Author Topic: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?  (Read 2900 times)

Overexplainer

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« on: October 18, 2018, 10:47:17 AM »
Edited to try and make this make more sense. If you want to see the original text, some people have quoted it.

DH (28) and I (22) have been together for 3 years. We try our best to be frugal and have been working to get through his debts from his first marriage.

TL;DR
DH divorced with child, we married, add another kid, debts remaining from divorce wawa blah blahs.

+ 500 My Land Contract Income
+ 0 to 300 Flipping Income
+ 2,230 DH Income
- 1,414 Mandatory? Expenses (Child support and Insurance biggest costs. Lots of cuts.)
- 0,151 FSA ending January
- 0,235 DH Debts not including 10k on itís way to 25% garnishment
- 0,200 Spent on fixing very cheap housing. Mostly done now.
- 0,600 Taxes. I need to fix this.

2,730 - 2,600 = 130 left over = Failure.
If they garnish 25% of DH income we are going to lose around 550 MORE.
Bankruptcy for DH?

Break down and explanation (Excuses?) below.

We considered bankruptcy for him, but we worry that itís morally wrong. Iíve been reading MMM since 2015, and heís started seeing things my way after awhile. However, we still have debts. Husband doesnít ever want to retire and doesn't even want to stop working for awhile so that I can.

DH got divorced 5 years ago. Agreed to take on debt for their basement job (5k that has ballooned to 10k), before knowing her plans. He was so distraught that he didnít do the smart thing and hire an attorney.

He didnít read through the paperwork like he should of. Thatís on him, but we canít change it now. In person she told him she would pay for the basement. She had him sign off on the house, which he agreed to so that his child could stay where she lived.

Once he moved out he used a credit card to furnish his apartment with necessities. He attempted to pay the bills with the credit card.. Eventually he hit the limit and realized he was in over his head, stopped paying everything debt related.

A few years later we met and obviously now we are married, so I think you can figure that out.

He moved into the house I owned and we decided we were going to try for kids in around 8-10 years when we knew things would be financially better. We had a happy accident and our birth control failed and I was pregnant. We are so happy to have our child, but we will admit it switched up our timing!

I had just begun a new job where I was upped to 60k a year. Then I wound up on bed rest on month 4 and was paid on company disability until it ran out. Gave birth to a healthy baby boy, and then they switched my husbandís hours to the same as mine (3rd shift).

We looked for childcare for the 6 weeks of my maternity leave with no luck and we talked and talked about it and I decided to quit my job. Our town has a population of about 260. We thought it would be okay since we had some extra after the bills and intended to figure it out later. My husband is not one who wants to sit still and even now has 0 interest in retiring ever (I believe his tune will change with age). In addition to that we were having issues with getting baby to take bottle, so it seemed like I should quit. I see now that was dumb, and there is 0 chance of me returning to that job now. It was probably the only job within 30 miles that would pay that high. Although I was the breadwinner, we somehow decided more money wasnít worth him quitting.

Since the baby, I have considered going back so many times. Yet, I have both failed to find substantial nearby employment and childcare. I applied to places a few times just to see if I could get a promising job. I thought maybe if I actually found something that my husband would be more open to talking about quitting for awhile. The 1.5 year gap in my work history has landed me with no calls even when tweaking my resume for each individual job. I think I applied to 20 so far, but I stopped for that reason. Sounds like I should start again. We considered working opposite hours, but that put a big strain on us even before our child. I'm not sure what salary to expect anymore.

We paid 9k off of his student loans and spent quite a bit of money working on the house.

We made a payment agreement with the credit card collector (5k. Since it doesnít have interest we agreed on a small payment.)

We discovered that a judgment has been entered against my husband for 10k plus 18% APR as of this month on the basement job. (We never received notice, and I feel we could have it set aside for that reason. It may be possible that notice was sent to hi ex wife. However, I feel the retrial end result will be the same anyways since he did agree to pay it back then.)

We know there is 2k in medical debt lurking and waiting for us, but we havenít done anything about it.

My husband had started a new job with higher pay and then his hours were cut, so we are in about the same place as before.

Now we found out that DS needs surgery and are hoping CHIP covers it, but are a bit confused and waiting to hear back about it. It feels like things are getting tighter.

Income

I make 500 a month in a land contract, on property in another state, with a family member.
I also make random extra money through retail arbitrage and Craigslist flipping. It can be as much as 300 a month, or more often as little as 0. I may pick up a Sunday paper route for 350 a month, but I need to crunch numbers. It would be delivering rurally where a car is required and that cuts into pay.
DH makes 14.30 an hour and can only get 36 hours a week right now, so he gets 2,230 a month, but then taxes come out too. It doesnít look like we can improve his forklift operator income. He has a degree in massage therapy, but there isnít a need for it anywhere near where we live (he got the degree a year before his ex wanted to move to this area) and his license is expired.

