Years of Bad Financial Choices, But it's Time to Turn the Page...Help Please..

**bjl584** · 05-04-2018, 03:54 AM

Selling the house should net you around $46,000 assuming you sell it for $190,000 and you figure 6% commission for the realtor.

Why aren't your two adult children paying their student loans? That is one thing that I would address ASAP.

Is selling the car an option? I can't tell without more info.

Can you increase income? Any chance of picking up a side job?

The biggest question to answer is, are you truly ready to make a change? All of this didn't happen overnight. This is a result of many years of living above your means. Are you ready to make some hard choices and some sacrifices to get out of this mess and make sure that it never happens again?

**TrueMaroonGrind** · 05-04-2018, 05:32 AM

Originally posted by Royman View Post

I�ve made financial mistakes all of my adult life. I am man enough to admit it. Stupid, stupid, stupid!
Now that I�ve gotten that out of the way, it�s time to move forward and do damage control.
My situation:
I�m married and 58 years old with 2 grown children. We were recovering from bankruptcy during the time my kids were preparing for college. My sister co-signed for one student loan, my Uncle co-signed for the other student loan. My children are not making these loan payments, so I am.
I have a home equity line of credit balance of 132,000. Home market value about 190,000. Long story how it grew from the original 40,000, but again, I just need to look forward to try to make the best decisions I can at this point, hence, this is why I�m asking for help.
I owe 7000 on my car loan. I owe 4000.00 on another loan.
To summarize my debts:
� 132,000 Home Equity Line of Credit at 7.75 % interest
� 50,000 Student Loans at 6.5 % interest
� 7000 Car Loan at 4.59 % interest
� 4000 Misc. Loan at 12.59 % interest
Total income is about 60,000 / year.
I am ready to sell this house.
I just need some practical money advice help.
No need to beat me up about the stupid choices I�ve made or how my kids should be more responsible. I�ve learned some hard lessons.

Thanks for your suggestions!

Just my bits of advice. Find some way to fix that HELOC and quick. If my calculations are correct, you are paying $852 a month in interest. You are building the bank that financed that for you. Whether that is selling the house or rolling it into a mortgage(no idea if this is possible), just get that fixed.

Next, find someway to fix your mindset about debt. Seeking advice is a great first step, but now you can take another. I read Dave Ramsey's book and I think his program would be perfect for you(it isn't for everybody). In your case, debt isn't a tool. It is a burden on your life and family.

I would then pay off those two smaller loans as quickly as possible. Especially the one with the 12.59 interest rate. Give yourself some confidence and then move on to the big ones.

Finally, don't be afraid to be honest with those close with you. Let them know you are taking steps to get financially healthy and if they are decent people, they will understand and help you with your journey. People who are only there for what you spend on them don't deserve your money.

Sorry that got long and good luck.

**kork13** · 05-04-2018, 06:35 AM

I have to agree -- your debt is crushing, and you need to get out from under it as fast as physically possible. I'll apologize in advance, some of my advice will come off as a bit harsh. It's not intended that way, but you have some hard decisions to make, and you have to get 100% behind them if you're going to fix this mess.

1) Dave Ramsey's book "The Total Money Makeover" is written specifically for people like you, and I strongly recommend you find a copy and read it like it's your money bible. Your local library may have a copy, or if nothing else, it's on Amazon. There are some things in there that I don't totally agree with, but in the end, it'll help you regardless.

1b) Put together a budget with your wife, and stick to it. The book will walk you though doing that. Expenses must never exceed income!

2) Talk to your kids about your money situation. Be frank and forthright, and explain that you're in deep. You cannot handle their student loan payments, they need to pay them. This is non-negotiable. Their student loans, their responsibility. If they need to pick up extra jobs to pay them, so be it. You CANNOT help with those loans.

3) Speaking of extra jobs... You and your wife need to double-down on your income while you work through your debts. Look for and take advantage of any opportunities to pull in some more income. Overtime at work? Volunteer for every minute you can. Is your wife working outside the home? If not, she needs to find a job if at all possible. Like pizza? Perfect, you can deliver pizzas in the evening for some extra cash.

4) Get the house ready to put on the market, and get it sold. Move into a relatively inexpensive apartment/rental home. Take everything that you make from the sale (likely around $50k) and wipe out the car loan & personal loan. Use the remainder to create a 6-month emergency fund, and use it to ensure that you never have to borrow money again.

You're in the grateful position that selling the home & passing off the SL's to your kids will mostly resolve the debt situation. From there, it'll be learning to live your life without debt including credit cards, personal loans, auto loans, everything, because from here on out, it's not for you. You buy nothing without saving up the money to buy it WITH CASH. It's a radical change in your thought processes, but you need it. Ramsey's book will help with that.

**GoodSteward** · 05-04-2018, 07:28 AM

Welcome to the forums, and good job reaching out. You'd be amazed at how common your situation is, so don't think you are alone in finding yourself so upside down. Most people have too much pride to get help, even on a forum like this where you can stay relatively anonymous.

