responsible borrower vs. responsible parent?

[justamama]

That's the dilemma I feel that DP and I are facing. We are in over our heads. There are two ways (as far as we can tell) to getting out of the situation we've put ourselves into.
One involves giving back two of our vehicles (motorcycle and a car that is collateral on a personal loan), ruining our credit in the process, and starting over paying for the one car we'd have left, a clunker we can pay for out of pocket, and our credit cards.
The other would be DP getting a second job, myself working as many hours as I can while also attending school, and slowly but surely paying everything back (in this scenario, we'd also be trying to sell the motorcycle, but will have to keep in mind that they aren't selling very fast in our area...neither are the cars; we've had both for sale in the past with no luck). This, from a consumer/borrower standpoint would be the responsible thing to do. We both know this. But, it would also mean that we would never see each other and our children would basically only see us when it's time to go to bed.

So, how do we decide which road to take? Obviously if the choice was blatantly between our children or our debts, we'd pick our kids. But this isn't as clear cut. Because as things get paid off we can cut back on hours and see more of our kids. So it's temporary. I feel very torn about it and DP just isn't good at talking about these things.

[kirstenb]

This is a hard call to make. I think what I would do is take the second job, try to pay off the debts as quickly as I could, and try to sell the bike. For that matter, I would try to sell whatever I could to get some extra money to put towards the bills. I would do this knowing that it would be for the short term. If it ended up being longer than I anticipated, or having negative repercussions for my family, I would reevaluate.

I will say I have a fear of ruining my credit, and that would play into my decision too.

[laohaire]

I would work to settle the debt.

[sillygrl]

Knowing that it would be temporary, and even more so with a lot of discipline and cutting back, I'd work on settling the debt. And, if you see that it's just going to work, then reevaluate.

I'm surprised you had trouble selling the bike. At the beginning of summer this year, lots of people were buying them because they save on gas. At least, that's why my husband bought his.

[llamalluv]

I'm surprised that motorcycles aren't selling well with the price of gasoline as it is.

[TiredX2]

Honestly, first I would post all my debt (including percentage rates) AND your costs here,at Women In Red (on msn) and Your Money (on msn). A lot of times different eyes looking can come up with a solution you may never have thought of.

Your Money
http://moneycentral.msn.com/communit...oard=YourMoney

Women In Red
http://moneycentral.msn.com/communit...ard=WomeninRed

Originally Posted by sillygrl

I'm surprised you had trouble selling the bike. At the beginning of summer this year, lots of people were buying them because they save on gas. At least, that's why my husband bought his.

Originally Posted by llamalluv

I'm surprised that motorcycles aren't selling well with the price of gasoline as it is.

I am not surprised. Yes, lots more people are buying but LOTS more people are in need of some fast cash. In our area, at least, motorcycles are "toys" (PNW, most people dont' ride year round so they generally have a car as well) and expensive ones at that. It is one of the first things to be obvious to sell w/little to no lifestyle change.

[sillygrl]

I hadn't even put 2+2 together. Yeh, I can see them not being as useful up there as here in Kansas.

[bobandjess99]

what are you going to school for? How much longer do you have and how much will you make when you are done?
If you are like...in the last stages of a nursing degree and willl be able to make serious money when you finish in May, for example, I'd probably just try to put things off, pay what you can to keep the bills going, and then get a full time job when you graduate.

However, if you are in school at the beginning stages, or for a degree that does not have an easily attainable job at the end, etc, I would probably leave school for a semester or two to work full time+ in order to pay off the bills. If you have already paid for this semester, I assume, I would take next semester off. If you can work opposite your dh in order to pay out nothing/little in childcare, a full time second job, when you are used to being a student or 1 income family, can seem like a huge amount of money and pay down those debts fast.
even a bottom-rung job at like mcDonalds, at minimum wage 35 hours per week, is like $1000/month, after taxes more like $800, but even 6 months is $4800, so in one semester off, you could make that much towards your bills....a full 12 months is nearly $10,000.

anyway...giving back the car might be a good idea, might not...to be able to give better info, we'd need more precise info, btu you might not be comfortabel sharing, and that is fine....when you say credit cards....are we talking about $1000, $5000, or $20,000 in debt there?

