30 years! I've calmed down a lot since yesterday, less inclined to consider divorce. My hope is that we can get through this together, and start a new financial and emotional life. Most of my anger is not even the money. It's the fact that he lied many times, and broke serious agreements we had.

In trying to put together a SOA, I even realize that I have no clue how much he spends. I will have to ballpark that. Nor do I know the interest rates on his cards. I asked him to print me out statements (first said he couldn't do it, because he gets internet statements), I asked him to put down the interest rates on the Equifax report, but he didn't do it. He's out of town for the next week on a job. He also didn't tell the truth about how much money he is making (much less than he said). Our children are all grown, it's just the two of us, dogs, and chickens. Well, here goes:


My income: $2,200
Hubby's income: $1,500

Power: $100
DSL Service: $60 (necessary for my online business)
Cell Phone: shared $100 (necessary for my business-data plan)
Netflix Service $19 (by mail DVDs-we don't have television)
Email Service: $19
Fuel: $300 (we are rural, 45 miles to nearest town)
Home Insurance: $50
Car Insurance: $100
Property Tax: $100
Dog Food Etc.: $100 (we have four Australian Shepherds, figures incl. Vet)
Food Etc. $500 (I'm allergic to wheat, need special foods)
Eating Out: $100
Haircuts: $40
Health Insurance: $220
Clothing: $40
Gifts: $180 (5 kids, 25 people on our gift list)
Entertainment: $30
Misc: $50 (my husbands hunting licenses, magazines, misc)
Church: $100
WorldVision Sponsorship: $35 (child in Rwanda)
Gardening supplies and Bird Food: $25

DEBTS

Chase: $21,900 22.99% (payment $550)
USBank $19,900 12.99 $350)
PayPal: $ 2,100 21.9% $ 90)
Home Improvement Loan: $12,000 6.9% $536)
Truck Loan $10,200 5.9% $286)

Hubby's Debts

Don't know the interest rates, also, since he just defaulted on a couple, the rate is likely to go up)

BofA: $7,843 (payment $250)
Gas Card: $ 889 (payment $ 50)
PayPal: 497 (payment $ 50)
Wamu: 694 (payment $ 50)
Wells: 4,027 (payment $100)

All payments listed are minimum payments required.

Total Debts: $ 68,050

Total Income Monthly: $ 3,700
Outgo: $ 4,531

It would have been so easy to just get a mortgage to pay off everything, and have one low payment, then work on building up an emergency fund. Now, with his poor credit rating, getting a good mortgage is going to be much harder. Especially with the whole mortgage meltdown here in the States.

Living beyond our means for the last few years is what caused this crisis. The fact that we had a nice profit from the sale of a house, and didn't do better with the proceeds makes me feel like an idiot. I guess I should be grateful that our situation is far better than many posts I see here, but my misery is just as valid. I worked 60 hours a week for 15 years straight to get to a good financial situation. THis move was a dream-come-true. I was thrilled to finally do what I'd always dreamed of-having a bookstore (albeit online-which is actually better-less overhead more freedom). Now I have to worry wether I have enough cash to pay for groceries.

Well, like any other compulsive issues, I guess what we all have in common here is spending money we don't have. What's awful about it, is realizing how much money you give to corporations in the form of interest. If we were to invest those funds, we'd all be rich instead of poor.

I think our big failing was not having an emergency fund, and not budgeting monthly for yearly expenses. Just thought of another thing not on the list: the yearly tax return preparation...another $20/month, and I betcha there are a lot more items like that.

Any comments, advice, or encouragement would be appreciated. I am concerned about my husband doing this sort of thing again, as he did it once before this. Clearly, even without his debts, we weren't quite making it. We were selling things to make up the shortfall. Last month I sold my beloved trumpet to have money to buy the kids gifts.

What I'm starting today, I've done it in the past when things were tight (before I met my husband), is to keep my little pad, and write down every penny I spend.

silvercar

I haven't seen your other threads, but to me you have a major positive. None of your debt is secured on your home, so your home is safe.

Had you moved some debt to a mortgage, then got stuck your home would seriously be at risk. As it is these debts will be managed. Remember that loan companies cannot get blood from a stone, if you haven't got the money at the moment they will have to agree a payment schedule.