Savings

I have 18k in IRAís mostly from before marriage.
He has only 250 in an IRA.
We have 4.5k in an emergency fund. (Money is in my name only) We used to have more, but we decided to squish the student debt down.

Budget
For categories with *s these are our average costs over 24 months of tracking.

331 Whole family health insurance.
(Cheapest available, since his daughter and our son are both on chip anyways. DH is court ordered to hold dependent insurance for daughter or pay higher support.)
320 Child Support
(Six years more to go on that)
210 House
(Itís lot rent. We live in a mobile home. Even if we could buy a similar stick built house that appreciated we would end up with about the same amount of money in thirty years, but then we would have to sell the house to access that money.)
205 Food*
(Major fluctuations month to month due to bulk buying and canning)
151 FSA (Allows for the maximum rollover in a year. Plan to only keep as much as we can rollover in it, because we are fairly healthy.)
70 Car insurance
60 Phone
(Share a plan with Grandma, because we help with keeping track of her bills.)
55 Electric*
(12.70 of that is for Sewer, Garbage, Recycling. Plus we have to run a very long heat tape in winter until I get under the house and put the pipe in the insulated belly. I havenít done it, because we need to replumb since we have PB pipes.)
51 Internet
(Only one internet provider to chose from)
50 Heat*
(Working on weatherization. Keep thermostat at 62 and bring it up to 65 twice a day. If we go lower than that, we have pipe issues. Use passive solar, we have quilted curtains too. We only use A/C right before babyís bedtime to cool it to 78 if we couldnít get there ourselves. The company also charges other minimum fees and thereís no other competing companies.)
29 Car gas
(DH bikes to work. Two grocery trips to the city that we combine with taking DD to community college STEM group, two trips to pickup/drop off DD from her motherís home, and usually one trip for home improvement store.)
15 Water*
(We have a rainwater collection system, but we havenít replaced all of our needs)
10 DS Clothes/etc.
(He mostly gets hand me downs or gifts for all his needs. We havenít bought much, but I think we would need about that much a month if we stopped getting those things free. Cloth diapered)
8 Car Maintenance*

Debts

85 a month on 6.3k Student loan
(Thatís the minimum. We throw extra money at it frequently.)
50 a month on 5k Credit card sent to collections
(Explained above. No interest.)
2k Medical debt in collections.
(Havenít paid as we havenít had any contact about it since it was sold)
10k judgement on basement job
(Described above. Company looking to garnish.)

1,565 total
151 for FSA ending at the start of new year.
That doesnít factor taxes though. They are currently taking 600 in taxes, but my husband didnít fill out the forms right. Iím about to adjust it.
Then 135 on top of that is what we have to pay for student and credit card debt right now until garnishment starts. I believe they can garnish up to 25% for the judgement?
We have also been averaging 200 a month on home improvement for the past 24 months, but I consider that something that can stop for the most part. Nothing is breaking right now. Our hardwood floors are not sealed and stuff like that, but we have upgraded the important things like attic insulation and broken things.

2 cars, bought for cash.
One old minivan for construction, because our house was a wreck. Closest home improvement store is 35 minutes away. If we moved there then my husband wouldnít be across from work. It would also make us 1 hour away from his daughter who we get 2 times a month vs sometimes taking one trip to the home improvement store. No chance of buying out there. Rent there is $850 a month and I donít think the numbers worked out, but I admittedly havenít crunched them since his income would likely remain the same at a new job and we would drive more.
2013 sedan with 100k on it. We milk it for around 42 mpg highway even though itís rated for 32. I donít think it would be wise to get rid of it for an older one, but that might be me being dumb.

I canít think of anything else right now. I gave so much information and I hope itís not too much.

Is bankruptcy the suckaís way out? Do we need a punch in the face? Should we suck it up and cut some categories or make decisions that we donít want to? Do you see any ridiculous excuses?
« Last Edit: October 18, 2018, 02:40:28 PM by Overexplainer »

ysette9

  • Magnum Stache
  • ******
  • Posts: 3331
  • Location: Bay Area, CA
Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #1 on: October 18, 2018, 11:04:23 AM »
I skimmed through everything so I am sure I  missing something. Overall you seem to be doing very well managing very little income and keeping your expenses down. The overwhelming problem you have, aside from his debt, is you have insufficient income coming in. I’m sorry but having you stay at home is a luxury you can’t afford right now. You are the parent with the higher income potential, you two are drowning, he needs to take care of the kid and you need to go back to work. Once you dig yourselves out of debt hopefully the kiddo will be old enough for some sort of preschool/kindergarten and then your husband can go back to work. I understand you say he has a desire to move and get out and work (i get it) so maybe he can funnel that into some sort of side gig while the baby is napping or on the weekends and evenings. Right now you just cannot accord to have him be the sole breadwinner.
« Last Edit: October 18, 2018, 11:36:24 AM by ysette9 »