In general, if you're not making it, you need to increase income, decrease spending, or both.....

[pixiewytch]

I agree that it depends on how temporary this situation would be. I think this is an extremely personal decision as it should be so I don't think there is a wrong or right choice.

For me personally, I left my job and some old credit card debt (one repo car) to stay home with my children and I don't for one minute second guess that decision. For me, the debt is already past the statute of limitations now and anything DH and I had accumulated we paid as we could and when we could....but I knew that sticking my babies in day care just so I could pay back big corporations was not for me. I know that really sounds like shirking personal responsibility to some but sometimes you have to make tough choices and for me, being there for my babies was more important than lining the pockets of already rich banks who don't even know who I am.

Even though much of that wasn't paid back, I did learn my lesson because I don't have debt now. I live simply with one crappy car, once again, to stay home with my kids. We don't run up credit to keep up with the joneses.

I say go with your gut on this one. Again, if it is a short term situation it may be worth it but if it looks like a long road ahead, you may want to reconsider what is most important for your family.

[justamama]

Thanks for all of the responses, ladies.

Our finance situation is as follows:
DH's income- $2100
My (expected) income from my new job- $400

Mortgage- $681

Car Payment- $302 (this was refinanced from $352, refinancing again isn't an option, $16k balance)

Motorcycle Payment- $186 ($7200 balance)

Personal Loan- $245 (2nd car is collateral, $4800 balance)

Insurance (all 3 vehicles, full coverage)- $150 (our credit scores won't let us get a lower rate)

Credit Cards- $238 (minimums, $5295 total balances)

Utilities (gas, water, electric, cell phones on lowest plan)- $315

Daycare- $200

Food/Gas for cars- $550 ($350 for food, $200 for gas)


We also need to get on a $50/month payment plan for taxes that we owe the state from last year, but we haven't had the chance. And we owe my ILs $900 as well.

[sillygrl]

Hrmm.... sorry mama, but from what it looks like, you wouldn't be bringing in really all that much more $$, with half of your income going straight to daycare, and then deciding how much goes to gas for you to get the kids there and get yourself to work. Is that the best you can find for income? Looking at that, what do you think you could cut back on?

Sorry, I'm not great with finances

[msjd123]

Originally Posted by sillygrl

Hrmm.... sorry mama, but from what it looks like, you wouldn't be bringing in really all that much more $$, with half of your income going straight to daycare, and then deciding how much goes to gas for you to get the kids there and get yourself to work. Is that the best you can find for income? Looking at that, what do you think you could cut back on?

Sorry, I'm not great with finances

I agree. Are you getting a BA? I can't fathom shelling out megabucks for a degree that will lead only to a $400/month job.

The only thing that jumps out at me are the cars. I'd see if you can get it down to just two vehicles. If that's not possible, at least file PNO (planned non-operation) for one of them and let your insurance company know that it isn't being driven at all. That should reduce your expenses a little.

[justamama]

Can you file PNO for a car with a loan on it? If so, that's definitely a good option that we will be looking into for sure!

The job is just a part-time retail. I am just starting a 9 (18, since I'm going part-time in order to continue working) month diploma program. After I'm done I should be able to make in the $15+/hr range. More if I work independently. I will be in school 8 hrs/week, with little-to-no homework the first 3 months since the course is all hands on.

[bobandjess99]

Wow. I'm sorry, this one has just hit me hard. Your income and mortgage are basically exactly ours. The rest of the payments are so different though, showing the differences in our choices. I'm not trying to be critical or anything, it's just seeing it in black and white..the situation we *could* be in if we hadn't made the choices we did...it just really brings it home to me. and please know, I'm not saying "I'm good and you're bad" or anything like that, it is just so scary to me to see how very EASILY we (anyone!) could get into a bad financial situation....it nearly has me in tears.

