Family trying to get on the right financial track

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leschornmom

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Okay, My husband and I will have been married 10 yrs in January and we are now paying for poor financial choices we have made up to this point.
To make a very long story short we have decided to file banckruptcy. (A choice that we have lemented over for nearly 2 years now.) At this point the plan is to file in Febuary as recomended by our attourney. What we cannot decide on is the statice of our van. (Child # 7 is on the way.)
Should we re-affirm it or not? It is a piece of junk. I’ve been advised by several people that we should find the nearest cliff and roll if off. We owe way more than it’s worth, our warenty has run out, and we just missed the lemon law requirements. (By one repair)
On the other hand, with us planning on filing…I don’t know when we’ll be able to get financing for another van large enough to fit our family size. So that means we could go as many as 6 mos or more before I could leave the house with my small children (all age 8 and under) durring the day. That means Dr, and Dentist appoointment are out. Play dates, home school group, and even basic grocery shopping will not be possible. That’s not to mention the fact that I am pregnant and have OB appointments to make. Or what if there’s somekind of emergency with one of the kiddies? How do we all get to the hospital if I’m the only one at home with them.
My husband thinks it would be wisest to get rid of the van for a while and do with our junk car and his newer car for the time being. He says that with money we’d be saving on payments and insurence we would be much better financially. But he has left it up to me “knowing that I’ll make the right choice”…Thanks Hubby!
Which is the right thing to do? Do I keep the van that is undependable (at least I’d have transportation if necessary) or am I being selfish. I am comitted to helping my family get back on the right trck finacially but is going without a vehicle in my situation really an option?
Please spare me the lectures on the evils of banckruptsy we’ve been dealing with that ourselves for a long time I just need oppinions as to what to do with the van?
 
Have you talked about this with your attorney? What does he/she say?

I don’t have any advice for you, but my prayers :). Bankruptcy is difficult. My parents declared bankruptcy a few years ago after over 20 yrs of not so great decisions and things that happened that were out of their control. They paid off all that they had to pay off and are finally starting to come out ahead. I hope you are able to get through this :). God bless!
 
You always have the nicest replys.

Our attourny has left this part entirely in our hands. As for our family… We’re fine, its a little challenging and A LOT embarasing. I’m just glad that we’re learning these lessons now, while we’re young. We’ve already began implenting ways to teach our little ones about fincial resposability. Our hope is that they won’t make the same mistakes that we have.
 
If there was an emergency, is there anyone who would watch the kids so you could take the sick child(ren) to the hospital? Is there someone to supervise so you can make OB appointments without using the van? If there isn’t anyone (and be honest . . . I don’t know many people who would take on 5 or 6 children under 8 at once!), then keeping the van seems to make sense to me. Having a reliable vehicle would be great, but having a vehicle that fits all your kids safely is important too, even if that means sacrificing reliability. It’s a tough situation, no doubt. I will be praying for your family too.

MJ
 
Isn’t your van included in the bankruptcy? I know they changed the laws a year or so ago, but when my parents filed (about 8 years ago) they were able to keep the cars without any problems…

Do you owe a lot still on the van?If you do then i would say just keep it, unless you think you could get some money if you sell it. What year make and model is it? Perhaps you could even trade it in? Vans seem to be cheaper than SUV and cars at least here in PA:)
 
My husband thinks it would be wisest to get rid of the van for a while and do with our junk car and his newer car for the time being. He says that with money we’d be saving on payments and insurence we would be much better financially.
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What I’m reading is you have 3 vehicles? The “van”, an “older/junk” car, and his “newer” car?

Define “junk car”, and “newer” car.

Get rid of the “newer” car, divert the payments towards necessary repairs on the van and the “junk” car. You’re probably having to carry full coverage on the newer car, so these funds could also be diverted to the other vehicles. Strip your insurance coverage down to “Liability Only/State minimums” on the two vehicles. Also change your policy and jack up your deductible.

With your family size you need the van. The van also has to be dependable & safe. If DH only needs to get back & forth to work why wouldn’t an older car suffice?
 
Please go to the library and check out the book called “Total Money Makeover” by Dave Ramsey. It will offer a lot of motivation and common sense suggestions. I also hope that reading it might help you to see how you got where you are today - reveal all of the poor financial choices that you’ve made over the last 10 years. And, hopefully, would help you retool your habits so you won’t be back in this mess in a couple of years and NOT have the option of backruptcy.
 