frugalfoothills

  • Stubble
  • **
  • Posts: 153
  • Age: 29
    • Bulls, Bears and Beers
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #2 on: October 18, 2018, 11:19:57 AM »
I can speak to the judgment. I work in the collection industry and I can tell you that the likelihood of having a judgment entered against you with zero notice is damn near impossible. You do not go from stopping monthly credit card payments to judgment over night, and the legal process for collections is intensely complicated, heavily regulated by both federal and state law. There's a stigma that collectors and law firms can do as they please because collectors used to run unchecked like the Wild West for many, many years, but that's just not the case in today's world. Multiple notices are sent to you throughout the various stages of the collection process, giving opportunities to pay prior to legal action... if those are ignored and you do not pay you can be sued. If you are sued then you would need to be successfully served by a process server, and only *then* (maybe) a judgment would be entered against you. It's not a fly-by-night operation that happens by surprise, and it costs money to the law firm that's pursuing you. Also, the regulations that collectors are required to follow are all meant to protect the least sophisticated consumer so that folks can't say "I didn't understand what you were telling me!" when they receive these notices, etc. That's not to say that certain entities aren't more or less concerned with playing nicely within the regulatory requirements than others, but to ignore or skirt the edges of the regs is a huge risk that can (and will) incur hefty fines.

As far as your budget goes... compared to my monthly expenses, yours look ridiculously low, so I don't have a ton of advice on cuts to make there. The debt and your low income level is what's killing you, and the only real answer is either for you to get a job or for DH to find better pay. If he's only getting 36 hours per week right now, could he tackle a 2nd part time job? I would also say that you should focus on the craigslist flipping and other side-hustles... you mention it can be as low as $0 some months. If you're not employed at the moment and that's something you can do at home, I'd say try to make the upper end of your current take-home ($300?) your normal monthly pay from that. You could maybe get up to $500 depending on what you're flipping... a few months of that and the $5k credit card is gone.

Keep your chin up. You don't have crazy high expenses... you just need to get creative.

Cassie

  • Magnum Stache
  • ******
  • Posts: 4455
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #3 on: October 18, 2018, 11:24:34 AM »
You either need to make more money and others have given you ideas how to do this or declare bankruptcy. Your situation will only get worse with time because unexpected things will happen such as car repairs, etc .

charis

  • Handlebar Stache
  • *****
  • Posts: 1631
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #4 on: October 18, 2018, 11:29:50 AM »
Yeah, your biggest issue, by FAR, is not your debts.  It is the fact that you quit a 60K job to live just above the poverty line.  There is no sufficient rationale for that in your post, and it's troubling that you would place yourself in that position.  You need to work harder to find a babysitter or outside child care or he needs to work out a way to take care of the child when you are working.
« Last Edit: October 18, 2018, 12:17:46 PM by jezebel »

frugalfoothills

  • Stubble
  • **
  • Posts: 153
  • Age: 29
    • Bulls, Bears and Beers
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #5 on: October 18, 2018, 11:31:23 AM »
I will also add to my post above -- I think considering bankruptcy right now when you're a SAHP with an earning potential of at least $60K is premature at best.

Another Reader

  • Magnum Stache
  • ******
  • Posts: 4566
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #6 on: October 18, 2018, 11:32:14 AM »
You need to go back to work, pronto.  You have earning capacity that far exceeds that of your husband.

Is there a mortgage on the house the ex and DD are living in?  Is your husband on the note?  If so, him declaring bankruptcy may put that mortgage in default.  The ex might have to refinance in her name only.  Consult with an attorney before you file.

Overexplainer

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #7 on: October 18, 2018, 11:44:16 AM »
Right now you just cannot accord to have him be the sole breadwinner.

Thanks for replying, I appreciate it. I know itís so much to read, and I may edit for length later when I feel less emotional.

Thatís pretty much the conclusion I came to as the only option for avoiding bankruptcy and actually making a difference in our lives. I feel like you can only cut so much, and although we have savings itís definitely not good to be digging into it when old clothing gives out or such.

My husband would so much rather file bankruptcy and I am still trying to wrap my head around explaining/convincing him that itís more important for me to work. I just donít feel right about keeping luxuries and writing off the debt.

I can speak to the judgment. I work in the collection industry and I can tell you that the likelihood of having a judgment entered against you with zero notice is damn near impossible.

If you're not employed at the moment and that's something you can do at home, I'd say try to make the upper end of your current take-home ($300?) your normal monthly pay from that. You could maybe get up to $500 depending on what you're flipping... a few months of that and the $5k credit card is gone.

