Retired From the Navy and Now Can’t Sleep Because of Our Debt. – Elio

“Dear Steve,

I am so glad to have come across your website. I am presently in a situation for which I need help. I have recently retired from the Navy. Unfortunately my income has dropped by approximately 70% and my expenditures have increased, i.e. monthly co payment/deductibles for Health/Dental insurance. I thought I could manage all my obligations as soon as I would secure a job, but after 5 months of searching and applying I am still unemployed.

Here is my situation; I am over 50 years old and according to you I should not be in this position where I am without retirement savings. My wife and I have a combined debt of approximately $45,000 plus $2000 mortgage, car payment of $400 and a student loan, which I was told could not be included in any debt relief/bankruptcy program. My present income is $3000 retirement and my wife’s $1600 monthly income. Needless to say that the three of, including my son, are in deep trouble. Please help us do the right thing.

1. Would bankruptcy be the best choice for us?
2. Is there a way to include my student loan in a bankruptcy filing?
3. would my insurance company (house/car) drop me if I file for bankruptcy?

Please respond fast…we are loosing sleep. Thank you

Elio”

Don’t miss our free Get Out of Debt – “How To” Guide Series on a number of topics, for loads of practical advice, tips, and help to beat back debt. – Click Here

The Answer

Dear Elio,

Thanks for serving in the Navy. You rock.

Welcome to the outside world. Sometimes it really sucks.

I’m not sure if bankruptcy is the right choice for you and neither are you at this point. The reality is that it just might be the best solution for you.

But before we get ahead of ourselves there is some homework I’m going to assign you and then I want you to come back and update me in the comments below about what you learn from your homework below.

I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.

Then use the free How to Get Out of Debt Calculator to review your options.

Once you’ve identified a company you want to work with, then follow my step-by-step guide on what you should look for and expect from a good debt relief company.

1. Would bankruptcy be the best choice for us?

Might just be.

2. Is there a way to include my student loan in a bankruptcy filing?

It can be done. See How to Really Discharge Your Student Loans in Bankruptcy. Many Can. But Never Try.

3. Would my insurance company (house/car) drop me if I file for bankruptcy?

No, but your rates might go up because your credit score drops in the short term. But it’s going to drop anyway if you don’t take action.

It’s time to address the debt, put the financial stress behind you and focus your energies on finding employment.

Bankruptcy Articles and Posts You Must Read

To get ready to read the information below with the right frame of mind, please first read How Do I Get Out of Debt Quickly? Change Your Mindset.

Bankruptcy Advice

Life After Bankruptcy

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

Retired From the Navy and Now Cant Sleep Because of Our Debt. Elio
Get Out of Debt Guy – Twitter, G+, Facebook

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

FREE – How to Get Out of Debt Guides

Below you will find many of free guides and articles that address specific issues about debt and getting out of debt. But before you head off to those posts I’d like to invite you to read How Do I Get Out of Debt Quickly? Change Your Mindset. It is a very important post that addresses how to have the right mindset to best tackle your situation.

Important General Get Out of Debt Advice

Bankruptcy Articles and Posts You Must Read

To get ready to read the information below with the right frame of mind, please first read How Do I Get Out of Debt Quickly? Change Your Mindset.

Bankruptcy Advice

Life After Bankruptcy

Budgets and Budgeting

Calculators and Tests

Credit Counseling

Credit Score / Credit Repair Advice

Debt Collector Help

Debt Consolidation Loans

Debt Relief Program Issues or Problems

Debt Settlement Advice

Identity Theft Advice

Life After Debt

Mortgage Help

Be sure to first read How Not to Get Scammed by a Mortgage Loan Modification Company.

Debt-to-Income Calculator

First you’ll need to determine your current debt-to-income ratio. The target debt-to-income ratio under the Home Affordable Modification program is 31%. Use this free online DTI calculator.

Mortgage Modification Calculator

The mortgage modification eligibility calculator will ask you several questions and then show you which programs you may be eligible for.

The free mortgage modification calculator can be found here.

Free Mortgage Modification Help and Counseling

If you have questions about the process or eligibility you can call 888-995-4673 and get connected with an mortgage modification adviser for free. This help is provided by government subsidized HUD Housing Counselors and they can be a big help in navigating the modification process.

In order to assist you, the housing expert will need to gather some information from you. Have the following documents handy:

  • Information about your first mortgage, such as your monthly mortgage statement.
  • Information about any second mortgage or home equity line of credit on the house.
  • Information about the monthly gross (before tax) income of all household members contributing to pay the mortgage, including recent pay stubs if you receive them or documentation of income you receive from other sources.
  • Information about your savings and other assets.
  • Account balances and minimum monthly payments due on all of your credit cards.
  • Account balances and monthly payments on all your other debts such as student loans and car loans.
  • Your most recent income tax return.
  • It may also be helpful to have: A letter describing any circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.), if applicable.

You can also get free help and housing counseling from a local HUD approved counselor. You can find your local free housing counselor, here.

Contact Your Mortgage Company

Not sure if your mortgage company offers modification programs? Not all do. You can contact your mortgage company to ask them about mortgage modification programs you might be eligible for. Click here to find your mortgage company.

NPV Calculator

Want to know the net present value (NPV) of your home for the mortgage modification process? No problem, use the free NPV calculator to find out. The NPV calculator is right here.

The calculator can be used by homeowners who have been denied a HAMP modification because of their NPV result or can also be used by homeowners prior to applying for a HAMP modification to help them better understand the NPV evaluation.

No Advance Fees

The Federal Trade Commission has a Mortgage Assistance Relief Services Rule which prohibits advance fees for mortgage rescue services or mortgage modification help.

Repossession Advice

Saving Money

Student Loan Resources

You can use the following student loan resources to help reorganize, discharge or forgive your student loan payments.

The Overall Guide to Dealing With Student Loan Debt

Discharge Your Student Loans in Bankruptcy

Student Loan Forgiveness and Discharge Information

Student Loan Consolidation Information

Specific Federal Student Loan Repayment Program Information

Maybe College Isn’t the Answer

Retired From the Navy and Now Cant Sleep Because of Our Debt. Elio
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