Author Topic: I think I am totally Effed  (Read 14720 times)

effed

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I think I am totally Effed
« on: March 20, 2014, 04:27:13 PM »
I think my situation is unique enough to warrant a post and not a search through the archives. I will *try* to make this as concise as possible. I am a 47 year old disabled sculptor with a neurological disorder that is degenerative and effects my entire body, including my hands. Yes, that's right, I make my living with messed up hands that are getting more messed up all the time. My husband also works at home making the castings of my sculptures and doing all the shipping, two things I physically have not been able to do in ten or more years. When he decided to leave a construction job to help me we decided we could live anywhere we wanted, so we moved to a more rural area where we could have a few acres and some horses. This area is not rich in jobs. The nitty gritty:

We used to make twice as much money pre-2008

My husband has a huge student loan, like twice as much as he borrowed. It's up in the $140-$150K range

The only other debt we have is a mortgage

The student loan peeps used to only take our paychecks into consideration when calculating his payment. He was on the ICR plan. They changed this and now require paychecks AND our tax returns, bumping his payment up to an amount we cannot afford. Currently it is on forbearance.

Did I mention we make half as much money?

My disability is beginning to interfere with my sculpting

We have some meager investments, enough to half pay off our mortgage

If I apply for disability it can take a year or even two years to get approved, and I would get a scanty $1000 a month
 
We qualified for subsidies for health insurance, otherwise we would have had to cancel this year. Good thing as now I require a minor surgery. I have a $6500 deductible, and we have $2500 in an HSA that will be gone because of this, and I am sure I will owe more on top of that.

I am stuck between a rock and a hard place. Because of the health insurance subsidies that make it possible for us to even have the crappy coverage we have and the looming student loan debt which will be recalculated in September, I can not try to make more $$$, even if I could. Same thing with my husband and work. He has figured out how to shift some money around to technically lower our income so that hopefully we don't get nailed by the student loan in the fall. We made less than $30,000 last year and won't make much more this year.  We have discussed getting divorced so that I could be free to make more money, but with my disability worsening I just don't think I have it in me.

I feel truly Effed.




the fixer

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Re: I think I am totally Effed
« Reply #1 on: March 20, 2014, 04:55:57 PM »
Are you claiming as much as you can right now for business use of your home? That can lower your income quite a bit. Get your personal stuff to take up as little space as possible then spread out your sculpting stuff to maximize square footage that's deductible. If you haven't been paying careful attention to your business deductions, a good CPA could more than pay for herself in tax savings by identifying these types of savings for you.

On a more strategic note, you're getting to a point where your husband is the only one who can bring in a good income. I think the only way to solve this problem long-term is to rethink your approach. You need to apply for disability because it's only going to get worse, so the sooner you start the process the sooner it will start to help. Next, your husband needs to increase his income. He was in construction before, doing what? Could he be retrained as a plumber, welder, locksmith, or electrician (welder may require schooling but the other three should be paid apprenticeships)? Can he do carpentry/cabinetmaking? Failing all of that, can he use the degree(s) he's paid so much money to (hopefully) get? The Obamacare subsidy cliff is a problem, but if you can find a way to bump up your income enough you can cancel that out and start to get ahead. Besides, once you start receiving disability benefits you automatically get enrolled in Medicare, and that will help a ton.

It also sounds like you might be able to downsize your home, but you haven't provided enough details and I don't think it's the most important thing you could be doing to fix your situation.

Milspecstache

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Re: I think I am totally Effed
« Reply #2 on: March 20, 2014, 05:04:07 PM »
I didn't see any mention of expenses.  One of the great things about this forum is all the tips they provide on reducing monthly expenses.  I really thought I had a pretty lean budget but have found numerous ways to further cut my expenses.

effed

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Re: I think I am totally Effed
« Reply #3 on: March 20, 2014, 05:15:10 PM »
Thank you Fixer for your reply. We do claim quite a bit of square footage for business use, two bedrooms (three bedroom house) and an attached shop. Plus our CPA seemed to think it was fine to deduct what I spend to feed my horses as I am an equine artist and they serve as models and inspiration. Some of you will already be thinking 'horses? Get rid of those!' but, as I said, their care is deducted off my business (that will end when I can no longer earn an income from my art). We moved across the state so we could have horses, and yes, they can be expensive, but as a disabled person it is the only way for me to go 'hiking'. I am not willing to give that up yet. We do not have boats or jeeps or jetskis. We have the horses.

Our house is not big, 1500 square feet that we bought for a song as it was a beat up rental and we have made improvements ourselves over 12 years.