RAS

Willa

We will struggle with some of this becasue we have no idea if the US prices are reasonable or there are cheaper options but.. we can only try

Willa wrote: »

In trying to put together a SOA, I even realize that I have no clue how much he spends. I will have to ballpark that.

If he is away working, it is hard to keep tabs on his money. Can you remove all the cards and give him a cash allowance? is he paying accomodation costs for instance? idS he paid in cash or into the bank?


Nor do I know the interest rates on his cards. I asked him to print me out statements (first said he couldn't do it, because he gets internet statements), I asked him to put down the interest rates on the Equifax report, but he didn't do it. He's out of town for the next week on a job. He also didn't tell the truth about how much money he is making (much less than he said). Our children are all grown, it's just the two of us, dogs, and chickens. Well, here goes:


My income: $2,200
Hubby's income: $1,500

Power: $100
DSL Service: $60 (necessary for my online business)
Cell Phone: shared $100 (necessary for my business-data plan)
Netflix Service $19 (by mail DVDs-we don't have television)
Email Service: $19
Fuel: $300 (we are rural, 45 miles to nearest town) - you mean petrol/gas? Could you get a car with a lower MPG? Plan journeys very carefully and reduce your mileage. Keep a rolling list somewhee in the house to which you add the things that are needed, then do one shopping trip, go to the library ans see friends.

look at the hillbilly housewife web-site - frightening but...
Home Insurance: $50
Car Insurance: $100
Property Tax: $100
Dog Food Etc.: $100 (we have four Australian Shepherds, figures incl. Vet)
Food Etc. $500 (I'm allergic to wheat, need special foods) - you may not need special foods at all, if you learn to cook within the limits of your diet. I am allergic to cow's milk. Apart from buying the odd bit of goat's cheese, and avoiding a lot of prepared food/ready meals (plus chocolate and icecream), I buy normally. The extra cost is less than £5 a month, about $8.

Eating Out: $100 - this has to go. Invite friends to dinner and learn to cook real cheap.
Haircuts: $40 - could you cut hubbies? Does the local colege do deals?
Health Insurance: $220
Clothing: $40
Gifts: $180 (5 kids, 25 people on our gift list) You may need to cut this. Children only?
Entertainment: $30 - What is this?
Misc: $50 (my husbands hunting licenses, magazines, misc) - cut the magazines. The hunting licence is OK if it brings in food.
Church: $100 - I appreciate that the US attitude to church funding is different but this has to go.
WorldVision Sponsorship: $35 (child in Rwanda) - ditto this for a while
Gardening supplies and Bird Food: $25 - stop feeding the birds. You need to feed yourself

DEBTS

Are the ones not listed as loans all CCs?

Chase: $21,900 22.99% (payment $550)
USBank $19,900 12.99 $350)
PayPal: $ 2,100 21.9% $ 90)
Home Improvement Loan: $12,000 6.9% $536)
Truck Loan $10,200 5.9% $286)

Hubby's Debts

Don't know the interest rates, also, since he just defaulted on a couple, the rate is likely to go up)

BofA: $7,843 (payment $250)
Gas Card: $ 889 (payment $ 50)
PayPal: 497 (payment $ 50)
Wamu: 694 (payment $ 50)
Wells: 4,027 (payment $100)

All payments listed are minimum payments required.

Total Debts: $ 68,050

Total Income Monthly: $ 3,700
Outgo: $ 4,531

It would have been so easy to just get a mortgage to pay off everything, and have one low payment, then work on building up an emergency fund. Now, with his poor credit rating, getting a good mortgage is going to be much harder. Especially with the whole mortgage meltdown here in the States.

That might not be a good idea anyway, as consolidation tend to lead to more debt.

THis move was a dream-come-true. I was thrilled to finally do what I'd always dreamed of-having a bookstore (albeit online-which is actually better-less overhead more freedom). Now I have to worry wether I have enough cash to pay for groceries.

Can you get a day or two a week traditional work as well and still run the on-line business?

Well, like any other compulsive issues, I guess what we all have in common here is spending money we don't have.

I think our big failing was not having an emergency fund, and not budgeting monthly for yearly expenses. Just thought of another thing not on the list: the yearly tax return preparation...another $20/month, and I betcha there are a lot more items like that.

yes.

