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If you consider a short sale, your credit will take a major hit, there is no way around it. A bank will not consider a short sale until you go into default. If you have an ARM or high interest loan, or some other tough mortgage, you may be able to negotiate out terms that you can afford. But if your as far under (monthly expenses speaking) the bank will see you have no hope of repaying the debt and simply wait until your savings run out or you default.
If you can sell for what you owe on it, and only have to come up with commissions and closings costs, use your savings to pay it all or most of it. Get a job asap and try and save more if you run short. You can also try selling anything you have of value, and lower your monthly expenses. That will be the only way to save your credit.
As far as moving across the country, the only way I see you being able to afford that is by either renting and working where you currently are until you have some more saved up. Or go through with the Shortsale and use what's left of your savings and credit to move.
One other thought - if you are planning on moving out of state, what is the possibility for selling your husbands business as a going concern? That would raise a large sum of much needed cash, cut expenses and he could go to work somewhere full time NOW to increase income?
Where exactly are you moving and why if you don't mind me asking?
The company has great potential, but is disorganized. (I had considered putting myself to work full time organizing and managing it, but just getting the database in place is a sizable chore - I can't now, as we cannot afford me to not work and immediately bring in money!) Simply put, basically he is a one man show that is incorporated for the tax and liability benefits. Thousands of invoices with customers, but not in a database or any good order. I'm not sure how "sell-able" that makes the company.
Why we want to move? We almost broke up a 22 year marriage two years ago over many many personal mistakes that happened here in this town and have a wish for a "new beginning" now that we are reconciled and more in love than ever. (aka: lotsa bad memories in tampa) We are looking for something that forces us to "start over", too - financially, emotionally, life-wise. Also, as embarrassing as it is, our children depend too much on us and we are weak when it comes to denying them (we were both denied much when we were growing up). It would, frankly, be easier to do from a distance.
Financially, there are other states that have far less crime, far less in health insurance (Hubby recently diagnosed with type II diabetes), far less for electricity, water and gas, far less in auto and home insurance, yet home prices and food and gas and earnings are all comparable. In our mid-40's, better, less expensive health insurance is a BIG reason.
What????? Those kids are costing you 800 a month each? They can each have 2 McJobs too. They may as well start learning about the real world now.
Oops - they PAY $400 each. Honestly, tho, it is not enough to offset the food/elec/water increase.
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Being poor is like riding a bike. You never forget how to do it. You did it once and you can do it again.
heh-heh. yeah, I know. I sure don't WANT to go there, but I've survived on close to nothing before and can do it again. Mostly, I am concerned that I am throwing good money after bad if I attempt to tread water in this current financial crisis, or should we just completely throw in the towel and declare BK. It is kinda looking like 6 of one, 1/2 dozen of another right now...
...but part of me (us, really) would rather bite the bullet get our heads well above water and not lose it all.
What trouble me is this: if we really are BK candidates (legitimate ones), why postpone the inevitable? Why put ourselves through even more heartache and misery if we are just heading to less than zero, anyway?
Tough love on the kids...THey should be out on their own. If you allow them to stay and live off of you (even if they do pay $400 each per month-that is nothing) you are setting them up for the same financial ruin you are experiencing down the road when they do finally enter the real world. Tell them each they have 2 months notice to find a place of their own and move out. (they could get an apartment together) SIt down and teach them how to budget so they don't end up where you are. If you don't know how to do it, call someone who does. They are part of the reason you are in this mess...they need to carry their won weight. They are not the key to getting out of debt as you have other issues to deal with but get those kids out. Sucking you dry. THANK GOODNESS I moved out at 19 and had to learn tow ork and pay for my own things. I can't imagine how I would be if I had lived at home off of mom and dad. (my brother did that for many years and he had to learn quick how to manage his money when he moved out)
If you consider a short sale, your credit will take a major hit, there is no way around it. A bank will not consider a short sale until you go into default. If you have an ARM or high interest loan, or some other tough mortgage, you may be able to negotiate out terms that you can afford. But if your as far under (monthly expenses speaking) the bank will see you have no hope of repaying the debt and simply wait until your savings run out or you default.
I have a 244k 1st remaining at 6.25% + a 2nd for $74.5K at 9.95%. Do you think GMAC Mortgage would consider forbearance of some kind at least on the 2nd? Would they allow us to postpone payments on the second (no doubt adding it to the principal, right?) for 5 months or to re-write the interest rate, or something like that?
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If you can sell for what you owe on it, and only have to come up with commissions and closings costs, use your savings to pay it all or most of it. Get a job asap and try and save more if you run short.
Job ASAP goes without saying at this point. ... I wonder if I dropped the price again if I could get an immediate buyer? Maybe I could drop it to the mortgage amount due with the stip the the buyer pays all closing costs?