My husband never worked in his field, and he had borrowed money in the form of student loan for both he and his first wife to go to school. He did it under his name and there was no recourse when he got divorced to make her claim her half of it. He was far too nice, IMO. He was working in a stair and floor refinishing business, but he was in his 20's then. We are pushing 50 now. He seems to think he can make money day trading, but all that has done is addicted him to the activity and make it less likely that he will want to deal with reality.

We owe $61000 on our house. It's worth maybe $280000
The student loan is somewhere in the $140-$150K range
We have about $37000 in the stock market
We have about $25K in our business account
I have a $10K gift from my father
We spend about $2K a month (I should probably break this down for you guys, huh?) NO cable TV or cell phone
I can expect to make perhaps $35000 this year but because of the subsidies and student loan I feel like I am prevented from trying to make more. One last hurrah as it were.

Hopefully that provides more info.

MKinVA

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Re: I think I am totally Effed
« Reply #4 on: March 20, 2014, 05:21:51 PM »
Can you take a second mortgage on the house to pay off the student loans? Sounds as if your husband is not on board in terms of earning enough to pay off his bills. He needs to get on board. At the end of it, you can sell the house, pay off everything and come away with enough money to start over without the debt.

effed

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Re: I think I am totally Effed
« Reply #5 on: March 20, 2014, 05:29:27 PM »
OK, here is a breakdown of my expenses:

Mortgage: $608 and I pay an additional $100 principle payment total payment $708
groceries: $400 we live in a rural area and our local store is pricey, but 5 miles away. Walmart is 25 miles away. We buy almost no beef as we hunt and eat venison
Vehicle insurance: Ford F250 truck $20 per month Ford F450 (tow vehicle for horse trailer) $33 per month. It is rated a commercial size vehicle, so less companies will insure it.
Health Insurance/Obamacare: $153 per month
fuel: $125 per month. We both work at home, but the 'real' town with doctors, Walmart, etc is 25 miles away.
electricity:varies according to season, winter high about $150, summer low around $65
Trash service: $32 per month. We are considering cancelling it and hauling to the dump ourselves
Horses: I try to keep my horses out of these figures. My father gives me $10K per year, and out of that I pay for my horse expenses. Roughly $2000-3000 per year depending on local hay prices. Being disabled this is my main form of outdoor recreation (I can't walk).

We spend very little on dining, clothing, "stuff" etc. I buy cloths at the thrift stores. We go out to eat about once a month, sometimes not even that much. We eat very little processed food, I like cooking. We hunt and have venison. Hunting is typically done horseback for me.


effed

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Re: I think I am totally Effed
« Reply #6 on: March 20, 2014, 05:30:57 PM »
I forgot, the mortgage is 5.25%. I am pretty sure the student loan is less interest. Doesn't a student loan get forgiven when you have been on the ICR plan for 15 years?

effed

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Re: I think I am totally Effed
« Reply #7 on: March 20, 2014, 05:34:33 PM »
The Fixer, I forgot to say that one does not receive Medicare for two years after being approved for disability benefits. I would also be premitted to make about $1000 per month without effecting my benefits. I have enough inventory of my sculptures I can probably dole out about $1000 worth per month for a year or two even if I can't hold a pencil.

windawake

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Re: I think I am totally Effed
« Reply #8 on: March 20, 2014, 05:44:34 PM »
I don't necessarily have any advice for you since I have limited knowledge of loans. But I just wanted to mention that hunting on horseback sounds badass!

Besides that I hope you get some helpful info here!

warfreak2

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Re: I think I am totally Effed
« Reply #9 on: March 20, 2014, 05:55:53 PM »
I think you are totally effing awesome, you're an artist and you make enough for both of your expenses and some more. Definitely claim disability benefits, that will improve your finances substantially - $1000 per month is half of your expenses already.

In your place, the most important thing for me would be continuing to make art for as long as possible. It probably won't be the same kind of art, but it sounds like you already have a reputation. For example, I guess there's specialist software/hardware that would help you control a computer without the use of your hands, you could perhaps consider learning to make designs as 3D models, and outsourcing their fabrication. There would be startup costs, but I strongly suspect they could be funded by something like a Kickstarter campaign. Perhaps this is a fanciful, desperate idea, but it's just one idea and I'm sure you can think of a lot more.

Get your husband to stop day-trading; you're practically guaranteed to lose money in the long run, relative to simple buy-and-hold index funds. He should use that time to earn money by working - there'll always be opportunities for him to market your art, if nothing else.

Mazzinator

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Re: I think I am totally Effed
« Reply #10 on: March 20, 2014, 05:59:32 PM »
I forgot, the mortgage is 5.25%. I am pretty sure the student loan is less interest. Doesn't a student loan get forgiven when you have been on the ICR plan for 15 years?

