Credit Cards and defaulting - what can they do? - Page 9

Zeste · 05-28-2009, 01:12 PM

Quote:

Originally Posted by Dis

Having said that, I am unaware of what the housing market is in Utah, a 300k house in Houston will put you in the upper middle class subdivision running a 3500+ square foot house, gated community etc.

Seems like a lot of house for someone pulling in just 50k a year. Again, I might have missed some explanation of income.

Tough decisions, in the end, you need to put family first. End of story. Marathon to 2011.

Yeah your assessment was much more accurate. I think people thought I was posting about wanting to ditch my debt, which isn't true. I just wanted to know what happens if the shit hit the fan and I was just out of cashflow. So far, I've been making progress in paying stuff off.

I spent 350k building a 2200 sqft house with a 1100 sqft garage. That was 350k on contractor self-builder prices. 100k (after a 35k discount from my aunt) for the .25 acre, 250k for the materials and subcontractor labor, including the 20,000 dollar residential building permit. Interest free construction loan from my dad on his deathbed, and no overhead or contractor fees using my father-in-laws construction company.

I just paid for sticks, bricks, and mexican labor. It's in an upper middle-class brand new subdivision, out on the edge of town.

Built the house first, owned it outright the day it was finished, then refinanced it to pay back my aunt the 100k and my dad the 200k (I still owe him 50k, off the books). Appraised for 400k, and the bank did a "refi" since I hadn't borrowed any money on paper and legally I owned the home outright.
Got 300k out of the refi to pay back my land/materials, and that is where I stand today.

The master plan was to build the house, and since we got it for so much cheaper than normally possible, there'd be a nice big chunk of equity in a few years, and we could sell and rebuild across the street. But, the economy tanked and my neighborhood turned into a place with tons of foreclosures, so I gotta wait it out and let the equity come back.

I know people say I should walk from the house, but if I can just stay in it, that equity will come back someday and I could end up with a huge down payment on another build.

Clerica · 05-28-2009, 03:10 PM

So you borrowed 100k from your aunt and 350k from your dad to build the house and payed them back? Why not talk to your aunt and tell her your situation and get 38k loan from her to pay off your credit cards and student/small business loan?

Wouldn't that be easiest thing to do? Then you can pay your aunt back at much more relaxed payment plan that takes into account your current financial situation econmically and with your wife expecting.

Zeste · 05-28-2009, 03:17 PM

Quote:

Originally Posted by Clerica

So you borrowed 100k from your aunt and 350k from your dad to build the house and payed them back? Why not talk to your aunt and tell her your situation and get 38k loan from her to pay off your credit cards and student/small business loan?

Wouldn't that be easiest thing to do? Then you can pay your aunt back at much more relaxed payment plan that takes into account your current financial situation econmically and with your wife expecting.

100k +250k, and yeah, I supposed you could look at it as I borrowed it and then paid it back when the house was finished and mortgaged.

My Aunt's statement to me when I explained my peril was "You're big."

If she helped me, I'd learn nothing.

Ritley · 05-28-2009, 03:41 PM

It seems to me that there is going to be very little chance of you being able to come out of this without bankruptcy. And to be honest, it will be quicker easier declaring bankruptcy and then working on building up your credit again than it will be to pay off your debts with your current salary. Bankruptcy also isn't as bad as most people make it out to be. Your credit will be better after a bankruptcy than it is right now because of how much debt you are in compared to your income.

Anyways, good luck. It's going to be a rough couple years no matter what you do.

Zeste · 05-28-2009, 04:10 PM

Bankruptcy won't work. They will see my trust inheritance, and NOT declare it a "no asset" case, and just sue the inheritance, which leaves me no better off.

Snce I've started this thread I've sold a bunch of shit, done extra work, and improved my spot a bunch. It really isn't as dire as it has grown to sound. I never intended to default, and still don't. Settle the debts at worst. Work extra hard to pay them off asap at best.

Elerion · 05-28-2009, 04:30 PM

Fucking seriously. If your aunt has free cash to cover you, it's retarded if you have to keep paying CC interest. That shit is burning so much pointless cash you could use to pay down your debts.

Approach your aunt to work out a deal where you borrow $20k from her and pay down all your CC debt to 0. Have a person with law experience (check with your contracting company if they have a business lawyer on staff, perhaps) work out a contract that goes along the lines of:
- Interest rate comparable to a CD.
- You must contact the CC company and obtain and maintain a stupid low credit limit (like $1000?) so you won't spend in excess again.
- Loan repayment as quickly as humanly possible. Set a (quite high) minimum payment plan, and give a clause saying you intend to pay more than that if cash flow allows.
- She gets ownership of your house if you thoroughly break the agreed upon terms.

There, that should save you something like $3500 annually in pointless interest. Between that and your hard work, low spending and general diligence, you should be able to pay her back in what... 3 years?