I won't repeat what others have stated, they all offer wise advice. The one thing I'll address more is the long-term side, your emotions and thought process. Many people come in, get advice, get excited, then give up. WHy? Because they never changed how they thought about money. They continued to figure out how to fit in old habits like instant gratification and justifying payments, which is what got them messed up to start with.

Reading Dave R's book is a great start, but knowing the information and applying it are two different things. This isn't a situation where you got a boo-boo, and need a band-aid. You are making self-destructive choices that will continue to inflict pain, as all people have done that find themselves in these situations(I've been there myself). That is what you need to address first, your view of money and debt. Otherwise, you will end up selling the house, paying off debts, and then getting right back into a bad situation again.

Stay on this forum, and read. Read about things you can't do yet, and set goals. Just knowing what successful people do will help keep you focused and motivated on wanting to be successful yourself.

Set your heart on winning with money(not loving money, but being successful with it). Get ready for some serious change, both financially and mentally. You'll love it.

**Jluke** · 05-04-2018, 09:15 AM

Originally posted by Royman View Post

To summarize my debts:
� 132,000 Home Equity Line of Credit at 7.75 % interest
� 50,000 Student Loans at 6.5 % interest
� 7000 Car Loan at 4.59 % interest
� 4000 Misc. Loan at 12.59 % interest
Total income is about 60,000 / year.
I am ready to sell this house.

Are you able to get a mortgage on the existing home to payoff the HELOC?

what's your plan if you sell the house - where will you live? you will also need money for moving costs, etc so is selling the house really going to save you money??

Once you solve your housing situation (on paper or have an idea), the $4000 loan should be paid off first, then the 7000 car loan.

it'll be a long process but it is doable.

**Petunia 100** · 05-04-2018, 11:41 AM

Hello Royman,

Please provide a bit more information. What is your goal? What is it that you are hoping to accomplish?

Do you and your wife have a written budget? If no, I suggest you make one. A good way to start is to begin tracking every cent you spend. Budgeting is key to tackling ANY financial goal.

**Benderz** · 05-04-2018, 02:26 PM

Royman, just a bit of encouragement. I like you new attitude! You can do it and now is the perfect time to start. Create a series of smaller steps on the way to your big goals. Write them down and cross them off when finished with thick red pen. Celebrate each one and surround yourself with encouraging people so you don't loose energy.

Like you I once had debt that was crushing me, but I was lucky to get disgusted with it earlier in life. Now on the other side there is no better feeling. You can do it too.

The only advice I have to offer from someone who climbed a similar mountain is treat debt like cancer and remove it from your life. Once you've gotten away from it learn to achieve your goals without it. I'm happy to say I now live with 0 debt consumer debt, haven't had a credit card in 10 years, only buy things I can afford to pay for in full, investing aggressively, and sneaking up on paying my house off. I started just like you, but you have the benefit of more life experience.

**Gailete** · 05-04-2018, 06:04 PM

Our society is set up to suck everyone into making financial mistakes. You aren't stupid. You just have been following along with the "This is what smart, wealthy, stylish people do" kind of propaganda that you see on the TV, in magazines, at work and everywhere. Don't think for a minute that you are the only one in this sort of mess. Probably half or more of the folks at your job are downing in debt as well.

You have made a choice to change and that means changes about everything. Does your wife work, or are you the sole support of this financial mess? Whose names are those student loans in? Apparently, your kids and the relatives and since the kids aren't paying them, the relatives would get dumped on and you promised you would handle it? Why would someone recovering from bankruptcy still think they could be able to handle the student loans if the kids didn't. Yes, that was stupid, but you know that. You need to form an agreement with your kids that they will be paying on their student loans from this point on or else. They must understand finances and better now than later otherwise they will be in the same situation that you are in. Right now, by not covering their own student loans, they are learning to skate and let someone else pick up the tab. One of the reasons that I have problems with people going through bankruptcy as they don�t seem to learn anything from it (just my own opinion from friends that I have seen go through it)

It sounds like you didn't learn much from the bankruptcy other than a free pass as you have big loans again. I didn't think that people that go through bankruptcy could even get loans for 7 years, so you are past that 7-year point? Is your wife working with you or against you on getting the bills paid off? This is a family emergency. It shouldn't fall all on your lap. We could give better advice if you could share your income and expenses including your wife's contribution as well. Do those kids still live at home? Are they paying to live at home?

To get out of this debt, you and your family are going to have to really work hard at it and tighten your belt. Cut everything to the bone. Almost everything can be done cheaper or more frugally. Going through a drive thru to pick up a large cup of Coke is generally the most expensive way to buy it (my friend that went bankrupt way of getting her Coke), buying a can from a vending machine is a bit cheaper but still expensive, buying a case from the store when on sale is probably the cheapest yet. Water however, is free and better for you. You must think through all these things. Every purchase scrutinized for was this really needed or was there a cheaper way of doing this? If we saw your budget, we could help on all these fronts. The cheaper you live, the sooner the bills get paid off. We are all happy to help.

Years of Bad Financial Choices, But it's Time to Turn the Page...Help Please..