This is a great forum. Found it yesterday out of desperation (almost!).
I am a school teacher who is looking for a job. I know I will probably get one with the county in August. I HOPE...BUT...
This is my situation:
I have NO savings
I am on vacation from school (Summer) and working for a nursing home, no money from school at this time.
Three kids 21, 19, 18 - all going and paying their college - no $ to help me. They all live with me and attend school locally.
My mortgage is $1,200 a month (it is late for the past month - they gave me a deferrement 'till September 1st for the months of July and August).
The house is worth 245.000...I owe about $160.000
I have NO car payment, but I owe student loans (Sallie Mae - $33.000).
I owe $32.000 in Home Equity Loans
I owe $6,000 in credit cards and about $3.000 in medical bills.
The Home Equity Loan people call me every 3 days since I have been paying "what I can"...
My question is: Should I sell my house? (I have not been able to sleep thinking that I might lose the house if I do not pay all these bills).
I have been calling schools to get a position for 2007-2008 and studying to teach different subjects, therefore, opening opportunities.
Sometimes I think that even with my school wages starting in August I will
still have to work 2 jobs the way I have been doing. I will be 49 years old and divorced for 14 -- getting tired! What should I do? Does my situation seem "dark" from your point of view the way I see it from here? I need advise...

I hope we can all give you some good things to consider. It sounds like you are pretty worried, and rightly so. Maybe having some thoughts thrown out will give you some peace as you consider your future.

I think you need to do some things right away (today!).

First, you need to have a family meeting and make sure all the kids understand the severity of the situation completely. They could all be living on the street very soon, or paying for their own place, if they don't find a way to chip in now. Since they are all adults, there is no reason they should not be participating. Just because you are the mom, you have done your job in raising them and it is now time for them to be part of the solution. Each of them should have a job by the end of the week and be ready to help out.

Second, take the day with your kids and go out and see what is available to rent, and for how much. This could be a real awakening for you all. In todays market, $1200/mo. is pretty low cost housing for many areas.

Next, talk to a mortgage professional about a stated income loan. Include your expected income. Review the numbers and what debts can be wiped out to create cash flow. With an 80% LTV (Loan to Value), you are close to paying off the mortgage and the HELOC. This gives you a fresh time clock, and possibly a lesser payment than the two together. Ask about ALL options. Since this is a short term problem until you have the job in place, you may find you can reduce your monthly expense with an interest only loan, a 40 or 50 year mortgage, or even a negative amortization. There are "power option loans" with a 1% or 3% interest payment, although the rest of the interest accumulates. You should only consider these because of the fact your income will be changing and you can redo the loan before adjustable rates get out of line. If your credit was good prior to now, your FICO score may still be OK to do this, but it won't be for long.

Ask the mortgage pro about a full doc loan and the possibility of getting a 95-100% loan. Although this sounds unlikely, this would give you enough extra cash out to get rid of the credit cards and medical bills, plus have a bit of a rainy day fund. You need that right now.

If a new mortgage is not available as an option, and you cannot generate enough cash between you and the kids, you need to put the house on the market immediately. As long as you get 200K, you can walk away from the loan and HELOC without a problem. If you can get close to the 245K, you have enough for paying off the CC's and medical and still have 30-35K for a new start. Don't worry about the student loans for right now, in fact ask them if you can get a hardship deferral for the next several months until you are working in your industry and get settled.

Now it is time for some decisions. The worst decision is to do nothing, hoping it will somehow go away-it won't. The right decision will be discovered as you find the answers from above.

If each of the kids will commit to contributing $500 per month (which they will be paying anyway for an apartment, gas, lights, etc.) you may be able to stay in your home since the mortgage holder has given you a couple of months. You have until then to make a large payment or two on the HELOC and get them off your back. Medical will generally take small payments and may even be able to discount the balance partially.

If the kids cannot get involved, or would rather move out, selling may be your only realistic option. Look for a small one bedroom apartment until you can get situated and wish the kids all the best in their search. You may even look for a shared rental with another teacher you could move in with.

It is not easy to start over, but once you have addressed these issues and made your decisions, you will probably start to sleep better.

P.S. At 49 and starting over, keep your living expenses to an absolute minimum as you put away as much as possible into a retirement fund. You will probably have a 401k or 403b at your teaching job. Be sure to get the maximum matching funds. If you have additional money, consider opening a Roth IRA account with an investment adviser, putting it into a fund with good growth and security.

Some great comprehensive advice, Dru!

I think that you have been given great advice from the poster above. I would like to add that your children do need to be told exactly what is going on and how bad it is. I know we don't like to tell our children about financial trouble but yours are old enough to be told and to help out in anyway that they can. Good luck to you and please come back if you find it overwhelming or need any other help.

I'll have to add my two cents here and also say that there's nothing really I can add to what's already been said. I hope you tell the children what the situation is. Even if there's some reason they can't help with the income, they can certainly take steps to be more frugal, I'd think, and help in that way. Can they apply for aid of some sort for college?

I feel for you. I hate being in debt. Good luck with your problem and hope it all works out, im sure it will.

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