I think the forgiveness is after 25 years, unless you've been grandfathered in some how. Have you looked into IBR vs ICR? Not sure how these differ exactly, but i believe they are a bit similar. IBR is based off your AGI. I would call the loan provider and ask a ton of questions.

I don't think you're effed ;-) mainly due to the equity in your house and it seems it could be paid off sooner than the student loans, which may be forgiven...

Eric

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Re: I think I am totally Effed
« Reply #11 on: March 20, 2014, 06:04:38 PM »
How much is that F250 worth?  Do you really need two huge gas guzzling trucks?  Can you sell that one and pick up an old cheap sedan or hatchback or something?

Also...

Fuck.  Fucking.  Fucked.  Fuckity-fuck fuck fuck.  That is all.

(Sorry, all those abbreviations were getting to me)

Annamal

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Re: I think I am totally Effed
« Reply #12 on: March 20, 2014, 06:07:22 PM »
Just wanted to say, you sound majorly badass!

I was wondering whether you might be in a position to teach or mentor later on when you've lost dexterity? It wouldn't make for a great income but it might be a bonus if you've still got the energy for it.

AJ

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Re: I think I am totally Effed
« Reply #13 on: March 20, 2014, 06:41:11 PM »
Is there something specific pinning you to your location? It seems like with all that equity you could move to somewhere in the country that you could keep horses AND hubby could find work.

MarciaB

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Re: I think I am totally Effed
« Reply #14 on: March 20, 2014, 06:54:32 PM »
Please think hard about divorce (don't do it!) and get good legal advice before even thinking of doing anything of the kind.

When my late husband and I were working on getting his affairs in order (I lost him to Lou Gehrig's) we asked our (elderlaw) attorney  whether it would make financial sense for us to divorce (even though just asking the question made me nauseous) and she advised strongly against it. We managed to get him on Disability, and then later on Medicaide (because they pay for skilled nursing care, which is a huge issue for folks with ALS).

Cpa Cat

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Re: I think I am totally Effed
« Reply #15 on: March 20, 2014, 07:03:37 PM »
Do you have any space that you can rent to other people for their horses? You could maybe start a small side business boarding a couple of horses.

Do you have any land that you can rent to someone interested in small-scale farming? Or small-scale grazing?

Just be careful of any hobby-loss rules on that type of business.

I realize it's just a drop in the bucket. If you got on disability and were able to churn out $1000 extra in income, you would have your expenses covered. Then it seems that it's a matter of your husband earning whatever he can to put toward the student loan - or to carefully manage your income until your 25 year repayment is up.

You should make a plan for one or the other, though - either you try to pay off the student loan as aggressively as you can, or you try to minimize your payments to the loan until it's forgiven.

Milspecstache

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Re: I think I am totally Effed
« Reply #16 on: March 20, 2014, 08:59:13 PM »
Can you take a second mortgage on the house to pay off the student loans?

In the current market, you should be able to get a much better rate (than your current 5.25%) on your house when you do this.  Particularly given that your Loan-to-Value ratio should still be pretty high at 75% so no PMI either.

electriceagle

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Re: I think I am totally Effed
« Reply #17 on: March 20, 2014, 11:56:18 PM »
Dear Effed,

Youre not Effed, but you do have problems. Heres my advice:

First, stop the day trading. Take it from someone who made the mistake of active investing: its gambling. Eventually, it will go wrong. When it does, you really will be Effed. Daytrading is addictive because you often make some money at the beginning; you might even come up with a system to generate money regularly. Until it goes wrong and a significant part of your capital is gone.

Don't take out a loan on your house. Your nearly paid off house is one of your best assets. If you are ever forced into bankruptcy, many states will let you keep your house (as well as any 401k or IRA). If you are at risk of staring into the abyss, don't spend anything that you can keep in bankruptcy.

You may want to consider a refinance. It would bring your interest rate down.

Sell one car. You need the money more than you need 2 cars and a horse.

You know that you need surgery this year. Get out a calculator and figure out if you should get higher end (gold?) Insurance to bring down the deductible?

This may seem counterintuitive, but consider putting money into a sep ira. You may bring your income down enough to block student loan payments and increase your Obamacare subsidy. You can take out 10k in an emergency without a fine.

How long before the student loans fall off? You will need to decide whether to pay them off or wait them out.

Saverocity

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Re: I think I am totally Effed
« Reply #18 on: March 21, 2014, 06:18:38 AM »
Dear Effed,

Youre not Effed, but you do have problems. Heres my advice:

First, stop the day trading. Take it from someone who made the mistake of active investing: its gambling. Eventually, it will go wrong. When it does, you really will be Effed. Daytrading is addictive because you often make some money at the beginning; you might even come up with a system to generate money regularly. Until it goes wrong and a significant part of your capital is gone.