Keep your chin up. You don't have crazy high expenses... you just need to get creative.

Part of me wonders if his ex wife was getting notices? I mean does it ever all go to the wrong address? Sheís the one who told us about the judgement being decided and that makes me a bit suspicious. I donít want to blame her, but sheís been known to do those sort of things. I think we may contact legal aid (If we qualify) and see if there is a way to get somewhere with them or have the judgement decided differently. I feel torn, because this is a company that deserved to be paid and I totally understand why they pursued him legally. At the same time sometimes it drives me nuts that it was acquired deceitfully.

Thanks for mentioning how quickly the flipping would add up for me. Iím a bit frazzled right now and I havenít thought much about how quickly it would add up to our debts. Theyíre small in the grand scheme of things, but so big to us right now.

MaybeBabyMustache

  • Handlebar Stache
  • *****
  • Posts: 1308
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #8 on: October 18, 2018, 11:55:16 AM »
Yeah, your biggest issue, but FAR, is not your debts.  It is the fact that you quit a 60K job to live just above the poverty line.  There is no sufficient rationale for that in your post, and it's troubling that you would place yourself in that position.  You need to work harder to find a babysitter or outside child care or he needs to work out a way to take care of the child when you are working.

This. You & your husband have two kids to support. You cannot afford to stay at home. I understand it's a challenging & emotional decision, but you have the ability to turn your life around relatively quickly by going to back to work. Your expenses are extremely low, and you could get the debts paid off relatively quickly.

I know it's difficult to move away from the emotions attached to the basement project. I'd feel similarly. However, it was a mistake on your husband's part to sign the papers, and he will now have to pay the price. I'd chalk it up to a very expensive lesson learned (hopefully), figure out a strategy to move past that debt, and move on. I'm not an expert in this area, but I'd try to reach out to the debtor with the explanation that you did not receive appropriate notice (perhaps going to the wrong place) & immediately work out a payment plan to demonstrate you are serious & expect to be able to pay them back over X time horizon.

frugalfoothills

  • Stubble
  • **
  • Posts: 153
  • Age: 29
    • Bulls, Bears and Beers
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #9 on: October 18, 2018, 12:02:20 PM »
Right now you just cannot accord to have him be the sole breadwinner.

Thanks for replying, I appreciate it. I know itís so much to read, and I may edit for length later when I feel less emotional.

Thatís pretty much the conclusion I came to as the only option for avoiding bankruptcy and actually making a difference in our lives. I feel like you can only cut so much, and although we have savings itís definitely not good to be digging into it when old clothing gives out or such.

My husband would so much rather file bankruptcy and I am still trying to wrap my head around explaining/convincing him that itís more important for me to work. I just donít feel right about keeping luxuries and writing off the debt.

I can speak to the judgment. I work in the collection industry and I can tell you that the likelihood of having a judgment entered against you with zero notice is damn near impossible.

If you're not employed at the moment and that's something you can do at home, I'd say try to make the upper end of your current take-home ($300?) your normal monthly pay from that. You could maybe get up to $500 depending on what you're flipping... a few months of that and the $5k credit card is gone.

Keep your chin up. You don't have crazy high expenses... you just need to get creative.

Part of me wonders if his ex wife was getting notices? I mean does it ever all go to the wrong address? Sheís the one who told us about the judgement being decided and that makes me a bit suspicious. I donít want to blame her, but sheís been known to do those sort of things. I think we may contact legal aid (If we qualify) and see if there is a way to get somewhere with them or have the judgement decided differently. I feel torn, because this is a company that deserved to be paid and I totally understand why they pursued him legally. At the same time sometimes it drives me nuts that it was acquired deceitfully.

Thanks for mentioning how quickly the flipping would add up for me. Iím a bit frazzled right now and I havenít thought much about how quickly it would add up to our debts. Theyíre small in the grand scheme of things, but so big to us right now.

Hmm, is she still living at the address at which the company would be trying to reach him? If so, then yes, it's possible/likely she was receiving the notices. Though with the suit & service, they would have needed to serve whoever the lawsuit was against. If both of their names were on the original debt (a primary borrower and a coborrower) and that was the address, depending on your state laws, I suppose she could have been served, but in that case the suit would have been filed against both of them. The judgment would be a combined judgment against both of them which means she, too, would be facing the possibility of being garnished... though if he was the primary borrower and she the coborrower, it's unlikely they would pursue her instead.

frugalfoothills

  • Stubble
  • **
  • Posts: 153
  • Age: 29
    • Bulls, Bears and Beers
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #10 on: October 18, 2018, 12:06:01 PM »
Also, one option to consider -- in some states (not sure where you are) you can enter into what is called a stipulated judgment with the judgment Plaintiff where they agree not to garnish as long as you adhere to a payment plan (a stipulation.) Probably worth a phone call to see whether they would be open to that, with the caveat that if you default on the stipulation they WILL proceed with garnishment.

charis

  • Handlebar Stache
  • *****
  • Posts: 1631
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #11 on: October 18, 2018, 12:24:24 PM »
And I think you need to unpack why your husband would rather declare bankruptcy and live in poverty than have you work.  The excuse that he likes to work doesn't hold a lot of water in these, rather dire, circumstances, especially when there are ways that he could continue to work anyway.  It's a very rigid way of thinking, imo.