I would have to agree with Jay2, that if it is possible, you should sell the newer car, and use the money to pay off/ make repairs on the van. My husband currently drives a 1988 Ford Thunderbird that we paid $300 for a year ago, and we hope will last at least another year. It does not have heat (in Wisconsin), or AC, and there is an unrepairable hole in the exhaust that makes it roar, and he gets some flack about at from the guys at work, but it runs. He really feels that it is important that I have a vehicle at home during the day that is safe and I can get out of the house if I need to, especially if there is an emergency, but also just to run errands, etc. If his car were to break before we can afford to replace it, we plan to to go with just the minivan, and I will drive him to work in the morning and pick him up in the afternoon, unless I don’t plan to go anywhere that day.

Of course, something like this may not work for you, just my :twocents:.
 
AlaAnnie said:
Please go to the library and check out the book called “Total Money Makeover” by Dave Ramsey. It will offer a lot of motivation and common sense suggestions. I also hope that reading it might help you to see how you got where you are today - reveal all of the poor financial choices that you’ve made over the last 10 years. And, hopefully, would help you retool your habits so you won’t be back in this mess in a couple of years and NOT have the option of backruptcy.
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If you read her original post, you would see that she wasn’t looking for this advice. She already knows how they got where they are and IS taking steps to make sure it doesn’t happen again AND is teaching her children how to be financially responsible so they don’t make the same mistakes.
Do you have any helpful advice on what she should do about transportation for her large family?

Malia
 
i don’t know what state you are in but i would be careful about a junk car…especially if you live in a state where you cars have to pass inspection…and if you don’t pass then your not able to drive your car legally.
 
Hubby seems to have some 'splaining to do on why he needs a newer car while mom gets trapped at home with no ability to transport the clan around. Is this a minivan or a full sizer? Local high schools or tech schools sometimes offer courses on auto repair and maintenance. If mom has enough energy left to survive putting kids to bed on her own two more nights a week, dad might be able to take a night time class to learn to do his own basic repairs and maintenance on a full size van. Those things are pretty preshistoric in design and don’t require a phd to do repairs to.

In any case, it saves a LOT of money to know as much about cars as you can and to do as much work on it yourself as possible. 1. It saves you money up front. 2. You learn to recognize problems when they are small, cheap and simple to fix. 3. Mechanics can smell who is clueless and who knows a few things - Guess who gets ripped off?
 
Don’t know if the rules are the same, but my parents filed for bankruptsy several years ago. There attorney told them to sell their old cars, and buy brand new ones - on credit. The reason being that once you file for “B” your credit will be bad for 7 years. So you need to have a car that will last you 7 years.

If you pay your car payments, and you owe more than the car is worth, then there is nothing to reposess, and it is therefore not part of the bankrupsy. So you get brand new cars, on credit, and make those payments only, then file for “B”, and keep paying the car payments. This will help to establish your credit after the bankrupsy, as well as providing you with cars that you need during that time.
 
If my credit is bad enough to file for bankruptcy, how can I buy new cars before filing?
 
We’re in the same boat. DH and I have no choice but to file bankruptcy after lamenting over it for a couple of years now too. We simply don’t make enough to support a family of 6 right now and our taxes, utilites and cost of living is just more than we can handle. We lived on credit cards for the last few years as a result. Now we’ve learned some things that we didn’t know in the past and have a better plan to manage the little bit of money we make (we have no savings still but hope to).

We went through credit counseling and discussed our options with a lawyer as well. The best plan for us is to wipe the slate clean and start fresh without the debt burden on our backs. Our debt was racked up to pay utility bills, gas, and food bills, car repairs, dentist visits, etc. At least I can say we didn’t get into debt to try to keep up with the Joneses. We are where we are because we had to survive.

DH has sought long term employment for years, we’re both working and trying to go to school while raising 4 young children ages 1-12…

We’re locked into a 15 year lein on our home for work we had done 2 years ago. Between what the grant cost and the money we still owe on the mortgage it’s about 60K…houses on our block average about 35-40K when sold. We can’t sell to move yet or we’d be out of at least 20 grand so we have to wait a few years until the % of money we owe on the grant is lessened and the mortgage is paid down.

We are able to keep our van and when we get our income tax this year it won’t go towards a credit card payment as it had in the past years, it will pay off what we owe on the van and we’ll drive it until it’s in the ground. I don’t want another payment for a while.

We also don’t have the money to afford 2 vehicles. DH takes the van to work and I’m home all day, every day with the kids, except for when I have to go to work. I make appointments around DHs lunch break. He notifies work a few days ahead and they’ve been very flexible with him. DH has no benefits at his job, no sick days or personal days. When he loses a day of work, we lose a day of pay. But sometimes it can’t be helped when we have things to do. There are a couple days a year that we schedule things all at once and he’ll take a day off just to get things done so he’s not always asking for an extra half hour for lunch or to leave an hour early or go in an hour late to accomodate appointments.