Don't take out a loan on your house. Your nearly paid off house is one of your best assets. If you are ever forced into bankruptcy, many states will let you keep your house (as well as any 401k or IRA). If you are at risk of staring into the abyss, don't spend anything that you can keep in bankruptcy.

You may want to consider a refinance. It would bring your interest rate down.

Sell one car. You need the money more than you need 2 cars and a horse.

You know that you need surgery this year. Get out a calculator and figure out if you should get higher end (gold?) Insurance to bring down the deductible?

This may seem counterintuitive, but consider putting money into a sep ira. You may bring your income down enough to block student loan payments and increase your Obamacare subsidy. You can take out 10k in an emergency without a fine.

How long before the student loans fall off? You will need to decide whether to pay them off or wait them out.

I generally concur, other than that house attitude - taking that approach strikes me as a bit of a mooch from the system, this couple has sufficient equity to clear off their debts in full, plus sufficient wiggle room in their lifestyle to reduce costs and get onto a healthier savings plan.  I think that approaches like you suggest here are one of the reasons that student debts are not dischargeable in bankruptcy.

My advice:

Get 100% out of the stock market, stop day trading immediately. It is gambling and when in debt it is like going to Vegas on a credit card.
Take that $37000 and create a safety net in terms of a liquid emergency fund, 3-6 months
Take out a new mortgage with equity to pay down student debt OR consider moving to release equity (could be more favorable from a tax perspective)

Your husband needs to accept his responsibilities. Counseling may be required if you cannot make him see he needs to stop his bad habits and take care of his debt.

Lastly, you may wish to drill down on your monthly expenses - you said 'about 2K' but your budget breakdown appeared quite below that, might be worth looking through all your statements for a few months to see if you have drifted in any bad habits.

I don't think you are effed, but you do need to make change, and by accepting your situation you made a massive first step.
« Last Edit: March 21, 2014, 06:26:22 AM by Saverocity »

libertarian4321

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Re: I think I am totally Effed
« Reply #19 on: March 21, 2014, 07:26:35 AM »
Thank you Fixer for your reply. We do claim quite a bit of square footage for business use, two bedrooms (three bedroom house) and an attached shop. Plus our CPA seemed to think it was fine to deduct what I spend to feed my horses as I am an equine artist and they serve as models and inspiration. Some of you will already be thinking 'horses? Get rid of those!' but, as I said, their care is deducted off my business (that will end when I can no longer earn an income from my art). We moved across the state so we could have horses, and yes, they can be expensive, but as a disabled person it is the only way for me to go 'hiking'. I am not willing to give that up yet. We do not have boats or jeeps or jetskis. We have the horses.

Our house is not big, 1500 square feet that we bought for a song as it was a beat up rental and we have made improvements ourselves over 12 years.

My husband never worked in his field, and he had borrowed money in the form of student loan for both he and his first wife to go to school. He did it under his name and there was no recourse when he got divorced to make her claim her half of it. He was far too nice, IMO. He was working in a stair and floor refinishing business, but he was in his 20's then. We are pushing 50 now. He seems to think he can make money day trading, but all that has done is addicted him to the activity and make it less likely that he will want to deal with reality.

We owe $61000 on our house. It's worth maybe $280000
The student loan is somewhere in the $140-$150K range
We have about $37000 in the stock market
We have about $25K in our business account
I have a $10K gift from my father
We spend about $2K a month (I should probably break this down for you guys, huh?) NO cable TV or cell phone
I can expect to make perhaps $35000 this year but because of the subsidies and student loan I feel like I am prevented from trying to make more. One last hurrah as it were.

You have the ability to get out from underwater, but you are going to have to do some things you may not want to do.

Warning:  I'm not as good at soft pedaling as some of the others on this forum.  This is going to be pretty blunt and to the point.

You have a lot of equity in the house.  Sell it and buy a much cheaper place or rent.  Take whatever proceeds you have from this sale and pay off a big chunk of the student loans.

Sell the stocks.  This should allow you to pay off most of the remaining loans.

At this point, you should be pretty much debt free.

Since your expenses aren't that high, and will be even lower if you sell the house, you would just need a modest income to get by. 

This is where your husband comes in.  He's not contributing much if all he is doing is helping you with your sculpturing (2 of you working at this, and only earning $35k per year?  That may not be the best use of his time).  He can help you do the sculpting stuff on weekends and nights.  During the work week, he should get a real job. It doesn't have to be anything exotic, just enough to cover expenses.  Construction should pay enough. 

Day Trading is NOT a real job, he's more likely to lose money than make it.






