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Our Mortgage Went Up and We Are Going Down. – Tami

“Dear Steve,

My husband works a sales job that is 100% commission. I am at home with our small children. From 2008 to 2009 he took a 100k loss in salary.

We purchased a new home in 2008 when we were making plenty of money to afford it. Knowing that the economy was going to take a hit we paid off a 10k credit card, and put 20k in the bank as savings for months he came up short.

Now 14 months later we are through our savings, have borrowed money from family, maxed out our credit cards trying to stay afloat. We refi’d one car and attempted to do the other in order to lower the payment.

Beginning this year our mortgage went up $400 because of the taxes on the new construction home being not estimated high enough.

We have finally reached the point where we will not be able to pay our mortgage next month and are not sure what to do.

We attempted to refi our home and did not quality. We contact our lender who is sending papers to do a loan modification but she told us the best chance we have to get help is to skip next months payment.

Do we do what the lender said and skip our next payment in order to get qualified for the loan modification or more help with our loan? We have 87k in our 401k but don’t want to touch that as we feel it will be throwing the money away. We have done all the right things put away money, stay current on all our debt and pay over when we can and are still struggling what should we do?

Tami”

Dear Tami,

First thing we need to do is figure out what lifestyle is sustainable for you on the current income. Once we can identify that then we can work the problem backwards to a solution.

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After you pay the new mortgage payment, how much, if any is left over for your credit card payment each month? How much current credit card debt do you have?

Bankruptcy is a legal option for you but my concern is that even without the credit card debt can you afford your house, utilities, etc?

If you can answer these questions for me in the comments section below I can give you a better opinion.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.




About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

2 Comments

  • Thank you for your response. With what my husband was making we could afford it all, now I have no idea because he is 100% commission. I am not sure how to budget when we don’t know how much he will be making each month. The lowest month he has had is 3k after taxes. I estimate with our credit cards now so high we are needing about $5300 a month for just bills. We have family offering to help us with our mortgage next month but seems pointless if something doesn’t change otherwise we will still be in this situation in March? Should we miss a month of payment in order to get a loan modification? We don’t even know what type of loan payment we would have if we DID get the loan modification. Do we need to talk with a lawyer? We have about 25k in credit cards, 40k in student loans 20k in car debt…. should we file bankrupcy? What debt is wiped clean if we do this? what can they not touch?

    • Tami,

      You really should talk to a local bankruptcy attorney and get yourself educated about what bankruptcy might mean for you. It does not sound like a good idea to borrow the money. I’d use what you’ve got to pay the mortgage and stop paying the credit cards. No sense having friends and family pour more money down a black hole with no bottom.

      The loan modification is a long-shot at best. Only about 7% of people have received meaningful loan modifications and they seem to take six to twelve months. You need a solution now.

      Steve

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