I know it’s hard to not have a second car especially when you have so many little ones. They want to go out and play, interact with other children and you need time out too. But sometimes their own backyard or neighborhood has to be their playground.

When I was pregnant last year with #4, I always made my OBGyn appointments at the latest part of the day so DH would only lose an hour of work to be home to take me (that is when I got to the point where he wouldn’t let me drive anymore 🙂 ). He would be with the kids or if mom and dad felt okay they’d watch the little ones for us so DH could take me.

Things always worked out somehow and they still are.

I wish you all the best of luck and may God bless you as you go through this difficult time.

Kelly
 
Ditch the van. Keeping it would be a good decision for your short term transportation problems but bad for your long term finances. It has no warranty. That means you will be dealing with repairs throughout the duration of the contract. It is a lemon. Your eventual trade-in or resale value will be nil. That means you will have to set aside a lot of money for a down payment on your next vehicle, which will be tough with all the repairs. You can be reasonably certain that you will have to replace it before your BK is complete. It is already upside down. That means you will have to make extra payments to the principle so that you won’t have the balance added to your new contract. Add in the higher interest rates due to the BK and its bad all the way around. The cost of keeping it is too high.

Before the BK, trade in hubby’s newer car for a vehicle that fits your whole family. Buy new. Not sorta new. Not kinda new. New. That way you know you have many good years to drive it without worry and a factory warranty as backup.

When you file the BK, lose the payment on the unreliable van and reaffirm the debt on the new van since you know you can make the payments. More than that, it will be worth the money you pay.

That leaves hubby either driving the junk car to work or figuring out another way. Ride share? Public transportation? Whatever. It is a lot easier to come up with solutions for one person than it is for 7. Also, it will be a whole lot cheaper for you to save up some cash and buy a nice looking little work car than it would be for you to save and buy something that will fit your whole family. Yikes.

I think this is the best decision for your long term financial well being.
 
I would have to say get rid of the newer car. You would be spending more money going places as a family by always having to take 2 cars. Even going to Mass you’d have to take two cars. The price of gas is so unstable. Is there anyway to sell all three vehicles and have enough money to buy a better van? Then just get by on one van. Can you make your OB appointments in the evening (if your husband is home from work) so you would have a vehicle? Or does he have sick time he is allowed to use (not the whole day but an hour or so) for family doctor appointments? So he could stay home w/ the kids and you can get to the doctor w/o having to bring all the children. I think it would be very difficult to get by w/o a van (and I only have 5 kids). I’ll pray for you I can’t imagine how difficult this is.
 
Feanaro_s_Wife said:
If you read her original post, you would see that she wasn’t looking for this advice. She already knows how they got where they are and IS taking steps to make sure it doesn’t happen again AND is teaching her children how to be financially responsible so they don’t make the same mistakes.
Do you have any helpful advice on what she should do about transportation for her large family?

Malia
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To answer how reading TMM can help with the car situation. It doesn’t directly. What I read in the OP are these:
  • They are in financial trouble in a big way
  • They are faced with a large-impacting financial decision - what to do about the van currently characterized as junk
  • OP’s spouse has pushed the van decision off on the OP
Now, what benefit I see that the book could provide:
  • It will address the fact that they should be making all financial decisions TOGETHER. (This woman is carrying enough burden just taking care of these babies.)
  • It will provide a simple set of steps to help them focus on what their financial priorities should be (in accordance with their own needs)
  • It will encourage them to get on a do-able budget so they can get themselves in a position where a car emergency isn’t a financial emergency as well.
  • And, it MAY offer some solutions to where bankruptcy is no longer necessary. Thus the dilemma of how will they will obtain financing for a different vehicle after a bankruptcy becomes a moot point.
It just seems that the transportation decision is a symptom to a larger problem that I don’t agree is solved yet. Otherwise, they would know what they need to do about the transportation without coming here to ask for advice. We really know too little about the situation to offer any kind of rational advice. We don’t know how much they owe on all of their vehicles. We don’t know how much these vehicles are worth. We don’t know what they can afford to pay now or on a different vehicle. We don’t know which type of bankruptcy they are planning to file. We don’t know their credit rating to have any idea of what kind of financing they might obtain. I was only offering a solution which would instruct them how to figure all this out themselves. She did title the post “family trying to get on the right financial track”. I apologize for not elaborating my reasons in my first reply.
 
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