ColbyS said: OP you might have to change your userid now.
Sorry, couldn't resist
Touché...
I guess it should be changed to EmptyWallet. Funny thing is I never intended to mean I was loaded, just that if FatWallet represented frugality and saving money, I wanted to be the "Fattest" of them all. I guess either way you swing it, it still doesn't work for me.
Congrats on following through. It is not the end of the world to damage your credit. It least now you know exactly what you are doing to you credit, instead of knee-jerking and screwing yourselves up, excessively.
Good Luck. Remember that so many here and in the US are just a job loss and a health issue away from your situation.
I guess what I am saying is that you are not alone.... not by a longshot. I always have an impromtu armegeddon plan in place.
And, yes, while I am a strong proponent in you selling the house, I CLEARLY understand why you would want some consistency in your family's life with all the other issues up in the air.
FattestWallet said: I consulted a BK attorney and of course they pretty much told me that I'm a perfect case for Chapter 7. Of course. The bankruptcy attorney isn't going to discourage you from filing bankruptcy...
FattestWallet said: I'm still pursuing the option of selling off the financed car if it makes sense and buy a cheaper car. Right now it saves me time and a lot of money on gas being a hybrid, not to mention it is reliable and I only have two years to pay it off (hopefully less if things start to turn around). I'm sure it's nice to have a expensive hybrid, but the fact is you can't afford that AND the house. If you're deciding to keep the house for now, at least get rid of that car! You're spending $6,500 on it every year. That's ridiculous. Also, since it's a hybrid, it's going to be expensive to repair after the warranty is up. The $3k-5k batteries only last 80k-100k miles apparently. Once you actually do pay it off, you'll want to get rid of it. Get rid of it now and get an appropriate used car.
"Also, since it's a hybrid, it's going to be expensive to repair after the warranty is up. The $3k-5k batteries only last 80k-100k miles apparently. Once you actually do pay it off, you'll want to get rid of it."
Hogwash. The Prius is one of *the* most reliable cars on the market today. While a beater would be cheaper if the question was what car to buy today, He has already eaten most of the cars's depreciation, so selling now is just plain stupid. I gather OP is trying to keep his HOV sticker, AND he saves $100's of dollars in gas monthly.
walletlessesque said: "Also, since it's a hybrid, it's going to be expensive to repair after the warranty is up. The $3k-5k batteries only last 80k-100k miles apparently. Once you actually do pay it off, you'll want to get rid of it."
Hogwash. The Prius is one of *the* most reliable cars on the market today. While a beater would be cheaper if the question was what car to buy today, He has already eaten most of the cars's depreciation, so selling now is just plain stupid. I gather OP is trying to keep his HOV sticker, AND he saves $100's of dollars in gas monthly.
I'm not saying the car isn't reliable. I'm saying he'll have to replace the very expensive battery (and related components) in a few years. Does he actually save $100's per month? Is there any evidence of that? I don't live in California so I don't even spend $100 per month in gas, but I find it hard to believe that he saves $200+ per month.
FattestWallet
Ancient Member
posted: Feb. 2, 2010 @ 11:55a
caterpillar123 said: walletlessesque said: "Also, since it's a hybrid, it's going to be expensive to repair after the warranty is up. The $3k-5k batteries only last 80k-100k miles apparently. Once you actually do pay it off, you'll want to get rid of it."
Hogwash. The Prius is one of *the* most reliable cars on the market today. While a beater would be cheaper if the question was what car to buy today, He has already eaten most of the cars's depreciation, so selling now is just plain stupid. I gather OP is trying to keep his HOV sticker, AND he saves $100's of dollars in gas monthly.
I'm not saying the car isn't reliable. I'm saying he'll have to replace the very expensive battery (and related components) in a few years. Does he actually save $100's per month? Is there any evidence of that? I don't live in California so I don't even spend $100 per month in gas, but I find it hard to believe that he saves $200+ per month.
In California, the hybrid components are completely covered by Toyota for 10 years/ 150k miles, so I should be covered for a good while. As far as savings, I calculated that I saved $180/month (hard dollars) from the vehicle I traded in. That was based on gas prices at the time which were actually about 30 cents lower than what they are today.
