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 it’s 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 it’s morally wrong. I’ve been reading MMM since 2015, and he’s started seeing things my way after awhile. However, we still have debts. Husband doesn’t 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 didn’t do the smart thing and hire an attorney.
He didn’t read through the paperwork like he should of. That’s on him, but we can’t 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 husband’s 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 wasn’t 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 doesn’t 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 haven’t 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 doesn’t look like we can improve his forklift operator income. He has a degree in massage therapy, but there isn’t 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 IRA’s 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
(It’s 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 haven’t 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 baby’s bedtime to cool it to 78 if we couldn’t get there ourselves. The company also charges other minimum fees and there’s 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 mother’s home, and usually one trip for home improvement store.)
15 Water*
(We have a rainwater collection system, but we haven’t replaced all of our needs)
10 DS Clothes/etc.
(He mostly gets hand me downs or gifts for all his needs. We haven’t 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
(That’s 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.
(Haven’t paid as we haven’t 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 doesn’t factor taxes though. They are currently taking 600 in taxes, but my husband didn’t fill out the forms right. I’m 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 wouldn’t 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 don’t think the numbers worked out, but I admittedly haven’t 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 it’s rated for 32. I don’t think it would be wise to get rid of it for an older one, but that might be me being dumb.
I can’t think of anything else right now. I gave so much information and I hope it’s not too much.
Is bankruptcy the sucka’s way out? Do we need a punch in the face? Should we suck it up and cut some categories or make decisions that we don’t want to? Do you see any ridiculous excuses?