« Last Edit: March 21, 2014, 07:29:47 AM by libertarian4321 »

MustachianAccountant

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Re: I think I am totally Effed
« Reply #20 on: March 21, 2014, 09:06:06 AM »
3) I don't know how the math all works out on the IBR and ACA subsidy, but one thing I see all the time doing taxes is people either wanting to stay under a certain income or get extra deductions to lower their taxes not realizing that the extra income more than outweighs extra taxes (and the cost of extra deductions more than outweigh the tax benefits). Make sure that making extra money would actually cost you money overall.

This. This so much. If anyone wants to give me some of their money because they don't want to pay taxes on it, feel free. I'll be happy to take it and pay the taxes.

effed

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Re: I think I am totally Effed
« Reply #21 on: March 21, 2014, 09:06:29 AM »
You all are fucking awesome, you know that?

I have thought a lot about all of these things, usually in one for or another every day. First, the student loan is something that we decided we will wait out, it will be forgiven in our 60's. In that time the original borrowed amount will be paid for, personally I don't have an issue with that. The house and everything else is in my name. Ironically the more disabled I get the more I rely on him to do things for me, and issue to take into consideration when  thinking he should get a job. That is the obvious solution, of course, but comes with its own set of complications. My husband says he will be out of the stock market on April 1st, we shall see. I can see how it's captured his attention and he does get angry with me when I say something about it. He made $5k last year doing it.

The house, I have also thought these same things about selling and moving somewhere less expensive. We are in a desirable part of the country, a half hour from Durango CO. We bought our place, a stick built house on 3 acres with a seasonal creek, in 2001 for $160,000. Over the years we built a barn, an attached garage and shop, replaced linoleum for tile, changed out carpet for wood flooring, re roofed the house, and painted it. All this was done by my husband, mostly. We had a friend we would hire from time to time, but he has since passed away. The house is worth $280,000 according to Zillow, I am not sure how accurate that is. I LOVE living here, we already did a big move from the Denver area to here because it offered more for less. 

What my husband wants to do with the 370000 in investments is to do something with a 401K to lower our income for this year. Apparently I could access this money once I have successfully acquired disability, which can take a year or longer and you can't have a income during the process. So I am a  it uneasy about locking up any money right now. We have to stay around $30K of income this year to not get hit with huge student loan payments or pay more for our Obamacare. Last year we made a paltry $24k. I have had years where I made $70K to $100K, esp before 2008. I haven't had to get by by on this little since my early 20's :)

The vehicles, yes I think about this a lot. We both work at home and go to the small town 5 miles away maybe once per week, and Durango maybe 2 times a month. So they don't get driven much. We have a large horse trailer that is part camper and that is why we have an F450. Truth is it is getting harder form me to even get into the camper, let alone the overhead bed, so after this summer and fall we may sell it, and then the F450 could be sold as well. I would be devastated to give it up, we use it to go to Utah a few hours away in the spring and fall to ride in canyon country and it is one of my great passions in life. I have thought about tent camping, and we do tent camp on backcountry trips, it is something that could be possible. Last year we did not go do any Utah trips to save money.

I think it is difficult for non disabled people to grasp the level of complexity being disabled adds to ones life. I use a wheelchair and some of the things we have done to our house, like widening doorways, is to make it workable for me. I cannot just buy another house, it would all have to be done again. So many considerations, it is a big part of why I often feel so overwhelmed.

So my minor surgical procedure is not something that can be put off, and it will wipe out our HSA and then some. I wish now I would have opted for a lower deductible, as mine is $6500. We made our decisions on our deductibles based on the good health and extremely low medical expenses we have had for the last few years. My current medical situation is all about an abnormal Pap smear, I feel as healthy as I did last year, but they do not feel confident that cancer has been ruled out until further searching and poking around, this time under anesthesia. So far two in office tests will cost me over $1000.

Anyhow, I really appreciate all the great advice and info and time that has been put into these replies :) Fuckin A



Saverocity

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Re: I think I am totally Effed
« Reply #22 on: March 21, 2014, 09:33:03 AM »
You all are fucking awesome, you know that?

I have thought a lot about all of these things, usually in one for or another every day. First, the student loan is something that we decided we will wait out, it will be forgiven in our 60's. In that time the original borrowed amount will be paid for, personally I don't have an issue with that. The house and everything else is in my name. Ironically the more disabled I get the more I rely on him to do things for me, and issue to take into consideration when  thinking he should get a job. That is the obvious solution, of course, but comes with its own set of complications. My husband says he will be out of the stock market on April 1st, we shall see. I can see how it's captured his attention and he does get angry with me when I say something about it. He made $5k last year doing it.