Another Reader

  • Magnum Stache
  • ******
  • Posts: 4566
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #12 on: October 18, 2018, 12:31:03 PM »
Normally when a contractor is not paid, they file a lien on the property.  Filing BK might get your husband off the hook, but the property would still have a lien if that is the case.  It's complicated by him being an owner at the time the work was contracted and off title when the case was filed. 

It's also really important to know if your husband is on a mortgage for that house.  Signing over title does not remove him from the mortgage.  If the mortgage goes into default if he files for BK, the ex could lose the house.  The default would affect her credit as well.  In your shoes, I would consult with a bankruptcy attorney to see what consequences would result from filing.

Is the $10k judgement from the contractor or from the credit card company?  Again, the consultation with a decent BK attorney will help you sort this out.

Whatever you do, leave your IRA alone.  In most cases, it is exempt from judgements.  The BK attorney should help you with that as well.

Gagnante

  • Stubble
  • **
  • Posts: 151
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #13 on: October 18, 2018, 01:49:42 PM »
Depending on the exemption laws in your state, your $4.5K emergency fund may be vulnerable to seizure also.  I would look into that asap.

Overexplainer

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #14 on: October 18, 2018, 02:01:01 PM »
I think it's time to show my husband that I'm not the only one who's come to the solution that I need to be the one working.

You either need to make more money and others have given you ideas how to do this or declare bankruptcy. Your situation will only get worse with time because unexpected things will happen such as car repairs, etc .


I agree, thank you. I probably shouldn't need to hear it, but for some reason having it reaffirmed helps. We are mostly using my money from my last job for emergencies etc.

And I think you need to unpack why your husband would rather declare bankruptcy and live in poverty than have you work.  The excuse that he likes to work doesn't hold a lot of water in these, rather dire, circumstances, especially when there are ways that he could continue to work anyway.  It's a very rigid way of thinking, imo.

I'll respond to this, but I'm also going back to your other post too.
Part of the reason that we are having so much trouble with childcare is because we live in a town with a population of about 260. Most of the people that I know either drive here from the big city I mentioned or live here and drive 70 minutes round trip twice a day for childcare. I should do numbers, but I think if we had to drive 140 minutes a day for childcare and pay childcare that his job is pretty much worthless other than keeping him happy because he's out of the house. At the time we were also having issues with the baby being willing to take a bottle and I think that factored a lot into deciding who stayed home.
We could work opposite shifts, but he has to stay on first with mandatory overtime whenever they see fit. Which puts me into looking at third shift. I know already that I'm not going to be able to safely handle caring for a child when I'm supposed to be sleeping during the day and he could possibly come home as late as 4 hours before my shift. I think that if I spell this out for him he would better understand why I should be working..

DH was raised Mormon, and I'm not saying that they're all like this or that it's an excuse. I will say that the church he was raised in was highly sexist and based both a man and woman's worth on their respective duties. While he has nothing to do with it now and talks about how it's BS, I think that those teachings are ingrained in his sense of self worth. We definitely don't demonstrate other sexist tendencies in the household, but the income/provider thing is a stickler.

I hope I am not coming off wrong. I don't think these are good reasons to continue living at poverty. I hope to show we aren't completely bonkers though. We felt like we were doing okay and that it was temporary until we found something else but now it's unsustainable.

Normally when a contractor is not paid, they file a lien on the property.  Filing BK might get your husband off the hook, but the property would still have a lien if that is the case.  It's complicated by him being an owner at the time the work was contracted and off title when the case was filed. 

It's also really important to know if your husband is on a mortgage for that house.  Signing over title does not remove him from the mortgage.  If the mortgage goes into default if he files for BK, the ex could lose the house.  The default would affect her credit as well.  In your shoes, I would consult with a bankruptcy attorney to see what consequences would result from filing.

Is the $10k judgement from the contractor or from the credit card company?  Again, the consultation with a decent BK attorney will help you sort this out.

Whatever you do, leave your IRA alone.  In most cases, it is exempt from judgements.  The BK attorney should help you with that as well.