Also, I save myself at least 1.5 hours per day by being able to drive in the HOV lanes solo. That enables me to have more time to devote to my second job and my family.
This is all what I had to take into account to keep the car. I'm planning on getting a decent tax return this month and a bonus at the end of the year that could actually allow me to nearly pay off the car, assuming I will be in a better position to meet monthly expenses.
shortspanishguy
Member
posted: Feb. 2, 2010 @ 12:15p
2005 Civic Hybrid owner here. I'm at 175k with zero issues thus far.
FattestWallet said: The $3k-5k batteries only last 80k-100k miles apparently. Once you actually do pay it off, you'll want to get rid of it. Get rid of it now and get an appropriate used car.
Also, I save myself at least 1.5 hours per day by being able to drive in the HOV lanes solo. That enables me to have more time to devote to my second job and my family.
45 minutes just because you use the HOV lanes .. i know cali is screwed up but that is ridiculous.
"I'm not saying the car isn't reliable. I'm saying he'll have to replace the very expensive battery" I'll say it again: you are clueless. The 10 year/150k traction battery warranty in CARB states should have been your first hint.
PriusChat.com, listing of 100,000 mile vehicles PriusChat.com, listing of 200,000 mile vehicles BC Prius Taxi ExperienceNorth America's Highest Mileage Hybrid Taxis Consumers often have concerns about new vehicle technologies, especially about features that may be costly to repair, such as a hybrid system. Canada’s highest mileage Prius, a 2001 model, has operated for over 410,000 kilometres with only a few maintenance repair issues. Jatinder Parhar, owner of a Empress Taxi in Victoria, British Columbia, operates this vehicle.
North America's first hybrid taxi was a 2001 Toyota Prius operated by Andrew Grant in Vancouver, British Columbia. Grant's 2001 Yellow Taxi Prius travelled over 332,000 km before it was replaced with a 2003 Prius. Grant now operates a 2004 Prius Taxi. View the 2001 and 2004 Yellow Taxi Prius’ detailed service and maintenance records.This webpage is old. A slew of taxis have reached 250,000 *miles*, and are then sold. I don't know of any that have had the traction battery replaced.
Moreover, for the handful of G2 Prius owners who do in fact end up replacing the traction battery, lightly used batteries are available on secondary markets like eBay for about $500 - $750. They are this cheap, because the supply from cars involved in accidents vastly exceeds the demand.
FattestWallet
Ancient Member
posted: Feb. 2, 2010 @ 3:41p
owenscott said: Also, I save myself at least 1.5 hours per day by being able to drive in the HOV lanes solo. That enables me to have more time to devote to my second job and my family.
45 minutes just because you use the HOV lanes .. i know cali is screwed up but that is ridiculous.
Yes, my daily commute used to be a 1.5 hours to work and 1 hour home. Now it is 25 minutes each way. It's funny because most people are just used to it here that we don't even know what life without traffic is like.
FattestWallet said: In California, the hybrid components are completely covered by Toyota for 10 years/ 150k miles, so I should be covered for a good while. As far as savings, I calculated that I saved $180/month (hard dollars) from the vehicle I traded in. That was based on gas prices at the time which were actually about 30 cents lower than what they are today.
That's good about the 10 year warranty. If you want to keep the car, then I would suggest attempting to pay it off early at least. It never hurts to save some money.
FattestWallet
Ancient Member
posted: Feb. 10, 2010 @ 3:14p
Just wanted to post a quick update since so many here have given some great advice and many of my prayers have been answered already. It's an amazing feeling to go from such despair to seeing some light at the end of the tunnel.
1. Sold Car #2 to Carmax and actually profitted about $2700. Cash went towards making mortgage payment and paying some utilities and Car #1 payment early.
2. Finally heard back from PenFed on their hardship offer for me and my wife and I must say it is a great one. They are taking down our 5.25% rate on our mortgage down to 3.875% until 06/2013. That will save us $494/month on our mortgage which will really help a ton.
3. They also offered to extend Car #1 loan out (without raising the 5.49% rate) so that my payments would drop down to $274/month. I still plan on paying it off early but at least it gives us some breathing room on months we need it.