The house, I have also thought these same things about selling and moving somewhere less expensive. We are in a desirable part of the country, a half hour from Durango CO. We bought our place, a stick built house on 3 acres with a seasonal creek, in 2001 for $160,000. Over the years we built a barn, an attached garage and shop, replaced linoleum for tile, changed out carpet for wood flooring, re roofed the house, and painted it. All this was done by my husband, mostly. We had a friend we would hire from time to time, but he has since passed away. The house is worth $280,000 according to Zillow, I am not sure how accurate that is. I LOVE living here, we already did a big move from the Denver area to here because it offered more for less. 

What my husband wants to do with the 370000 in investments is to do something with a 401K to lower our income for this year. Apparently I could access this money once I have successfully acquired disability, which can take a year or longer and you can't have a income during the process. So I am a  it uneasy about locking up any money right now. We have to stay around $30K of income this year to not get hit with huge student loan payments or pay more for our Obamacare. Last year we made a paltry $24k. I have had years where I made $70K to $100K, esp before 2008. I haven't had to get by by on this little since my early 20's :)

The vehicles, yes I think about this a lot. We both work at home and go to the small town 5 miles away maybe once per week, and Durango maybe 2 times a month. So they don't get driven much. We have a large horse trailer that is part camper and that is why we have an F450. Truth is it is getting harder form me to even get into the camper, let alone the overhead bed, so after this summer and fall we may sell it, and then the F450 could be sold as well. I would be devastated to give it up, we use it to go to Utah a few hours away in the spring and fall to ride in canyon country and it is one of my great passions in life. I have thought about tent camping, and we do tent camp on backcountry trips, it is something that could be possible. Last year we did not go do any Utah trips to save money.

I think it is difficult for non disabled people to grasp the level of complexity being disabled adds to ones life. I use a wheelchair and some of the things we have done to our house, like widening doorways, is to make it workable for me. I cannot just buy another house, it would all have to be done again. So many considerations, it is a big part of why I often feel so overwhelmed.

So my minor surgical procedure is not something that can be put off, and it will wipe out our HSA and then some. I wish now I would have opted for a lower deductible, as mine is $6500. We made our decisions on our deductibles based on the good health and extremely low medical expenses we have had for the last few years. My current medical situation is all about an abnormal Pap smear, I feel as healthy as I did last year, but they do not feel confident that cancer has been ruled out until further searching and poking around, this time under anesthesia. So far two in office tests will cost me over $1000.

Anyhow, I really appreciate all the great advice and info and time that has been put into these replies :) Fuckin A

Well you may have completely ignored anything I suggested, but at least you are comfortable saying Fuck now. So that's a great start!

Good luck, it must be really tough figuring out this, plus just getting 'life' done.  Smack your husband upside the head regarding his trading though.

And, don't overlook tax deductions for the home alterations that you have made.

effed

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Re: I think I am totally Effed
« Reply #23 on: March 21, 2014, 09:55:12 AM »
I have not ignored anything anyone has suggested, it is all good advice and I appreciate ALL of it! THANK YOU! You guys kick butt!

I will try to get my info a little better organized. I recently started using Mint which goes back three months, but I have over a decade of info in Quicken that I was too lazy to access yesterday.

My husband has said he will be totally done with his trading on April 1st, so I feel I have to wait that out and give him the chance to live up to his word. Of course if my next medical test shows I have cancer then I truly am fucked, so nothing more than mulling this all over will be done until that is resolved. Does anyone now if you can even change your ACA plan after being told you need a minor surgical procedure to rule out cancer? We enrolled in December, I think you can only change once a year?

I actually hadn't thought of refinancing the house, but I am going to check into that.

My husband's student loan is on ICR, not IBR. I forget why that is, but he did put some research into it. They used to base his payments off our paycheck stubs. We set our business up as a sub s and paid ourselves as little as we could to keep his student loan payments down. This past September they also required our tax returns so they could see we also do draws from our business. I have almost been able to get our expenses down to only our paychecks, which total around $1800.00. Taking all those draws sorta felt like cheating to me.

effed

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Re: I think I am totally Effed
« Reply #24 on: March 21, 2014, 10:45:14 AM »
So I just went to Chase where my mortgage is and did some of their mortgage calculators. I am not seeing where that will save much $$$. If I refinanced to a new 30 year loan it will lower my payment by $100. After this year I want to take part of the $37K in investments and apply it to my mortgage, probably at least $25K and have it re-cast. $250 for that, as opposed to nearly $3000 for a refi. That saves $150 a month, plus $19K in interest over the long haul. I can't really do any of this until next year, though.

the fixer

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Re: I think I am totally Effed
« Reply #25 on: March 21, 2014, 11:58:05 AM »
Just pointing out that if all your husband made last year on day trading was $5k then it's likely he made less than minimum wage. He could do some kind of cheap work-from-home gig and do better than that.

electriceagle

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Re: I think I am totally Effed
« Reply #26 on: March 21, 2014, 12:48:01 PM »
May I make another suggestion? Ditch Chase and pursue a refi at a.credit union. If either of you have been in or have family in the military try NFCU or similar, otherwise look local. A $3000 fee to refi 60k of debt is criminal. No wonder Chase can pay its CEO in private islands.

