How do you get out of a financial hole?

Question

I'm in a Chapter 13 and getting ready to lose my house to foreclosure because I had car repairs that put me behind on my house pymt. I found out I have a lein on my house from my ex husbands business, so I can't refinance. I can never seem to get a break. It is sooo depressing, I don't feel like I'll ever get out of this mess. How do you get ahead when you can't get a break??

Answer 1

Your situation does sound horrible. Not knowing any specifics, I have a few practical suggestions. Off topic, it is equally important for you to take care of yourself and your well being during this time. Money problems can cause some serious depression, so don't be afraid to address that in your life as diligently as you do your financial well being.

Firstly, you need to extricate yourself entirely from your ex husband which means scrutinizing your credit report and doing what will amount to a lot of paper work.

Secondly, you need to prioritize. It sounds like fixing your car got you into trouble, but maybe your car isn't absolutely needed? Is it possible to use public transportation or car pool? I know it's harder and if you have a family entirely inconvenient, but during these times you need to sacrifice. Take a closer look at what else you can cut out of your budget. Are you living as frugally as you possibly can? Clipping coupons, cutting extraneous services like cable/satellite TV, internet, renting videos, etc... You'd be surprised how much extra money a month may just be lying around. I'm not suggesting live like a monk, but maybe just for a little while... :-)

Life will never serve you a "break." You have to make your own opportunities. This means being creative, being smart and not making poor decisions.

Good luck!

Answer 2

Leins can be removed if you can settle the debt. Nobody really wants to take your house because it creates more work for them to get their money. They would much rather get their money, remove the lein and carry on.

I would beg, borrow or sell things to get the lein removed from your house. Once you have done that, if you have any equity in your home at all, get a home equity loan to pay off all other debt. There's no point in paying interest on any other loan when all home equity loan interest is tax deductable. You can also refinance if that will help your monthly cashflow. If you're not getting at least 2% better interest on the re-fi, it might not be worthwhile.

There are free financial advice services in most metropolitan areas. You might talk to a debt consolidation company and see what assets you can leverage to get out of the hole. For example, you can borrow against your 401k (so you're actually borrowing money against yourself and paying yourself back plus interest) or even take a draw against it for a primary residence.

Without know your specific debts and income, it's hard to say specifically what you should do. There are usually ways out of a hole but sometimes the road to recovery is a little painful.

Best of luck. Remember it's always darkest before the dawn!

Answer 3

Sell the house fast and pay off the mortgage so you don't lose your credit entirely.
You can't keep it and by cutting your losses you may just break even.
You may need to work more than one job for a few years, or you may need to get a better-paying job. Your primary need right now is to take at least one step a day that will bring you toward solvency.
Cut up the credit cards- save one for emergency only and call the ocmpany and reduce the limit to $1000 so you won't be tempted.
Resign yourself to no new clothes. If your car is crap- sell it and move to a place where you can walk or bus to most things.
You should stop buying coffee and lunches, and brown bag and bring a travel cup. If you smoke- quit. You would be amazed how much small economies add up- if you put all those savings in a jar, you'd see them pile up quickly.
It may seem stupid and petty to put in small economies, but look at it this way- NO ONE else is coming to your rescue. You- and your ex- dug yourself into this hole and only you can dig out. To be fair- you chose not to pay your mortgage on time, and that violated the agreement you had with the bank. It doesn't matter what your excuse or explanation is- they have the right to foreclose. Sell and downsize fast and you may be able to dig yourself out. Don't and you'll be on the street with all your stuff.
You can get ahead. I have seen people do it. You have to be dogged and determined and not stop ever.
Good luck. Or better yet- good behaviour!

Answer 4

I have been in your situation, first just take a deep breath--go see a therapist if you think you need to talk to someone or are just overwhelmed. (It will be money well spent)

Next, find a cheap apartment near your job, one that you can walk to if possible. Yes, you will have to give up some amenities--but those cost money that you will not have.

If you have an hourly job, ask for overtime, or get a second job. Work as much as possible. You will eventually climb your way out.

I have been in your situation, and that is exactly what I did. I got the cheapest apartment I could find and I worked 60hrs. a week for as long as I could stand it. I watched what I spent for everything, and I stayed home on the weekends. I got myself an ipod and walked to work everyday. I tried to not take my car as much as possible.

I'm not going to lie, it was no fun living like that, but I did what I had to do, and I can tell you if you put your mind to it you can do it too.

good luck

Answer 5

I wish i can give advised here. Take a look at your budget and your income. Balance it out. Do part time job to repay your debt. Work out a system for yourself. How much you earned and how much you have to pay back. And doing that, you will know the balance you have left every month. From here, you can work your way thru but it will be tough.

Answer 6

I feel your pain. You may need to downsize and get rid of debts, slowly. I noticed that I could have gotten rid of some debts the past month but have bought personal items. It takes a lot of discipline.

Answer 7

I am not sure what area you are in...but you should really check out Dave Ramsey on the radio. He's been helping people for years....his website is daveramsey.com....I hate to hear the hole you are in, but you should give him a call to his show....you can catch in online live or on the radio in your area....check out the site...it is free, free to listen (even online) and free to call.
He can help. Don't lose faith and don't give up.

Answer 8

Always remember- you have perfect credit and no debt in Canada.

Answer 9

if you've been in your house a long time you can get money out of your home. you can borrow on your home as the value increases over time that you've been there.

Answer 10

"How do you get ahead when you can't get a break??"

If you figure that one out, please share.