4. Stopped paying CC #1 - #4 this month. This was the toughest choice to make but I finally realized that it was that or we lose our home. I'm preparing to file bankruptcy if I need to but I'm taking things one month at a time. The calls have already begun but at this point they are just the "friendly reminders".
So here is an updated breakdown of our monthly payables:
Mortgage - $2450 (Prev. $2950) Car #1 - $275 (Prev. $540) Car #2 - Sold (Prev. $375) CC #1 - Default (Prev. $400) CC #2 - Default (Prev. $450) CC #3 - Default (Prev. $300) CC #4 - Default (Prev. $100) CC #5 - $25 (Same) Utilities/Cell/Internet - $350 (Same)
Our total is now down to $3100 from $5490! It's such great timing too because I will need to take some time off from my second job after my wife's surgery at the end of this month. They knew about it before they offered me the position so it is okay with them, just going to take the income down a bit. Once we get settled into the new budget, we're going to try and pay off Car #1 and put some money away for savings. If we file BK later this year, we should still be okay because CA gives us $21k in exemptions in addition to a few thousand for a car. I'm sure we won't have that much cash saved up but with the car it could get close.
So good to finally feel like I'm getting back in control of things and not just in a downward spiral. Thank you guys and thank God!
EggplantWizard
Dismembered Member
posted: Feb. 10, 2010 @ 4:51p
Don't forget that you might be able to settle with your CC issuers for 30-35% on the dollar after a few months rather than filing BK. glad things are looking up.
Why do you want to keep a house when you owe $40,000 more than it's worth? Plus it will likely lose more value when government subsidizes expire. Your credit is done either way.
FattestWallet
Ancient Member
posted: Feb. 10, 2010 @ 7:07p
We've put a lot of blood, sweat and tears into this house so most of it is based on sentiment. But $40k on a $400k home is only 10%, it sounds like a lot but really it isn't. At it's peak our home was worth well over $600k so I have no doubt that we'll pick up that 10% in the next 3-5 years.
The way we see it, my wife is sick and we have three kids. If we can keep the house and not have to have one more traumatic experience then we're going to do what we can to avoid it.
Not to mention, if we rent for a few years and save some money, eventually we'll want to buy again but by that time our credit will be toast. That would mean higher interest and less house for the money. Right now, we have the perfect little 3br/2ba house exactly how we want it. Plus with them lowering the interest rate, it's going to save us money and make it less enticing to walk away from the house and rent a dump in the ghetto for $1400/month.
ptiemann
Senior Member
posted: Feb. 11, 2010 @ 1:31a
brettdoyle said: Why do you want to keep a house when you owe $40,000 more than it's worth? Plus it will likely lose more value when government subsidizes expire. Your credit is done either way.
Seems to me that you don't really want to give him advice to better his situation but you want to influence him in a way that suits your economic-political agenda.. sorry, I had to red that
jdogg99
Member
posted: Feb. 11, 2010 @ 6:55a
FattestWallet said: But $40k on a $400k home is only 10%, it sounds like a lot but really it isn't. At it's peak our home was worth well over $600k so I have no doubt that we'll pick up that 10% in the next 3-5 years.
I can understand your sentiment to keep the house, and I know this has been hashed to death, but $40k is a LOT of money. You're paying $2450/mo to stay there--you can surely rent a very nice place for less than that. Hanging on to the house and assuming 10% appreciation will probably not turn out well for you...
FattestWallet said: We've put a lot of blood, sweat and tears into this house so most of it is based on sentiment. But $40k on a $400k home is only 10%, it sounds like a lot but really it isn't. At it's peak our home was worth well over $600k so I have no doubt that we'll pick up that 10% in the next 3-5 years.
The way we see it, my wife is sick and we have three kids. If we can keep the house and not have to have one more traumatic experience then we're going to do what we can to avoid it.
Not to mention, if we rent for a few years and save some money, eventually we'll want to buy again but by that time our credit will be toast. That would mean higher interest and less house for the money. Right now, we have the perfect little 3br/2ba house exactly how we want it. Plus with them lowering the interest rate, it's going to save us money and make it less enticing to walk away from the house and rent a dump in the ghetto for $1400/month.
