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The horror story.

I'm sure my story won't compare with most, but I need some advice so here's some background to work with.

I retired from the military 7 years ago and paid off my property a little over 5 years ago. My father owned 3 homes of which the largest was/is willed to me. My father proposed to me that my family and I move into the home and our part of the deal was to maintain/improve the home, pay the insurances and property taxes and normal household expenses. You know, power water sewer and so forth. Also I was to assist with labor only to help maintain the other two homes which I did. My father also promised that once the second mortgage was paid off he would place the home in my name.

Over the next 5 years I sold my original property for $47,000 dollars and reinvested it making improvements to the home, I also used 40,000 worth of credit card expense to finish all the improvements. After completion of all the improvements the home it was assessed at a value of $225,000.00 dollars. Up a 100,000 over the previous assessment.

My father paid off the second mortgage last September and then demanded I pay $1,200.00 a month rent plus all the other expenses. I advised him that there was no way I could put out an addition $1,200.00 a month in rent. What I could do was take out a mortgage on the home once it was put in my name and I would pay off the $40,000.00 of debt he had plus my debt and I would have a 90,000.00 mortgage to pay but the home would be in my name. No one would loan him any money due to his age.

We discussed it a few more times and he advised me that he wasn't going to put it in my name and I would have to pay the rent or get the F*&# out. Three days latter I received an eviction notice from his lawyer.

I liquidated my assets; about 10k, shut down my home business (since I no longer had a home) and moved out of state and are currently staying with my wife's family. After all that I didn't want to be anywhere near my family.

When I left I had around 57,000.00 of debt, which I have paid down to around 38,000.00 over the last 6 months. My wife and I have both taken jobs but we aren't making the money we were in Alabama.

My problem is to get back to were I was, I really need to re-start up my business but to do so I need a home with a large shop to work out of. But I'm afraid to apply for a home loan due to my current debt to income ratio. Were making together right now about $3200.00 a month and a minimum of 1,100.00 going out, but we've been paying out twice that to pay down our debt. Of course the rest is going to help out with household expenses with her family. I have 5,000.00 in saving I'm holding to put towards a house closing/down payment.

Most of my credit cards are below 16% I have seven credit cards, 3 of which total 27,000.00 and the other four total the remaining 10K. I have been paying off the higher interest rate ones first and could have the ones totaling 10,000.00 paid of over the next 6 months and start chewing at the others.

My credit is good with the exception of my debt to income ratio, I am waiting on credit reports to review.

The way I'm going it's still going to take two to three years to get back to zero on my credit card debt, and I sure don't want to stay with my in-laws that long. Don't get me wrong, they have been great! Treated me much better than my own family.

So I'm looking for recommendations to improve my situation.

Thank you
John




Hi John,

It is very nice to see that inspite of so many obstacles you are still determined to pay off your debt and you are paying it off as much as you can. By studying your situation, what I felt is that, a little budgeting is needed by which you can pay off your debt as fast as you can by saving money.

From the figures supplied by you, it is evident that you have other debts amounting to $19000 ($57000-$38000) and credit card debts to the tune of $ 37000. So your total debts is $ 56000($19000+$37000). What I suggest is that you do not pay off the higher interest credit card debts first.
Because your motive is to pay off all the debts and when your motive is to pay off all the debts then by paying off the higher interest credit card debts will not help you to pay off the fdebts aster. What you have to follow is the principle of accelerator margin. By following this path, you will be able to clear off your other debts of $19000 and credit card debts of $37000.


Regards,
Peter

Sub: #1 posted on Mon, 05/23/2005 - 23:37

peter peter

(Posts: 285 | Credits: 114.11)

Hi John

It's very tough to be in a situation like this. I will suggest you to solve this problem internally having a talk with your father yet again instead of putting it on open platform in front of the outsiders. Since he is your father, he may not have assumed the worst part of it. Please talk to him and see if there is any way out. Just believe that when there is no hope, hope is around the corner.

Regards
Roxette

Sub: #2 posted on Tue, 05/24/2005 - 11:25

roxette roxette

(Posts: 4009 | Credits: 559.9)

Hello Roxette

Well if my father would have just kicked me and my wife out it would have been one thing, and I probably could get over it. But I also have a eight year old son, his only grandson which he also kick out. As fare as a way out I don't see any for him with his indebtedness the on way he can come out of it would be to sell one of the homes he has. plus I seriously doubt I'll ever see the money I put into the home back. I also resently found out that the day after we moved out he started moving into the house we renovated. So what was he really after.

Hi peter

Yes the original debt was 57,000.00, I have paid off 19,000.00 of it in the last six months. Another thousand will be gone by the end of May. So roughly I have paid off 40% of my debt in 6 months.

We have budgeted to near the bone, I still have some other monthly bills, stuff you can't get rid of like car and life insurances and we pay half of the house hold expenses and food bills. I set a little aside if my son needs something special, and a small allowance for the wife and I to go out to dinner once a month. Got to keep the flame burning.

Now for some good news. The owner of the company I am currently working for asked me this morning to meet him for lunch, he also advised me to keep it quiet and not tell anyone that we were meeting. At lunch he offered me an upper level management position which will effectively double my income. The reason for the hush-hush was he was letting someone go due to there productivity being down 40% while the rest of the business was up 30%. I feel bad for the guy that is loosing his job, but right now I'll take any break I can get. The funny part was I've had two other job offers in the last week but this promotion was by far better than the others I was offer.

I refuse to give up and file bankrupcey, it's just not going to happen.

Sub: #3 posted on Tue, 05/24/2005 - 15:31

Unregistered


Hi Guest

I can imagine that you are a very optimistic person. I congratulate you on your upper level management position and wish you the very best from my side. I already mentioned in my previous post and I say it once again
Just believe that when there is no hope, hope is around the corner.

Please keep posting with your valuable suggestions and comments in the forums. You can also sign in as a registered member in this site for free of cost. Doing this, you can enjoy some extra earnings and other valued services designed exclusively for the members of this site.

I hope that next time we will get more acquainted to each other after I see you signed in this site.

Regards and best wishes
Roxette

Sub: #4 posted on Tue, 05/24/2005 - 16:05

roxette roxette

(Posts: 4009 | Credits: 559.9)

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