Too Much Debt, Not Enough Money

sekada · ‎06-09-2015

Can anybody identify?!

In short, I take care of my mom financially.. so I have 2 mortgages, 2 sets of utils, just 1 car pmt but 2 insurance ones, etc. I also have $27k in CC debt, some from emergency house repairs last year and the rest is balances that I've held for years & years. I had $32k debt but have paid off $5k & change in the last year and a half or so. I WAS making good progress on that, finally, after paying off my mom's car.
Then Mom got sick and my house broke.
My mom was in & out of hospital for 5 months and guess who is paying the non-insured part (about 20%). In addition, out of 2.5 bathrooms, 1 had a leaking shower, another a broken sink faucet and another a leaky toilet. My dishwasher's broken, my oven doesn't work right, my hot water heater needs replacing, and my chimney cap is rusted.
I have high income ($100k) and have been working overtime to make an extra $200-$400/mo. I've slashed expenses by $400/month more than a year ago and have nowhere else to cut. I'm only making the minimum payments on CC's. I do still contribute to my 401k, because I get a 150% match. I'm single, no kids. I refi'd my mortgage 1.5 yrs ago. I have about 22% equity in my home and pay 4.5% interest. I just had to pay $1500-ish to get my mom into a rehab center so she can build her strength up. Now I'm broke, I have a $400/month deficit (w/o overtime) and I only have money for one mortgage payment this paycheck and that will overdraw me. I will pay the other next payday with a $50 fee, but obviously this is unsustainable.
I can take $12k out of my 401k at a 4.5% rate, but that will be the only withdrawal I can make for the next 4 years. Or, I could do a withdrawal of up to $60k, but would pay tax and penalty and would be banned from contributing to my account for 5 years or until it's paid back.
Do I have ANY other options?? I have to figure something out fast, I'm out of money.

Anonymous · ‎06-09-2015

Did you look for any programs that may be able to help your mom with her medical bills? There are many government programs out there to help low income or no income people with medical bills.

As far as a leaking shower, broken faucet and leaky toilet, if this caused some type of hardship, you really need to find a new contractor or learn to do the work yourself, nothing major at all there. Chimney caps are cheap as well (I would strongly advise to hire that job out if you are not experienced in roof/chimney work)

Can you or your mother downsize homes?

merc64 · ‎06-09-2015

Need to know additional info about your mom before any real suggestions can be given. She retired, receiving social security, medicare, medicare supplement, or still employed? Also, why the two of everything? When faced with having to support my elderly father I had to move him into the house. Wasn't fun, but necessary under the circumstances. Assuming your mom is retired or even if she isn't look up your States medicaid criteria.

sekada · ‎06-09-2015

My income is too high to qualify for aid (understandably) and my mom is $15/month too rich on SS to qualify for Medicaid. I can't move her into my house unless I totally rehab it; for instance, all my bathrooms are upstairs and she can't handle stairs easily. I would also have to get rid of my pets since she has pulmonary problems. So I would have to move -- and sell both houses, one of them not in great condition. And I would probably end up spending the same amount of money on one mortgage; my house is about as cheap as it gets around here.
My gut says I will have to take the 401k loan. I wanted to wait another few months until it's $20k and rehab my house, but at this point it might be smarter to pay off one CC and use the rest as savings?
I will say that, so far, with exception of the rehab center the med bill people have been very nice. I'm making monthly payments and the only lump sum I have had to pay is for the rehab. The problem is that my monthlies are now so high.

sekada · ‎06-09-2015

^ "too rich for Medicaid" is less than $900/month in her state. That money goes to pay for her food, gas, home med equipment, incidentals and home maintenance.

Anonymous · ‎06-09-2015

Quite frankly, she can't afford her house.

sekada · ‎06-09-2015

So dansamy, what is your suggestion? Did you see where my house has bathrooms she cannot get to? I don't need to be told I can't afford my life. Read the title. I'm looking for any realistic ideas to make it affordable that do not involve raiding my retirement or leaving my mom at a bus stop.

Revelate · ‎06-09-2015

Leverage the equity (if any) in your mother's house? She brings absolutely nothing to the equation?

Wrote some stuff out but if you truly can't make it work a CH 13 might be worth investigating. Realistically one or both houses would be sold and it'd give you a chance to restructure your debts.

Do stop making the contributions to the 401K, the 150% matching doesn't do you any good when you're bleeding cash in the rest of your life outside of the retirement accounts you can't touch. 401K loan only buys breathing room, but you'd have to make non-trivial changes to bring your expenses down (one or both houses sold probably) for it to really have any benefit in my opinion.

There's worse lifes than shoring up your finances in an apartment with mom if you have to take the non-BK armageddon route.

merc64 · ‎06-10-2015

@sekada wrote:
So dansamy, what is your suggestion? Did you see where my house has bathrooms she cannot get to? I don't need to be told I can't afford my life. Read the title. I'm looking for any realistic ideas to make it affordable that do not involve raiding my retirement or leaving my mom at a bus stop.

I'm sorry to say but he gave you the realistic answer. You've got some very hard decisions coming your way. The only affordable route you have is to sell both houses or walk away from them, rent a handicap accessible home, and rebuild. Revelate also gave some very sound advice. If I was in your shoes I'd quit paying on my mom's medical bills right now. Let that stuff go into collections and look at filing for BK. I understand your position because I was almost there with both my dad and mom. They both had severe medical problems from a life of smoking before passing away.

sekada · ‎06-10-2015

Thanks everyone. I will stop 401k contribs for now and am already trying to figure out possibilities for HELOCs on one or both homes. I don't think mom's will qualify since her area is still kind of depressed and I'm not sure she's got enough equity. I think I can pull about $10k from my house if it appraises where I think it will. HELOC is looking less scary than most alternatives, at this point.