I can understand with a wife that is going thru surgery again , she has enough to deal with . She doesn't need the burden of having to try and move and helping kids with new schools, friends etc. Being ill take all your strength just to kep going at times. God bless you and your family.
EggplantWizard said: Don't forget that you might be able to settle with your CC issuers for 30-35% on the dollar after a few months rather than filing BK. glad things are looking up. +1
settle with CC issuers. take the hit and move on. the sooner you do this, the sooner the derogs will age on your report and not matter as much.
Not to mention, if we rent for a few years and save some money, eventually we'll want to buy again but by that time our credit will be toast.
I am not with the crowd that wants you to lose the house too ... if you want to stay there it will be ok .... doesnt mater how much you owe if you stay real long term. (yes nitpickers i know it does matter but he owns it and likes it).
As far as another mortgage ... If you do want to ditch the house and BK it, i heard and dont have anything to back it up but i think i heard it here ... FHA will do a new mortgage after three years away from bankruptcy with a credit score of like 580 or something. So there is that option to.
PS im in florida, my house is worth less than whats owed but we arent moving either.
Majestica
Member
posted: Feb. 13, 2010 @ 2:05p
I heard bankruptcy law is not as attractive as many years ago. I think you should take a realistic look. You only have two or three options at this point: 1) sell the house, take a loss, rebuild a new life (still owe the bank 200 to 300K) 2) rent the house (400K worth? who would rent this on a long term? unless you are in NYC or California), live on the street or the back yard or 3) do something to the house and blame people for it.
Either way, you have to use the house, or invent new ways of usage so that the house worth it value.
jdogg99 said: FattestWallet said: But $40k on a $400k home is only 10%, it sounds like a lot but really it isn't. At it's peak our home was worth well over $600k so I have no doubt that we'll pick up that 10% in the next 3-5 years.
I can understand your sentiment to keep the house, and I know this has been hashed to death, but $40k is a LOT of money. You're paying $2450/mo to stay there--you can surely rent a very nice place for less than that. Hanging on to the house and assuming 10% appreciation will probably not turn out well for you... 3 bedroom houses rent for about $2200/mo on average in that location.
ptiemann said: brettdoyle said: Why do you want to keep a house when you owe $40,000 more than it's worth? Plus it will likely lose more value when government subsidizes expire. Your credit is done either way.
Seems to me that you don't really want to give him advice to better his situation but you want to influence him in a way that suits your economic-political agenda.. sorry, I had to red that
I'm not sure why you say I don't really want to give him advice -- you can find my advice on page two. The smartest thing he can do is walk away from his $40,000 underwater home. The housing market has not reached it's equilibrium price yet due to government interference. There is lots of unsustainable government support giving the market false signals and proping up home prices right now, and when it goes away prices will fall. I would suspect that house will be further underwater.
It might make sense to keep paying on a home that's $40,000 underwater if you think it's worth preserving your credit score and interest rates of future borrowing. OP is going nuclear and not paying his bills, so his credit is going to be trashed regardless and thus it makes no sense to keep paying the mortgage.
Additionally, it is even worse than that because EVEN IF YOU THINK paying the mortgage somehow makes sense he can't really afford it -- the mortgage modification is only temporary for a few months.
Do you have any valuable debate to add to this discussion? I don't support any political parties in this country... I think they're both bad. Anyone can post accusing someone of having an "economic-political agenda" without any support for such a claim. Some views, facts or logic that add value are much preferable.
bret doyle said: the mortgage modification is only temporary for a few months.
You say these things is why ppl accuse you of favoring one side or the other ... some mortgage mods get done for a long time ... years even (40%??). Why would you even say this kind of thing?
... and just because the house is no longer worth others would pay for it .... why must he, according to you, get rid of it. You think a generational farm house where the whole family was born might be worth more to the owners than what somebody else would pay?