We aren't sure whether he is still on the mortgage, she was supposed to refinance.

10k from the contractor. It was around 5k, I think, then 18% APR was added and attorney fees for them.

I think we just need to talk to legal aid in general and then we would know for sure about payment plans and garnishment and protecting ourselves until finding childcare/job.

Depending on the exemption laws in your state, your $4.5K emergency fund may be vulnerable to seizure also.  I would look into that asap.


I'll bring that up to an attorney if I can't find info. We kept our money very separate and it's my account, but who knows. Thanks for bringing it up, because I didn't think of it.

Another Reader

  • Magnum Stache
  • ******
  • Posts: 4566
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #15 on: October 18, 2018, 03:45:35 PM »
Depending on your state, you may be able to look up the deed of reconveyance and the new mortgage in the recorder's records on-line.  My guess is she did not refinance.  In many states, him filing bankruptcy will put the mortgage in default.  That will show up on the ex's credit.  The lender may try to foreclose.

If you have legal aid in your area, you may not qualify to use it.  In your situation, you are probably better off seeking help from a competent bankruptcy attorney. 

cchrissyy

  • Pencil Stache
  • ****
  • Posts: 652
  • Location: SF Bay Area
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #16 on: October 18, 2018, 04:21:05 PM »
do you actually have a copy of this judgement and garnishing paperwork?  it sounds like no, and rather your information and fear is coming second-hand via the ex. is that true? because if so, your #1 task is to get official documents on what is going on.

If you are not sure if she refinanced, I would bet anything she did not. It is easy to find out if the old loan exists, he just needs to call the bank and if he is on the loan he can get full information on it. Also he can get his annual free credit report and see it listed there.

$10k of debt is FAR too little to ruin your credit over. That black mark lasts years, and if either you or your husband would get another job you could simply pay this debt far sooner and no long-term harm.  If you ever want to move out of this tiny place and buy or rent in a new city, you will need good credit scores, not the huge black mark of bankruptcy.

babybug

  • Bristles
  • ***
  • Posts: 377
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #17 on: October 19, 2018, 06:51:20 PM »
The troubling thing here is how your DH doesn't seem to feel overly responsible for his own divorce and child support obligations. He's comfortable keeping his family in dire poverty for this vague sense of gender roles ideal?  There are a lot of red flags in this drama. 

Sent from my KIW-L24 using Tapatalk


marty998

  • Walrus Stache
  • *******
  • Posts: 5790
  • Location: Sydney, Oz
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #18 on: October 19, 2018, 07:22:08 PM »
The troubling thing here is how your DH doesn't seem to feel overly responsible for his own divorce and child support obligations. He's comfortable keeping his family in dire poverty for this vague sense of gender roles ideal?  There are a lot of red flags in this drama. 

Not everyone is as enlightened as you are. Society hasn't quite gotten to the stage where men can be completely comfortable giving up the notion of having to be the breadwinner.

For some men, their core purpose is providing for their family. Their sole reason for being is wrapped up in this.

If you take that away, many men simply can't handle it mentally.

Yes look, I agree the right thing to do in this situation is for her to go back to work and for him to change the nappies but I get the sense   you can punch this bloke in the face over and over again about this and he will still get up in the morning and try to go to work for $10 an hour, because he believes it is the right thing for him to do.

He was raised that way over many years. He's not going to change overnight. But that should not stop the OP trying.

Freedomin5

  • Handlebar Stache
  • *****
  • Posts: 1248
  • Location: China
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #19 on: October 19, 2018, 10:40:34 PM »
I agree that you need more income, and yet you are hampered by the fact that you live in a town of 260. Therefore, let's take the idea of a previous poster to "get creative" a bit further:

1. Are you tied to this particular town of 260? If there are no jobs here, could you and DH both start applying for better paying jobs in other cities?

2. Do you and DH have college degrees? If so, look into tutoring English online, or other online jobs. For example, some people in this forum do online English tutoring and make upwards of $20/hour. This can be done in "off" hours, so either very early in the morning or on weekends, since you'll likely be tutoring kids in China (with the associated time difference).

babybug

  • Bristles
  • ***
  • Posts: 377
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #20 on: October 20, 2018, 01:11:31 PM »
The troubling thing here is how your DH doesn't seem to feel overly responsible for his own divorce and child support obligations. He's comfortable keeping his family in dire poverty for this vague sense of gender roles ideal?  There are a lot of red flags in this drama. 

Not everyone is as enlightened as you are. Society hasn't quite gotten to the stage where men can be completely comfortable giving up the notion of having to be the breadwinner.

For some men, their core purpose is providing for their family. Their sole reason for being is wrapped up in this.

If you take that away, many men simply can't handle it mentally.