That contract should give her decent security for her cash, earn similar returns to what she would on it anyway, and she'll be helping you out immensely.

Paying credit card interest is just fucked up stupid if there's ANY way around it.

TheCutlery · 05-28-2009, 06:14 PM

You can't put family in the position of loaning you money, that's just a shitty thing to do. You don't know what they need it for or what their financial situation is, and the last thing you should be doing is guilt tripping your family into giving you a loan because they love you. Fuck that shit, do it yourself.

Elerion · 05-28-2009, 07:03 PM

Have you read the thread? He will fuck his family over if he goes bankrupt. He already fucked up bad. Paying $3k+ extra annually in CC interest is just god damn dumb.

Zeste · 05-28-2009, 07:07 PM

No one is loaning me money, so I do it myself or not at all.

Hachima · 05-28-2009, 07:30 PM

Loaning money to friends or family is the fastest way to hurt relationships unless the person loaning the money goes in with the expectation of never seeing a penny repaid.

What do houses like yours list as on Zillow?

Zeste · 05-28-2009, 08:19 PM

Zillow doesn't have my neighborhood. It's all too new.

Can you check comps by stats?

Hachima · 05-28-2009, 08:26 PM

Yeah, all sorts of filters you can apply.

TheCutlery · 05-28-2009, 09:12 PM

Quote:

Originally Posted by Elerion

Have you read the thread? He will fuck his family over if he goes bankrupt. He already fucked up bad. Paying $3k+ extra annually in CC interest is just god damn dumb.

Oh, bankruptcy can be imposed on you? No? It's a choice you have to make?

Oh, right, all they can really do is call you a bunch of times and tell you you're late on the payments. At which point you tell them "Yeah, that's great, I'll pay you when I have 2 cents to rub together."

There's plenty of grey area between bankruptcy and paying all the bills full and on time. The options are not "Fuck his family" or "Fuck his family."

Have you read the thread?

Zeste · 05-28-2009, 09:30 PM

I keep saying it: a lawyer told me my bankruptcy claim would be DENIED by the courts. They would not discharge my debt and I would remain liable.

Plus, some of you must have missed where I said I already talked to my aunt and she does not think I NEED any help.

opiate82 · 05-31-2009, 02:41 PM

I really don't see any other options for you rather than working your ass off. Get a 2nd job like UPS (like someone suggested earlier) or check your local grocery stores. They always need grunts at night stalking shelves and because they are union you will get paid decent and get benefits.

After you get a 2nd job, find a 3rd one working a drive-thru window at McDonalds or somthing on the weekends, then the few hours you are home offer to cut your neighbors lawns at $10 a piece.

Your family is probably pretty smart for not loaning you money at this point and your relationships with them will be better for it. However you haven't mentioned your wife pulling in any income at all. Perhaps your family can help you out by watching your kid(s) a little bit so your wife CAN go out and bring in some cashflow.

Also, every bit of financial advice I have ever seen has always suggested putting away something into savings no matter what your circumstance. Sure you might save more money if you devoted as much of your income as possible too your debt, but if something else pops (eg unforeseen medical expense) you'll just end up racking up more debt because you don't have a 'rainy day' fund. You can't afford to do much, but start setting aside 10% of each of each paycheck in a 'rainy day' fund.

Seriously, I don't see any way out of this for you than working yourself dead for the next 5 years at least.

05-28-2009, 04:10 PM	#125 (permalink)
Zeste Oooooooooooohhhh, yeeeeeeeeeesssssss Join Date: Feb 2005 Posts: 4,378 +69 Internets	Bankruptcy won't work. They will see my trust inheritance, and NOT declare it a "no asset" case, and just sue the inheritance, which leaves me no better off. Snce I've started this thread I've sold a bunch of shit, done extra work, and improved my spot a bunch. It really isn't as dire as it has grown to sound. I never intended to default, and still don't. Settle the debts at worst. Work extra hard to pay them off asap at best. __________________

05-28-2009, 07:07 PM	#129 (permalink)
Zeste Oooooooooooohhhh, yeeeeeeeeeesssssss Join Date: Feb 2005 Posts: 4,378 +69 Internets	No one is loaning me money, so I do it myself or not at all. __________________

05-28-2009, 08:19 PM	#131 (permalink)
Zeste Oooooooooooohhhh, yeeeeeeeeeesssssss Join Date: Feb 2005 Posts: 4,378 +69 Internets	Zillow doesn't have my neighborhood. It's all too new. Can you check comps by stats? __________________

05-28-2009, 09:30 PM	#134 (permalink)
Zeste Oooooooooooohhhh, yeeeeeeeeeesssssss Join Date: Feb 2005 Posts: 4,378 +69 Internets	I keep saying it: a lawyer told me my bankruptcy claim would be DENIED by the courts. They would not discharge my debt and I would remain liable. Plus, some of you must have missed where I said I already talked to my aunt and she does not think I NEED any help. __________________

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05-28-2009, 03:10 PM	#122 (permalink)
Clerica Registered User Join Date: Nov 2006 Posts: 159 +4 Internets	So you borrowed 100k from your aunt and 350k from your dad to build the house and payed them back? Why not talk to your aunt and tell her your situation and get 38k loan from her to pay off your credit cards and student/small business loan? Wouldn't that be easiest thing to do? Then you can pay your aunt back at much more relaxed payment plan that takes into account your current financial situation econmically and with your wife expecting.