Other people cannot set a value on something for you ... only you can do that.
jdogg99
Member
posted: Feb. 14, 2010 @ 9:02a
riznick said: jdogg99 said: FattestWallet said: But $40k on a $400k home is only 10%, it sounds like a lot but really it isn't. At it's peak our home was worth well over $600k so I have no doubt that we'll pick up that 10% in the next 3-5 years.
I can understand your sentiment to keep the house, and I know this has been hashed to death, but $40k is a LOT of money. You're paying $2450/mo to stay there--you can surely rent a very nice place for less than that. Hanging on to the house and assuming 10% appreciation will probably not turn out well for you... 3 bedroom houses rent for about $2200/mo on average in that location.
So an extra $250/month in savings to walk away, and no worries about future losses in the house. Also, he could stay in his home until they kick him out--could save up to 9 months of rent/mortgage = $22050.
ifyouhavetoask
Senior Member - 1K
posted: Feb. 14, 2010 @ 9:37a
owenscott said: I heard bankruptcy law is not as attractive as many years ago.
Its still very effective and it looks like OP would qualify with is income and out go.I agree.
There is a great deal of fear mongering about the 2005 bankruptcy law. Much of that fear mongering is done by bankers who want consumers to think there is no way out, other than full repayment.
Bankruptcy really hasn't changed much, at least for those who are truly in more debt than they can repay.
The only difference a pre and post 2005 filer would notice is that they now have to take on online credit counseling course. Big deal.
ifyouhavetoask said: owenscott said: I heard bankruptcy law is not as attractive as many years ago.
Its still very effective and it looks like OP would qualify with is income and out go.I agree.
There is a great deal of fear mongering about the 2005 bankruptcy law. Much of that fear mongering is done by bankers who want consumers to think there is no way out, other than full repayment.
Bankruptcy really hasn't changed much, at least for those who are truly in more debt than they can repay.
The only difference a pre and post 2005 filer would notice is that they now have to take on online credit counseling course. Big deal.
IYHTA there is also a more restrictive means test but that varies by location on how much you can make. If you make what OP makes and have debts like op then i think he qualifies.
Also Jdogg99 he will also lose out on any appreciation on the house. Which i assume will eventually happen again. Neither of us have a crystal ball. Plus moving plus finding a place to rent when he has bad credit plus a lot of other things. The 9 month thing isn't guaranteed as far as i know.
jdogg99 said: riznick said: jdogg99 said: FattestWallet said: But $40k on a $400k home is only 10%, it sounds like a lot but really it isn't. At it's peak our home was worth well over $600k so I have no doubt that we'll pick up that 10% in the next 3-5 years.
I can understand your sentiment to keep the house, and I know this has been hashed to death, but $40k is a LOT of money. You're paying $2450/mo to stay there--you can surely rent a very nice place for less than that. Hanging on to the house and assuming 10% appreciation will probably not turn out well for you... 3 bedroom houses rent for about $2200/mo on average in that location.
So an extra $250/month in savings to walk away, and no worries about future losses in the house. Also, he could stay in his home until they kick him out--could save up to 9 months of rent/mortgage = $22050. Something also to consider. Waiting for prices to rise 10% more and then selling the home is probably not an option. If he sells the home, he would have to report the $200,000+ he gained in value on the home before he did the refi's + additional loans. I wonder what he would have to report if he walks away. Would bankruptcy remove his tax obligations on the gains he made?
ifyouhavetoask
Senior Member - 1K
posted: Feb. 14, 2010 @ 7:47p
owenscott said:
IYHTA there is also a more restrictive means test but that varies by location on how much you can make. If you make what OP makes and have debts like op then i think he qualifies.
Also Jdogg99 he will also lose out on any appreciation on the house. Which i assume will eventually happen again. Neither of us have a crystal ball. Plus moving plus finding a place to rent when he has bad credit plus a lot of other things. The 9 month thing isn't guaranteed as far as i know.Yeah, yeah, yeah... I know
I was a BK attorney long before there was PACER and all that fancy stuff
For the vast, vast majority of filers, the means test is... meaningless
If you are truly broke, and cannot pay your bills, don't let the 2005 rules changes deter you. Seek relief and move on with your life.
A GOOD bankruptcy attorney will be able to paint a picture of you that will easily sail past even the most annoying trustees.
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