Yes look, I agree the right thing to do in this situation is for her to go back to work and for him to change the nappies but I get the sense   you can punch this bloke in the face over and over again about this and he will still get up in the morning and try to go to work for $10 an hour, because he believes it is the right thing for him to do.

He was raised that way over many years. He's not going to change overnight. But that should not stop the OP trying.
You miss my point entirely. I don't quibble with any particular set of values in general regarding this.

The issue here is that his behavior is not in alignment with his stated or implicit values.

If OP staying home is non negotiable to him, 1) he not she should be sweating the income problem, and 2) all the great advice she gets here really isn't of any use.

Note that OP does not appear to share these values (if so, sorry I stand corrected)

Sent from my KIW-L24 using Tapatalk


Tuskalusa

  • Bristles
  • ***
  • Posts: 263
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #21 on: October 20, 2018, 01:41:06 PM »
I think itís worth further exploring a possible move to the bigger city. Perhaps there are higher paying jobs for both spouses, as well as nearby daycare. Costs would likely go up, but there could be some margin for that if income increases. If both spouses want to work, thatís awesome, but that necessitates daycare and the funding to pay for it. We can assume the DH needs to increase income at least by the amount of potential garnishment, and DW has life-changing income potential, as long as they are in a city with opportunity.

This would necessitate commuting back to the hometown for visits with the child from the first marriage, but that seems doable, as long as the big city is fairly close.

Having more income would also help mitigate some of the fears around the unknown debt. Itís easier to tackle these things when thereís some possible ways to address them.

Moving might not be your preference, but it might just be your best path for your future.

ender

  • Magnum Stache
  • ******
  • Posts: 4306
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #22 on: October 20, 2018, 02:07:16 PM »
Is moving an option? A few people have asked this but as far as I can tell you haven't addressed it.

I suspect your husband could do significantly better in terms of hourly pay as well as hours elsewhere.

Finances_With_Purpose

  • Pencil Stache
  • ****
  • Posts: 511
    • Finances With Purpose: deploying resources wisely to live vigorously
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #23 on: October 22, 2018, 07:47:22 PM »
This is a question for a bankruptcy lawyer in your state.  This has lasting financial implications that we can't really speak to without knowing the laws of your state (how it would impact you, for instance).

And parts of these debts can't be discharged in bankruptcy anyway, I believe, such as the child support.  It's not like that'll go away (you probably know that).  I was reading your post until it became clear you need an expert answer more than our speculation, and I'm guessing you can get a cheap/free consultation with someone that may give you more insight. 

Another out-of-the box thought: you might be able to move to a state where they can't garnish wages for a judgment...

Kayad

  • 5 O'Clock Shadow
  • *
  • Posts: 19
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #24 on: October 27, 2018, 04:17:19 AM »
This is a question for a bankruptcy lawyer in your state.  This has lasting financial implications that we can't really speak to without knowing the laws of your state (how it would impact you, for instance).

And parts of these debts can't be discharged in bankruptcy anyway, I believe, such as the child support.  It's not like that'll go away (you probably know that).  I was reading your post until it became clear you need an expert answer more than our speculation, and I'm guessing you can get a cheap/free consultation with someone that may give you more insight. 

Another out-of-the box thought: you might be able to move to a state where they can't garnish wages for a judgment...

And/or a consumer rightís attorney and/or a family law attorney.  Something is really awry if dh truly wasnít served.  That visit to legal aid is a good idea (asap).

Dgibs

  • 5 O'Clock Shadow
  • *
  • Posts: 11
  • Age: 36
  • Location: UK
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #25 on: November 06, 2018, 07:03:30 AM »
I'm not from America - so there is obviously a reason this will not work that I am unaware of, but,

People drive 140 miles a day for childcare.
You cant find childcare in your town.
You have a child and need childcare.

=
set up your own child minding service from home for a couple close friends
charge less than the other option + extra 140 miles cost.
still earn enough to make it worth it.

verdebutterfly

  • 5 O'Clock Shadow
  • *
  • Posts: 6
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #26 on: November 08, 2018, 02:45:57 PM »
I'm not seeing where the OP should 'go back to work...you cannot afford the luxury of staying home' without more details about what it would COST to work for $60k/year (assuming you can return to that)?

Wasn't that the point of this Case Study?

https://www.mrmoneymustache.com/2012/04/04/reader-case-study-working-a-crappy-job-for-nothing/

Note:  I understand in the above example the husband was a high earner at a job 1.5 miles from home (To which MM said, 'STOP DRIVING DUMMY!')

But!  Unless OP has quality childcare on site at this hypothetical job and it is tax deductible and well, veeeery low cost, and she doesn't have a long 'death drive' (to quote MM), and all other costs associated with working, then yes, go for it.