What I'm starting today, I've done it in the past when things were tight (before I met my husband), is to keep my little pad, and write down every penny I spend.

Sorry but hubby has to do exactly the same.

Are you joined up to your local group of www.freecycle.org - like e-bay but the goods are free. i realise that you are in the sticks but for more expensive items it might be worth the travel costs.

Can you grow any of your own food, forage for fruit, anything?

Burlesque_Babe

Hi there - first thing I would say is - spending diary - excellent idea, your little pad will become a good friend!

The things I would instantly list as being able to be cut out altogether or massively reduced would be:

Haircuts: $40
Entertainment: $30
Eating Out: $100
Misc: $50 (my husbands hunting licenses, magazines, misc)
Gardening supplies and Bird Food: $25 (this is every month?)
Church: $100 - could you volunteer your services in some way instead?
WorldVision Sponsorship: $35 (child in Rwanda) - re-start this when you have your situation more under control
Gifts: $180 (5 kids, 25 people on our gift list) Every month - blimey - this could be cut right down with savvy shopping - use vouchers, money off codes wherever you can as well as the US equivalent of Kelkoo to get the lowest prices.


On the food situation - Head over to the Old Style Board on MSE for tips on meal planning, freezing, using up every last scrap. There will be some people with similar allergies who can help.

It sounds like you are making great in-roads to taking control of the situation - well done.

bonnie_2

Time to scrutinize. i've lived without luxurys for 5 years whilst trying to clear £30,000. 4 payments to go till debt free.
Eating out, hair cuts, clothing, gifts, entertainment, world vision and gardening. non essentials saving $450 a month.I'm sure your family would rather you had a roof over your head then gifts. i only buy immediate as in mum and dad and kids at £20 each now. and misc $50 See saved $500 dollars for you. You simply cannot afford to have things you can't pay for.
You are overspending by $800 dollars a month. Work that out over a year and its quiet a shock. I found it horrible to start with but find it quiet liberating now.

whitewing

Can't give you too much practical help. All I will say is that once you get over the fact that this situation has been forced on you (which has taken me many, many months and I'm not there yet!) you won't miss as much as you think. We have cut down drastically as part of the challenges in my sig and we still don't yet feel that we're actually going without.

Willa_2

Thanks to all,

The 50 chicks I raised last year are now either in the freezer, or in the chicken coop. I have 11 hens, which are giving me 10 dozen eggs a week. I am making a few dollars a week selling my eggs, and giving some to the local food bank. Since we are new to the property, which had NOTHING on it, but a house and shop, the garden didn't produce much last year. I think we can easily cut out $100/month on the food. Unfortunately, money-wise, but fortunately health-wise, we are foodies. It is hard to pass by the Stilton, the olive oil, fresh crab...but cooking fresh is a lot cheaper. We have made a decision to no longer buy supermarket meat. We have a share in a grassfed steer, which last year ended up costing far less than meat from the market. My chickens were a bit tough, but this spring I'm going to get a different breed. We are going to buy a share in a pig this summer. THe biggest grocery costs are the gluten-free items. Loaf of bread...$5. Crackers...$3, rice flour...$3/lb....and cheese, yogurt and tea. I'm hoping to do some bartering around here for meat and produce with my garden and chickens.

The one issue my husband and I are deadlocking on is the truck. It's his truck, but the loan is in my name. He spent huge amounts of money on that truck, and now it needs a $4,000 repair. It needs new fuel injectors, he's starting it every day with starting fluid. I want him to borrow at least enough money from his parents (my mother is as poor as a church mouse, and I don't have anybody else) to make the repair. We have enough equity in it to buy another economical vehicle. THat would get rid of one payment. I have begun struggling (since I get virtually no money for the household expenses from him) to make the payment, and we can not afford to have my credit rating go down.

I don't see any recourse here, except to get a mortgage, it would take us years to pay this off otherwise, and tens of thousands of dollars in interest charges. It was my dream to have a house paid for...oh well, I'll have to suck it up. The THING IS...we have to live on what we earn after that. No credit cards. Cash only. I want to start investing money in our future, instead of credit companies.