Another poster had a good point about online jobs. If you can read and write the English language and have lots of spare time, you / husband can make $1000/mo on elance. Since it sounds like he is your caretaker, this may be more feasible than his getting a job outside of the house.

Also  you are not locked into your Obamacare plan. You can change plans within the same tier and insurance company until March 31st. (Only a partial victory, I know.) Can you find something with a lower deductible?


effed

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Re: I think I am totally Effed
« Reply #27 on: March 21, 2014, 01:57:15 PM »
Great idea, thanks! No military on either side, but I will look around locally. I would hate to give Chase $3000, again (refi a few years ago, and we paid it down by $20K at that time even).

crumbcatcher

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Re: I think I am totally Effed
« Reply #28 on: March 21, 2014, 03:05:37 PM »
I don't have too much more to suggest that hasn't already been said above, but, since the student loan debt was your husband's before you were married, you should be able to file an Inujured Spouse form when you do your taxes. This will prevent your share of any tax refund you might get from being garnished to pay back *his* student loan debt. I did that for several years back when my ex had a student loan in default.

Also, it sounds like you're doing a lot of planning ahead for when you'll be unable to sculpt, but have you considered doing something else related to your art at that point?  For example, teaching art students?  Or even taking on students/apprentices to produce pieces under your direction?  Maybe operating as a studio with other artists instead of as an artist yourself could be a way to transition to a different kind of revenue stream. If you have established a name for yourself in your area, it might be something to consider. A younger artist just getting started in a career might jump at the chance to work with you.

Welcome to the forum!

payitoff

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Re: I think I am totally Effed
« Reply #29 on: March 21, 2014, 03:22:07 PM »
How much will be the monthly payment on the student loan when it comes out of forbearance? is this still with Sallie Mae or is it with a collections agency now? if its with a collections agency, you can make arrangements with them to make low monthly payments for a year as a downpayment for a settlement. for sure they will have a settlement offer when this loan have doubled coz of compounding interest.  we have experienced this first hand, and now making payments on half of the total loan amount.  its worth the try, just ask, dont hide from them coz your investments might be in jeopardy now.


MKinVA

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Re: I think I am totally Effed
« Reply #30 on: March 21, 2014, 04:21:47 PM »
You only owe $61,000 on the house. Why refinance? And why do they consider your income on paying back his student loans? Isn't it just his income that's considered? Sorry to be so blunt, but I think you are making this a whole lot more complicated than it is. If the house is in your name and you can make enough to pay the mortgage, which should be pretty low at $61,000, what's your problem? I wouldn't debt up a nearly free and clear house with his student loans. If that's the only way, and I mean the only way, to move forward, sell the house!

GetSmart

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Re: I think I am totally Effed
« Reply #31 on: March 21, 2014, 05:28:45 PM »
It seems you're paying a lot for health care considering your income.  It may not work this way in CO but in my state if your AGI is below ~28k you qualify for the state subsidized health care which costs 0 and there's no deductable.  You might want to look into this.  So if you're saying that your combined income was 30k last year and if your 2013 taxes are completed you can have the state verify your income and they may adjust your coverage/ payment.

Also if you wanted to pay off your house could you not get a HELOC to cover the 60k balance at a lower rate than you are currently paying and use that to pay off the balance?  A local bank here has this option with no closing costs / no appraisal - just income verification and considering the equity in the house and other assets you should be approved for this.  I would try local banks before going to the big guys - they sometimes have more leeway. Not sure if that helps but it might lower your payment for what you have left - and I would still keep it in your name only.

effed

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Re: I think I am totally Effed
« Reply #32 on: March 21, 2014, 06:23:51 PM »
His student loan is NOT in default, it was with the US Dept of Edu until maybe a year ago when it went to the Vermont Student Loan something or other. He has always been very careful to not default on it. Making the ICR payments is totally different than defaulting, so there is no wage or tax refund garnishing. I agree with not using my mortgage to pay off his student loans. I do not know what his student loan payment will be when it comes out of forbearance because we hardly made any money last year, $6700 on our K1, that is after our paychecks though. We pay ourselves $1800 a month. Modify, we are on subsidized healthcare based on our guestimation of making $30,000 this year on the AGI. I thought $153 a month for both of us was pretty good, considering we were paying over $700 previously. We might even get reimbursements from making less than our projected income.