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You can also try selling anything you have of value, and lower your monthly expenses. That will be the only way to save your credit.
Yep, we have been lowering, but are about to take drastic action...
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....Or go through with the Shortsale and use what's left of your savings and credit to move.
With shortsales taking so long, and the demand of the lender that you use all your resources (aka, what's left of the cash/savings) I think the only thing a SHOULD do is pay down those credit cards and keep that credit only for hardship "cash" to move and then do the "Dave Ramsey" and work work work and live cheaply til they are all paid off!
Bankruptcy is very problematic. 200 points off of your credit and years and years to clear it up. It is the solution of LAST RESORT and you are not there yet. Plus if you buy in the future, because the first mortgage would eat up the foreclosure, the second mortgage holder could potentially go after your equity in a future home.
Definitely slash your price - I'm surprised you haven't done so already. Don't chase the market down, get the noose from around your neck.
Hearing that lots of mortgage brokers and RE agents in some parts of Florida are begging for jobs around now, you might find a buyer for the business without having to clean up the database 100%. If he has customers who call that may be enough to sell as a going concern.
One other thought - the expenses on the business appear rather high, especially for a slow period. Frequently people think of the expenses that they can write off as free money - it's not, it is still an expense. It looks like there is potential for trimming the fat there. And if the time is slow, why doesn't your hubby start organizing is database himself? If leaving the state, you definitely want to be able to sell the business rather than just walking away from it.
Bankruptcy is very problematic. 200 points off of your credit and years and years to clear it up. It is the solution of LAST RESORT and you are not there yet.
I saw people getting huge car loans within 2 years of BK discharge so I thought it's pretty much "clear" after 2 years.... I didn't mean to be flip about it. But that was years and years ago and no doubt the whole thing's changed since then.
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Plus if you buy in the future, because the first mortgage would eat up the foreclosure, the second mortgage holder could potentially go after your equity in a future home.
... But I sure never thought they could come after a second home's equity!
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Definitely slash your price - I'm surprised you haven't done so already. Don't chase the market down, get the noose from around your neck.
We already dropped the price $5000 - and that puts us $30k less than comparable homes in the area! Even if I go list at what we owe, I don't have enough $$$ to pay closing costs and commissions, then! (I estimate about $20k total and today I only have $15k cash) If I pay down the credit cards with that cash to reduce my monthly debt, I guess I could dip back into the credit to pay the closing costs and maybe still have credit funds available to move..... Geez! what a cycle!
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Hearing that lots of mortgage brokers and RE agents in some parts of Florida are begging for jobs around now, you might find a buyer for the business without having to clean up the database 100%. If he has customers who call that may be enough to sell as a going concern.
Mortgage brokers and RE agents would be interested in an HVAC company? All that's valuable is the name, the tools and the past customers as future contacts for maintenance, repair, replacement. And unless they already know how to install and repair AC units, they'd have to hire someone who does. OR, are you saying that the customer base alone might have value to either other home service/sales/repair companies or what?
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One other thought - the expenses on the business appear rather high, especially for a slow period. Frequently people think of the expenses that they can write off as free money - it's not, it is still an expense. It looks like there is potential for trimming the fat there. And if the time is slow, why doesn't your hubby start organizing is database himself? If leaving the state, you definitely want to be able to sell the business rather than just walking away from it.
Yes, probably too much 'fat' there. I think organizing the database is not his forte. It's a matter of getting all the invoices in order, then inputting just to save the customer names, but also it would be a matter of learning QuickBooks and entering all his expenses, etc - which ain't no piece of cake!
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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Half the battle in these situations is to stay in touch with your mortgage lender. The other half is doing exactly what you are doing. In flying, when a pilot gets into a situation that's not good the mantra is; Climb, Call, Confess.
Good on you for doing what your doing and good luck.
... But I sure never thought they could come after a second home's equity!
Never realized it either till it happened to someone. As far as the debtor was concerned, there was money owed and they were going to get it if possible.
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Originally Posted by ohnoooo
Mortgage brokers and RE agents would be interested in an HVAC company? All that's valuable is the name, the tools and the past customers as future contacts for maintenance, repair, replacement. And unless they already know how to install and repair AC units, they'd have to hire someone who does. OR, are you saying that the customer base alone might have value to either other home service/sales/repair companies or what?
Name, tools, customers, I am sure he has repeat customers.....that would be a turnkey operation. You could definitely set it up as one by cleaning up the customer information. Of course that information has value. It would be of interest to any HVAC technician looking to be independant or any businessperson/investor who would want to employ people.
If you worked in sales, also look into shilling and try to line up a business account or two.
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