It's like I used to hear Mr. Ramsey say:  'Just get another job.  And another one.  Whatever you can find.' and he would have zero discussion about what is the REALIZED take home pay from said side jobs.

Maybe you have a MIL or someone who is willing to devote their elder years to raising grandchildren so the parents can get financially stable but if not, then daycare, afterschool care, nanny, au pair, what have you is going to cost ya.  Every parent wants safe, reliable and good (note i did not say, 'best') care for their child.  That can significantly reduce take home pay as well as negatively impact quality of life and family relationships.

Overexplainer:  Since your DH was raised Mormon, is this a religion you both now follow?  Are you tithing?  Sorry to ask personal/spiritual path questions.  I would advise not to tithe at this time (or ever?) but that is me. 

But an upside in the Mormon society is available childcare with all the women staying home.  If you could share with other families, as is typical in Mormonism, you could get a great solution.  Another upside are MLMs which you can sell to your small town.  You could also suggest your DH reading and following Stephen Covey (LDS) who writes extensively of personal responsibility and maturity.  (Not sure you want to show him this thread or any part of it)  Your DH seems to avoid things that are painful instead of pushing through and finding relief on the other side of overcoming.  I've seen a lot of Mormon men stay immature whilst coddled by church policies and a lot of women screwed over by the same policies, but there are also good examples of Mormon men who are shoulder-to-the-wheel pioneer types who like to run their own planet like a boss.

charis

  • Handlebar Stache
  • *****
  • Posts: 1631
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #27 on: November 08, 2018, 03:02:43 PM »
I'm not seeing where the OP should 'go back to work...you cannot afford the luxury of staying home' without more details about what it would COST to work for $60k/year (assuming you can return to that)?

Wasn't that the point of this Case Study?

https://www.mrmoneymustache.com/2012/04/04/reader-case-study-working-a-crappy-job-for-nothing/

Note:  I understand in the above example the husband was a high earner at a job 1.5 miles from home (To which MM said, 'STOP DRIVING DUMMY!')

But!  Unless OP has quality childcare on site at this hypothetical job and it is tax deductible and well, veeeery low cost, and she doesn't have a long 'death drive' (to quote MM), and all other costs associated with working, then yes, go for it.

It's like I used to hear Mr. Ramsey say:  'Just get another job.  And another one.  Whatever you can find.' and he would have zero discussion about what is the REALIZED take home pay from said side jobs.

Maybe you have a MIL or someone who is willing to devote their elder years to raising grandchildren so the parents can get financially stable but if not, then daycare, afterschool care, nanny, au pair, what have you is going to cost ya.  Every parent wants safe, reliable and good (note i did not say, 'best') care for their child.  That can significantly reduce take home pay as well as negatively impact quality of life and family relationships.

Overexplainer:  Since your DH was raised Mormon, is this a religion you both now follow?  Are you tithing?  Sorry to ask personal/spiritual path questions.  I would advise not to tithe at this time (or ever?) but that is me. 

But an upside in the Mormon society is available childcare with all the women staying home.  If you could share with other families, as is typical in Mormonism, you could get a great solution.  Another upside are MLMs which you can sell to your small town. You could also suggest your DH reading and following Stephen Covey (LDS) who writes extensively of personal responsibility and maturity.  (Not sure you want to show him this thread or any part of it)  Your DH seems to avoid things that are painful instead of pushing through and finding relief on the other side of overcoming.  I've seen a lot of Mormon men stay immature whilst coddled by church policies and a lot of women screwed over by the same policies, but there are also good examples of Mormon men who are shoulder-to-the-wheel pioneer types who like to run their own planet like a boss.

There is no upside to MLMs in a small town - this is terrible advice - go look at the thread on this topic.  And there are other very important considerations for an unemployed SAHP than just realized income.   The OP has already stated that they aren't practicing Mormons.  It's also been pointed out that her husband can stay home with the children (if a lack of quality care is an issue) because she is the higher earner.

verdebutterfly

  • 5 O'Clock Shadow
  • *
  • Posts: 6
Re: Reader Case Study - Bankruptcy for Divorce Debt Ghosts?
« Reply #28 on: November 08, 2018, 03:35:36 PM »
There is no upside to MLMs in a small town - this is terrible advice - go look at the thread on this topic.  And there are other very important considerations for an unemployed SAHP than just realized income.   The OP has already stated that they aren't practicing Mormons.  It's also been pointed out that her husband can stay home with the children (if a lack of quality care is an issue) because she is the higher earner.

I hate MLMs and completely agree.  I've seen them work in Mormon communities (not all).  Thank you for clarifying it all for me.

Given they are experiencing the negative fallout from a Mormon mentality in Overexplainer's DH, might be a consideration to rejoin and become part of a community to offset childcare worries and costs, among other community benefits.