I am hearing everyone's suggestions and appreciate them all. I wanted to say that another symptom of my disorder is extreme fatigue, I am exhausted every day and that part only gets worse, too, so I doubt I will be able to pull off another career after this one. I really want my 'job' to be dealing with my disability because truthfully it is very overwhelming and difficult and I just don't feel I have much left over to try to teach or anything like that. But I appreciate the suggestions. I am very fortunate that I have been able to make a living with my sculpture, sometimes meager, but sometimes I did quite well. But it is almost time to say goodbye to it. That's just reality for me. I have done some digital sculpting, and that is actually very advanced these days, but the 3D printing is still too rough surfaced for my work, at some point there is still hands on sanding that needs to be done and as of now I am rubber banding my fingers closed to do sanding. It is very hard on my hands. I do keep my eye on that technology, though.

effed

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Re: I think I am totally Effed
« Reply #33 on: March 22, 2014, 09:01:11 AM »
Update: my husband said he is done with day trading and has put all the money in bonds and something else that only needs his attention once a month. I am feeling more hopeful. I think this is a classic example of one of the pitfalls of working at home, for some it is very hard to resist the urge to get distracted from your work. Oftentimes it is video games or roll playing, or online casinos, in this case it was 'fancy gambling' that fortunately my husband came out ahead with. Time will tell if he is really ready to stop and to re-focus on real life.

expatartist

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Re: I think I am totally Effed
« Reply #34 on: March 22, 2014, 10:22:37 AM »
Effed, I just want to throw you some [virtual] support and say, kudos for managing your art and your business as well as you have, with all that life has thrown your way. And also, I'm very happy to hear your husband is on board to tone down the day trading/gambling.

fixer-upper

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Re: I think I am totally Effed
« Reply #35 on: March 23, 2014, 01:15:00 AM »
You're allowed to make a certain amount and still go on disability.  I'd recommend reading the rulebook to see where you need to be in terms of income and hours worked.  If I remember correctly, the limits are in the neighborhood of 80 hrs and/or $1K/month.  Disability would also set you up for Medicare, so you won't be stuck with your current plan.

Since you can't do your job by yourself, your husband's wages can be figured as a deduction from your income.

effed

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Re: I think I am totally Effed
« Reply #36 on: March 23, 2014, 10:04:19 AM »
Thank you Fixer Upper, I hadn't thought about that angle! I have spent most of my life sort of ignoring that I am disabled, and until we signed up for Obamacare I had never received any sort of government assistance ever. My condition has worsened to the point where I am thinking about this stuff and finding out about programs and assistance that is there to help people just like me so that we don't end up on the street. Because who wants to see a bunch of homeless cripples, really :)

And that you expatartist for the support. I was feeling pretty down, but feel better today. I don't think I really made any bad financial decisions, I have living pretty prudently and it is the unpredictable nature of my disability that makes me feel precarious at times. If I did not have this disorder none of these issues would matter nearly as much. I think to be in my late 40s with no debt except a $60K mortgage is pretty good, my husband's student loan aside.  I have always worked in the art field, and since the late 90's have been entirely self employed.

little_owl

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Re: I think I am totally Effed
« Reply #37 on: March 23, 2014, 10:45:50 AM »
Update: my husband said he is done with day trading and has put all the money in bonds and something else that only needs his attention once a month. I am feeling more hopeful. I think this is a classic example of one of the pitfalls of working at home, for some it is very hard to resist the urge to get distracted from your work. Oftentimes it is video games or roll playing, or online casinos, in this case it was 'fancy gambling' that fortunately my husband came out ahead with. Time will tell if he is really ready to stop and to re-focus on real life.

Effed, I would love to have you and your husband invest a bit more wisely.  From your description, I worry that you may not fully understand what he has invested in, and it still sounds like you have a strategy in place to actively manage the portfolio (meaning, trading versus a buy-and-hold approach.). Unless you and your H have significant time and expertise, you are likely to be better off purchasing a nice, diversified mutual fund or ETF and simply holding that over the long term.

You have gotten some fantastic advice from other posters, as well.  Good luck to you and your family, and selling those big gas guzzlers will also be a great step for you....even if they are used infrequenty, you are paying insurance, registration, etc.

In regard to your art, are you selling on etsy?  A very artistic colleague of mine has a very nice shop there that has done well to keep her art in the marketplace, and introduce her to customers worldwide. Best wishes!

effed

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Re: I think I am totally Effed
« Reply #38 on: March 23, 2014, 04:38:00 PM »
I have a collector base I have built over decades, selling it isn't my problem :) It's the physical issues.