Financial Bind

From: Jack <jack@mailzone.com>
Subject: Financial Bind
Date: Fri, 19 Jun 1998 10:43:52 -0400

Next Article (by Date): consolidation loans Ron Rothenberg
Previous Article (by Date): Re: Pay taxes on capital gains even if *below* deduction? Avrum Lapin
Articles sorted by: [Date] [Author] [Subject]

Hi -

I have found myself in a very bad financial situation and would like
suggestions from anyone who may wish to help.

Two years ago I found myself, at age 47, retiring from the U.S. Federal
Government on a disability.  This disability does not prevent me from working
at all, so I did not qualify for Social Security assistance.  I am married,
with 2 children in college.  The debts we had accumulated prior to my
retirement were significant, but at that time I was getting 60% of my former
salary and managed to do okay.  After the first year, my annuity was reduced to
40% of my former salary and slowly the debts began to increase.  I should
mention here that the money for our kids' education was set aside by their
grandparents over the years, so that is not a real problem at this time.

Anyway, the credit card debts have built up to a very high number and I've
already cashed in both my 401k and my IRA.  My home has a very good mortgage on
it (15 year fixed, 6.375%) and I have about 10 years left on that.  I also have
a $25k equity line (prime + 1), most of which is spent.  Aside from those, we
have credit card debt of @ $60k.  I have been trying to get a new equity line,
but with both my wife's salary and my annuity, the dept-to-income ratio is @
58% and no one yet will loan us the money to consolidate (I would destroy most
of the credit cards, if I could do this).  I don't want to re-finance the
entire debt, including the mortgage, as I think there is a good chance that I
will see the end of that loan.

The nature of my illness does not allow me to work full time and finding
part-time work in my field (I was in data processing/computer work) has been
impossible.  Also, the nature of my illness would make it difficult to work in
a standard, shirt and tie, office environment.  I am willing to do other work,
but nothing seems to be available over about minimum wage.

I have considered bankruptcy, but I want, no need, to keep my house.  I think I
understand that Federal bankruptcy laws may allow me to re-commit to the
mortgage lenders and keep my home, thereby excluding it from my assets for
liquidation.  However, I have also heard that if your state has established
their own exclusion rules, then those are the ones that are followed.  I
believe that my state, Maryland, has their own rules, but I cannot find out if
my home can be excluded.

I sincerely prefer paying off my debts, but cannot see that happening at this
time.  I am already starting to incur late charges, something I have never
done.

Any thoughts or suggestions?

Thanks,
Jack




- -

Go to Jeff Salisbury LWGate Home Page.