I am not willing to suspend my WorldVision sponsorship. That sponsorship helps an entire family for now and the future. Even now, with this mess, I have SO much compared to that village in Rwanda. If I have to, I'll drink Lipton tea instead of Twinings. Much the same about church contributions. We have a tiny church, and every penny counts. I could do some volunteer work, and cut my monetary contribution down. In fact, all we could come up with last Sunday was $15.

Well, back to the books. You all are helping my mental state a lot. Yesterday morning I was shaking with anger and sadness.

whitewing

Willa,

I said I wouldn't cancel my monthly payment to Multiple Sclerosis, which was only £5 a month. (Paid for years since found out that cousin had it).And I wasn't in debt but was spending uncontrollably.
Yes I agree that you have much more in comparison, however, you won't soon if you're not extremely careful.
What the guys on here normally advise is to do the free charity stuff (eg The Hunger Site clicks) and donating time. If there is something you are committed to, then cancel it anyway BUT make a note of all missed payments and when you are in a better situation you can catch up.

Seriously, you need to look after yourself first or you will explode. And then help others, but only when you can without risking defaulting on debts.

whitewing

The other thing that I am doing at the moment as part of trying to overpay on my mortgage is to take pride in the actual fact that I am paying it at all. So my challenge is to pay £15K off my mortgage this year. The vast majority of this is scheduled payments. In some ways it seems silly to include this in my total. But why shouldn't I celebrate this? There are plenty of people who aren't prioritising to pay debts. I feel lucky that, for the moment, I am able to meet my commitments (and I don't need people saying that I'm legally obliged to etc etc, I know all that, I just mean that we need to be pleased when things are going to plan, rather than trying, trying to do more. I choose to focus on the pymnts I am making, rather than the fact that I have another 29.5 years to go as that would depress me!)

So be pleased and positive with every single repayment that you and hubby are making. It's one less to worry about.

BACKFRMTHEEDGE

Willa,

Good luck and I agree with one of the other poster - a spending diary is a must. A spending diary will show where you are wasting money. I would give up the Rwanda donation. You can't give away what you havn't got, it doesn't make sense ...The local church may be a different matter if it has no money and you need it. You can't run a church on fresh air.

Anyway, good luck. If you want inspiration that you can become debt free pop over to the debt free roll of honour -

All The Best:money:

chocolatechipcookies

Willa wrote: »

My income: $2,200
Hubby's income: $1,500

Power: $100
DSL Service: $60 (necessary for my online business) Shop around for a cheaper company?
Cell Phone: shared $100 (necessary for my business-data plan)
Netflix Service $19 Lovefilm is £15 per month for unlimited DVDs, we used them for a while and they are very good.(by mail DVDs-we don't have television)
Email Service: $19
Fuel: $300 (we are rural, 45 miles to nearest town)
Home Insurance: $50
Car Insurance: $100
Property Tax: $100
Dog Food Etc.: $100 (we have four Australian Shepherds, figures incl. Vet)
Food Etc. $500 (I'm allergic to wheat, need special foods)
Eating Out: $100 Go out less
Haircuts: $40Compare prices from different salons
Health Insurance: $220
Clothing: $40
Gifts: $180 Shop around for deals (5 kids, 25 people on our gift list)
Entertainment: $30What exactly do you do?
Misc: $50 (my husbands hunting licenses, magazines, misc)
Church: $100 Volunteer instead, it's free
WorldVision Sponsorship: $35 (child in Rwanda)Put this on hold until you get your debts paid off.
Gardening supplies and Bird Food: $25Do you really need this every month?

DEBTS

Chase: $21,900 22.99% (payment $550)
USBank $19,900 12.99 $350)
PayPal: $ 2,100 21.9% $ 90)
Home Improvement Loan: $12,000 6.9% $536)
Truck Loan $10,200 5.9% $286)

Hubby's Debts

Don't know the interest rates, also, since he just defaulted on a couple, the rate is likely to go up)

BofA: $7,843 (payment $250)
Gas Card: $ 889 (payment $ 50)
PayPal: 497 (payment $ 50)
Wamu: 694 (payment $ 50)
Wells: 4,027 (payment $100)

All payments listed are minimum payments required.

Total Debts: $ 68,050

Total Income Monthly: $ 3,700
Outgoing: $ 4,531

Are your debts credit cards? Are they interest free?