[sillygrl]

One thing to think about is: could you guys possibly survive by you going to school full time instead of part time? That would get you into a higher-paying job faster. We lived on $1200/mo for a while so that my SO could finish school quickly and get into a good job. It was NOT easy, in fact, it was terrible, but the bad was just temporary. Granted, we did not have car payments and paid the absolute minimum for insurance and had no loans, but $1200/mo for a family of five is extremely difficult.

Just throwing out some ideas for you.

[justamama]

Originally Posted by bobandjess99

Wow. I'm sorry, this one has just hit me hard. Your income and mortgage are basically exactly ours. The rest of the payments are so different though, showing the differences in our choices. I'm not trying to be critical or anything, it's just seeing it in black and white..the situation we *could* be in if we hadn't made the choices we did...it just really brings it home to me. and please know, I'm not saying "I'm good and you're bad" or anything like that, it is just so scary to me to see how very EASILY we (anyone!) could get into a bad financial situation....it nearly has me in tears.

No, I understand exactly where you're coming from. Our COL increased dramatically because we bought a house. Before that, our monthly living expenses were $300/month (we had a small apt with utilities included). We hadn't anticipated moving, so that's why we were okay having a motorcycle and newer car at the same time. When we found out we'd have to move, there wasn't anything around us that was even close to the price we were paying and buying was the cheapest option. I don't regret it for a second; we love our house. But, our choices would definitely have been different if we'd known the situation we'd be thrust into just a few short months later.

[justamama]

Originally Posted by sillygrl

One thing to think about is: could you guys possibly survive by you going to school full time instead of part time? That would get you into a higher-paying job faster. We lived on $1200/mo for a while so that my SO could finish school quickly and get into a good job. It was NOT easy, in fact, it was terrible, but the bad was just temporary. Granted, we did not have car payments and paid the absolute minimum for insurance and had no loans, but $1200/mo for a family of five is extremely difficult.

Just throwing out some ideas for you.

I am going to go to school part-time; just 8 hours/week.

The one thing I've been forgetting is that the estimate of my income is with the minimum number of hours I can get in a week. For training and such they said I would only get around 15 hrs/week. That's what I used for estimating the monthly income. Closer to the holidays, I can get 30+ hrs/week, essentially doubling my income during that time.

[justamama]

I think we're going to not pay our credit card bills (for now!). Doing that will allow us to keep both vehicles, which we need, and make all of our other payments as well. We'll call the CC companies, explain our situation, and see if they can work with us; lowering our minimum payments, for example. Any extra money we get from things like Christmas money, extra shifts either of us can pick up, selling things, and doing odd jobs will go straight to the credit cards. Same for our tax return. It's not the solution I want, but it's the best we have for now. Of course, the solution I want would require me to spend money on lottery tickets, which isn't happening anytime in the forseeable future.

[Jilian]

Not paying your cc's is going to hurt your credit and the interest will just keep accumulating. You can try calling the cc's and asking for a month or two "off" but most will probably say no. If you are going to take a hit on your credit then I suggest letting the car go. Sell everything and anything you can to pay down that cc debt to free up some more money monthly. Come visit us over at the Dave Ramsey thread! There are some smart mamas over there who might be able to help.

[justamama]

I put an ad on CL this morning saying I was willing to clean homes for $9/hr on my days off from school/work. I got a reply tonight from a woman who wants me to clean her house six hours/week! I am emailing her back tonight to set up a time to meet with her. At $54/week, that would have us $151/month short from paying everything. Between cutting our expenses, me getting as many hours as I can, and DP's bonuses (based on customer service scores and store business; the amount we have figured into our monthly budget is the least amount its ever been in one month, normally it's more than that), I think we'll just be able to pay everything. Our daycare budget is flexible as well, since it's family.