We're Going To Lose Our House This Month

Brought to you by the EveryDollar app. Start budgeting for free today. I'm 50 years old, married, uh, two kids, uh, just getting one off to college here just now. And, um, we're in a situation where leading into last year, uh, had, uh, corporate buyouts cap my pay and really cut my pay significantly. And in the process of, uh, trying to make up that income. Uh, my wife became severely ill and we're heading towards disability. So she's definitely disabled. Now we're looking at, she basically, we shouldn't, she should have been on disability years ago, but we've had trouble getting her there due to various reasons with her sickness and diagnosis and whatnot. So we've kind of made it this far trying to put bandages on everything. Uh, two credit cards maxed out. We, um, sort of foolishly took the opportunity to take, um, mortgage forbearance. We were kind of doing it at three months at a time. And through the end of the mortgage forbearance here this year, uh, they will not defer our payments. So they're, they're asking for $13,000 to keep us out of foreclosure. We weren't, we weren't aware that, uh, after six months they can't defer payments, but we're in a situation where we're going to file chapter 13 bankruptcy and restructure. But I wanted to talk to you first. Andy, I'm so sorry. It's a lot. So you have $13,000 that you're behind on your home today. Correct. And they want it by the end of the year. They want it, um, by the end of this month. Okay. So that, that's, that's a, that's a, uh, a train that's been coming down the track for a while. You've seen it coming for a while though. Absolutely. Yeah. Yeah. Okay. But now we thought it was going to be temporary. What is your home worth? Uh, spot 350, 350,000, 350. Correct. Okay. And what is the mortgage balance? What's it take to pay it off today? 150,000. Okay. And, um, what do you make now? So I just started a new job about a year and a year and a half ago. I used to be on commission. So that was always another thing too, with, um, trying to manage cashflow, but I'm on salary now at 90,000 a year. Okay. That's a good move. All right. And you, and you have two credit cards the balances on those are what? 18,000 total, total. Okay. And how much on your cars? How much do you own your car? Don't wait for the interest rate to be perfect before buying or refinancing a home. Talk to Churchill mortgage, smart buyers, buy the home they can afford now, and then refinance later. If rates improve, Churchill helps you make decisions with confidence instead of guessing. And Churchill mortgage has a webpage with special offers just for our audience. Go to churchillmortgage.com slash Ramsey offer. This is a paid advertisement One car is paid off one car. We have 8,000 on paying 278 a month for it. And, um, what are the debts? Uh, we have 2000 in medical bills. Usually that's kind of a standing number. It seems to the road. We've we've, I have an $8,000 deductible right now. In previous years, we had a $15,000 deductible that we would max out. And then I refined the house twice in the last handful of years. Why just to pay off credit cards that we had used for medical expenses, which I know is extremely foolish, but we keep thinking, you know, we thought it was temporary. You know, we kept thinking she was going to get better, you know? Okay. Um, well, the reason I'm asking all these questions is it, it's the only way I can get to your answer. Um, a chapter 13 bankruptcy, uh, takes the balances that you have and you have to pay the minimum normal payment plus something on the, uh, rearage on the car and on the house for 60 months for five years. Okay. Your unsecured debt can be paid back on a formula that they use when they're calculating it. Some percentage of the 18,000 would be reduced. So pretend like they gave up half of it. So you had $9,000 that would be in the five-year plan as well. Okay. So you're going to be in there for five years and you're going to pay every dime that you owe on the house. It's just spreads it out. It's all it does. Okay. There's no, there's no deal. There's no back of the mortgage. So that 13,000 is going to be spread out over 60 months plus your regular house payment. So in, in chapter seven bankruptcy, you're gonna have your regular house payment plus our chapter 13. You have a regular house payment plus something on this 13,000, whatever 13,000 divided by 60 is. Okay. So here's what happens that 78% of the chapter 13s in America fail. The people don't make it through the 60 months because they can't make the payments. And we already knew that because they couldn't make the payments and that's what put them here. You follow me? And so it's like when you refinance the house and didn't change anything and now you got new credit card debt after that. Okay. So because you didn't change anything, you didn't fix what the actual problem was. You just treated the symptom and that's what the bankruptcy does. So I always try to figure out a way if there's anything we can do to not file chapter 13, because it is a bankruptcy. And then for the rest of your life, if you're filling out any form anywhere that says, have you ever filed bankruptcy? Yes, I have. I filed a chapter seven in 1988. And for the rest of my life, I get to answer. Yes, I have filed bankruptcy. So I don't, I don't recommend bankruptcy. I try to figure out a way to avoid it where I can, if at all possible. So let's pretend that you paid the car payment. You got on beans and rice, rice and beans, and you work two jobs or three jobs more. And you didn't pay a dime on the credit cards and you stacked up cash. I bet you could scrape together the 13,000 before the foreclosure actually occurs. Which would be how long? Probably six months. Right. I see. Get current on that and then go work on your credit cards. Your credit is going to be damaged, but not damaged as much as if you file bankruptcy. And Andy, I'm assuming you have nothing in retirement, right? No 401ks. We emptied that years ago with her diagnosis. Yeah. What's her diagnosis? Chronic neuro Lyme disease. Oh, wow. Okay. That's been, that's been controversial in the previous years. We lost a team member to the disability. We didn't lose his life, but he lost his, lost him to disability on exactly the same thing a few years back. Oh man, that's harsh. Well, you remember, you remember the stimulus we received way back when the Biden stimulus, we spent that on a $3,000 test just to confirm whether treatments were working or not. For example, you know, out of pocket. So we're hoping that changes. We're hoping insurance gets better, but she does not have insurance right now either. When I filed, I heard my attorney say something loud and clear. And I always say it to folks is after you file bankruptcy, you're still in the exact same position you were except over the debt. So all the things that are draining your emotions, all of this medical, all the exhaustion of fighting and fighting and fighting against the system is all still there. Bankruptcy didn't fix any of that. And really that's kind of what caused you to get here. So what I would do is find out how long it takes for an attorney to do a foreclosure in your state and see if I can't scrape together the 13 by going all hands on deck before the foreclosure and avoid the bankruptcy. That's what my first goal would be. Create your free every dollar budget today. The simplest way to budget for your life.