Too Much Debt, Not Enough Money

[krielly]

I have to be honest. My gut reaction is that you are trying to solve a debt/income ratio problem by accumulating even more debt. Not a good solution. You might find some extra cash to tie you over right now for repairs/etc.....but you will only be putting a bandaid on the problem...until the NEXT unexpected expense, and there's always a NEXT one.

As painful as it is, I think you need to take a look at how you can possibly continue to sustain the financial support of your mom. You don't say if this is a short term issue for your mom, or if this is going to continue indefinitely.

JMHO! I admire what you are doing, don't get me wrong, but you are running negative each month as a result and putting yourself into a deeper hole all the time.....Sorry for what you are going through!

K

[sekada]

Thanks ^
I think I wasn't really clear to begin with bc I've thought about it so much I forget about the details.
The health probs are *as far as I know* temporary. That said, mom is aging so anything could happen.
Financial deficit: first off, I get a combined tax return/bonus of around $7k-$10k every March. Historically I've used that as a combo of debt pmt/savings. The prob is that this year, I've already blown thru savings on repairs for homes and the rehab fee for mom, which she really needs to avoid future problems. So if I can make it to March 2016, I should be in ok shape. It's getting thru this year that has me stumped.
The other stumping thing is my house, which I would LOVE to solve. I'm constantly scouting for cheaper places that are in good shape, but the fact is that with my recent refi and a low rate, my payments would probably soar. Plus, there would be the prob of selling the house, paying for a move, and coming up with a down payment. My house is 30 and it feels like everything is going wrong at once. I know that if I can get thru it, I will have a nice-ish house - but that is a huge if.


Everyone will freak out about this, but I'm gonna be honest: losing my mom's home is not an option. I worked like crazy for 20 years to get it, it's her heaven on earth, it costs me about $1k/month and my mom is a living saint who spent her own retirement taking care of me when my dad left. I would only do that if she needed assisted living.
One nuclear option would be selling my house as-is, and moving into an apt with a roomie. Nobody I know is looking atm but I guess Craigslist is one option.

Now that mom seems better, I'm going to try and pick up extra freelance work in a couple of weeks, besides the OT. But I have no idea how much I will make or how fast.

I also am very against new debt, for obvious reasons. And I really don't want another 401k loan either. If I can make it until March 2016 my available loan amount will almost double, and combined with bonus/tax return I can fix up my house and replenish savings.
You asked about the "deficit." It's mostly due to high CC payments; if I can get back to paying principal down, that would help. Again, the trick is doing that. My FICO is 703, not awful but not stellar; I'm debating whether to see if I can get a good high-limit CC to xfer balances to with no interest pmts for awhile (not sure I can get approved for enough to be worthwhile), or if I should use my decent score to go HELOC and use the money to pay off one CC (nervous about over-leveraging even more but would save me maybe $350-$400/month net) or if I should go ahead and do 401k loan, pay off 1/2 a credit card and save the rest (would raise my credit score for possible future HELOC if further disaster strikes, but again I would be leaving thousands on the table, unable to borrow further from retirement for 4 years).

[sekada]

Re mom's house, it is now in very good shape and I think the value will start going up soon. She's in a neighborhood where very pricey houses are now being built so the comps should rise now that the Econ is finally starting to recover there. Mom is in a condo so can't sell to developers, but it doesn't hurt that those expensive homes are popping all around her. In addition, that gives me some comfort for my retirement.. doesn't look like the property will decline in value, it is in a hot vacation area so condos do ok on rental market, so I have a good shot at a decent investment if I can hang onto it for another 10 years or so. 

[Callandra]

I'm sorry to hear about your mom's health problems and your financial troubles.

I'm not sure if anyone suggested it, but if you don't want to sell your mom's house, can you move in with her [temporarily]? I know you mentioned there are issues with your house but at this point, selling it might be a good option or if you want to stay in it, you're going to have to pick and choose your repairs (if you have multiple bathrooms, you really only need one functioning one for now). I think you have some hard decisions ahead of you -- you can try for some BT cards although with $27k in debt, even with $100k income you may not get approved and if you do, it might not have a limit high enough. I think a 401k loan isn't a bad idea at this point; the interest is lower and even if you can't contribute to it again for 5 years/'til it's paid back, it doesn't really matter as you need the money NOW. Once things get sorted, you can always go back to contributing even more when you are in that position. I don't know the interest rates on your CCs but I highly doubt they are lower than your 401k loan would be!! I used to work in payroll and I saw people take crazy high 401k loans when they needed the money. It's not the -best- option but you seem unwilling to sell your mom's house and you are strapped for cash with CC interest rates killing you. 

Good luck with whatever you choose to do.

[krielly]

I don't think you mentioned your proximity to your mom? ARe you in the same area? You don't sound to be emotionally attached to your home......have you thought about moving into your mom's home and unloading yours? Would seem to put you in a better position to get your debt paid down and open up more possibilities down the road....

[sekada]

I would love to do that. Alas my mom is 3.5h away from work. 

Looking at my numbers again to see how bad things are and if OT and quitting 401k contrib for now will be enough to squeak me thru.

[Anonymous]

I am so sorry to here about your mother. Four years ago my adult daughter became very ill. She did not qualify for state assistance so I was paying for anything not covered by her insurance. During one of her frequent hospitalizations, a wonderful nurse suggested that my daughter apply for charity through the hospital. I contacted the hospital social worker and buisness office filed out the necessary paperwork and she was immediately apporved for financial assistance. Please check with your mother's hospital for assistance. It may not be much but at this point any amount may help. Good luck.