Go to Jeff Salisbury LWGate Home Page.From: BOB FORD <BOB_FORD@compuserve.com>
Subject: financial bind
Date: Tue, 23 Jun 1998 10:59:46 -0400
Next Article (by Author): Re: Financial Bind Christy Rohrig
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>Date: Fri, 19 Jun 1998 10:43:52 -0400 = >From: Jack <jack@mailzone.com> >Subject: Financial Bind = >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 increas= e. >I should mention here that the money for our kids' education was set asi= de >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 spen= t. >Aside from those, we have credit card debt of @ $60k. I have been tryin= g to >get a new equity line, but with both my wife's salary and my annuity, th= e >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-commi= t >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 nev= er >done. = >Any thoughts or suggestions? >Thanks, >Jack JACK (THE USUAL WARNING) I am not an attorney and the following is not legal advice. It is just m= y opinion. It is based on my experience in California. The laws of other states may be different. = = There is no easy answer to your financial problem. It looks to me like your family income is less than your family expenses. You can only live this way for a short period of time. Someday you are going to run out of credit.= = You must either reduce your expenses or increase your income. = Immediately consult a bankruptcy attorney in your state. They can tell y= ou what you can keep and what must be sold to pay your creditors. Bankruptc= y may be only a temporary solution for you however. The only permanent solution is for your income to exceed your expenses. = I would also check with your attorney about the money for your kids education that you have "set aside". When you file bankruptcy you must list all of the assets you control. If that money is under your control, the bankruptcy court may give it to your creditors. Ask yourself what amount of money you could pay after your expenses to reduce your debt to zero. Then contact your creditors and ask them to accept that amount of money each month to reduce your debt. If the interest on your debt is more than the amount you can pay each month, bankruptcy is your only choice. Otherwise you can never get out of debt.= GOOD LUCK BOB FORD BOB_FORD@COMPUSERVE.COM = - -
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