05-28-2009, 03:41 PM	#124 (permalink)
Ritley Registered User Join Date: Jan 2004 Posts: 146 -3 Internets	It seems to me that there is going to be very little chance of you being able to come out of this without bankruptcy. And to be honest, it will be quicker easier declaring bankruptcy and then working on building up your credit again than it will be to pay off your debts with your current salary. Bankruptcy also isn't as bad as most people make it out to be. Your credit will be better after a bankruptcy than it is right now because of how much debt you are in compared to your income. Anyways, good luck. It's going to be a rough couple years no matter what you do.

05-28-2009, 04:30 PM	#126 (permalink)
Elerion My milkshake Join Date: Nov 2004 Posts: 2,094 +6 Internets	Fucking seriously. If your aunt has free cash to cover you, it's retarded if you have to keep paying CC interest. That shit is burning so much pointless cash you could use to pay down your debts. Approach your aunt to work out a deal where you borrow $20k from her and pay down all your CC debt to 0. Have a person with law experience (check with your contracting company if they have a business lawyer on staff, perhaps) work out a contract that goes along the lines of: - Interest rate comparable to a CD. - You must contact the CC company and obtain and maintain a stupid low credit limit (like $1000?) so you won't spend in excess again. - Loan repayment as quickly as humanly possible. Set a (quite high) minimum payment plan, and give a clause saying you intend to pay more than that if cash flow allows. - She gets ownership of your house if you thoroughly break the agreed upon terms. There, that should save you something like $3500 annually in pointless interest. Between that and your hard work, low spending and general diligence, you should be able to pay her back in what... 3 years? That contract should give her decent security for her cash, earn similar returns to what she would on it anyway, and she'll be helping you out immensely. Paying credit card interest is just fucked up stupid if there's ANY way around it.

05-28-2009, 06:14 PM	#127 (permalink)
TheCutlery You means that that things that he gaves you ams like little monies what ams only for beers? Join Date: May 2003 Location: MN Posts: 2,592	You can't put family in the position of loaning you money, that's just a shitty thing to do. You don't know what they need it for or what their financial situation is, and the last thing you should be doing is guilt tripping your family into giving you a loan because they love you. Fuck that shit, do it yourself.

05-28-2009, 07:03 PM	#128 (permalink)
Elerion My milkshake Join Date: Nov 2004 Posts: 2,094 +6 Internets	Have you read the thread? He will fuck his family over if he goes bankrupt. He already fucked up bad. Paying $3k+ extra annually in CC interest is just god damn dumb.

05-28-2009, 07:30 PM	#130 (permalink)
Hachima Registered User Join Date: Oct 2004 Posts: 2,081	Loaning money to friends or family is the fastest way to hurt relationships unless the person loaning the money goes in with the expectation of never seeing a penny repaid. What do houses like yours list as on Zillow?

05-28-2009, 08:26 PM	#132 (permalink)
Hachima Registered User Join Date: Oct 2004 Posts: 2,081	Yeah, all sorts of filters you can apply.

05-31-2009, 02:41 PM	#135 (permalink)
opiate82 When someone asks you if you're a god, you say YES! Join Date: Oct 2007 Posts: 83	I really don't see any other options for you rather than working your ass off. Get a 2nd job like UPS (like someone suggested earlier) or check your local grocery stores. They always need grunts at night stalking shelves and because they are union you will get paid decent and get benefits. After you get a 2nd job, find a 3rd one working a drive-thru window at McDonalds or somthing on the weekends, then the few hours you are home offer to cut your neighbors lawns at $10 a piece. Your family is probably pretty smart for not loaning you money at this point and your relationships with them will be better for it. However you haven't mentioned your wife pulling in any income at all. Perhaps your family can help you out by watching your kid(s) a little bit so your wife CAN go out and bring in some cashflow. Also, every bit of financial advice I have ever seen has always suggested putting away something into savings no matter what your circumstance. Sure you might save more money if you devoted as much of your income as possible too your debt, but if something else pops (eg unforeseen medical expense) you'll just end up racking up more debt because you don't have a 'rainy day' fund. You can't afford to do much, but start setting aside 10% of each of each paycheck in a 'rainy day' fund. Seriously, I don't see any way out of this for you than working yourself dead for the next 5 years at least.