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How bad should things be before bankruptcy

Posted by keck (My Page) on
Thu, Dec 15, 05 at 18:32

I know the bankruptcy laws changed, so my question is how bad should things be before declaring bankruptcy and is it even an option for us? DH bought a business a year and half ago and its not going well. He is great at what he does, just not the business part. I work full time and am the primary earner. He owes 5.5 years on the business loan, secured by our home, so we can not sell it - there is no equity in it. We have lots of debt - student loans, credit cards (due to medical and business costs - majority is my credit card and SL), a business loan and we recently sold 2 more expensive autos for cheaper ones (a Mazda small truck for DH that he can use for work and a 4 cyl car for me - both 3 years old). I am not expecting a substantial raise and DH seems to be making less $$$ every time I checked. I asked him to get a part time job at night for when he doesn't have work lined up but he just keeps telling me things will be OK. He didn't get his taxes done on his business or personal so I don't even know how much we owe...I am guessing 5k...I keep asking him to get them done. If I knew who the accountant was that has the records I would call him, but DH just gets mad when I ask. We will probably owe another 5k in taxes for this year too. I don't know if I should just file seperately even though it will cost us more or not. My credit card interest rates are pretty low - under 6.5% fixed - some are 4% fixed. But DH doesn't seem to pay his on time and his rates are closer to 15 or 20%. I am not going to balance transfer his to my better rates - I did that 25k a few years ago and he just ran them back up. I don't know what to do. I don't think we would be eligible for bankruptcy because of our income. I have decreased expenses where I can - shut off the home phone and ADT, switched to cheaper cable and internet (we can deduct that - if we ever file our taxes - DH has to have high speed for work), bought cheaper cars with better gas mileage, turned down the heat to 65. I am trying to contribute to my 401(k) as my company gives me a 50% match. I am trying to decrease pet costs but our two dogs have allergies and I am not giving them away. Its seems whatever I try doesn't work. I try to tell DH we don't have $$$ for him to buy new clothes and I need him to cut out all unessecary expenses and to quit using his credit cards but its not working. FYI - his parents have the same problem he has with managing money. I have to admit I have been sucked in by it too...until I realized we were spending money we clearly do not have. Suggestions?

Here is our expenses, annualized:

Pay yourself first 401 (k) account $4,800.00
Other savings $1,200.00
Rent/mortgage
Monthly payment $20,328.00
Condo/neighborhood fees $300.00
Food
Eating out $1,560.00
Lunch at work $780.00
Sodas, snacks at work/school $78.00
Stops at convenience store $156.00
Fast food $260.00
Groceries $5,200.00
Coffee, etc.
Gourmet coffee, lattes, double mochas, etc. $30.00

Clothing
Planned shopping for school, work $500.00
Shoes
For self $50.00
For spouse $50.00
Holidays
Gifts plus mailing costs $500.00
Travel $260.00
Decorating $100.00
Cards plus stamps $25.00
Gifts
Birthdays $300.00
Anniversaries $100.00
Other - Mom, Dad $300.00
Movies
Going to the movies $150.00
Renting /Buying movies $84.00
Communications
Cell phones $180.00
Computer expenses
High-speed internet access $600.00

Television
Cable or satellite TV fees $240.00
Automobiles
Car loan payments $7,200.00
Gasoline $1,300.00
Car washes $50.00
Oil changes $160.00
Other maintenance (tires, new batteries, etc.) $100.00
Body upkeep
Massages $130.00
Hair cuts and color $270.00
Pets
Vet bills $300.00
Toys and collars $50.00
Regular medicines (flea/tick preventative, heart worm) $304.00
Food $1,500.00
Credit cards
Monthly minimums/Paydown balances $16,800.00
Other loans 401k $3,816.00
Home Maintenance
Utilities (gas & electric) $3,917.16
Yard service $60.00
Garden/lawn plantings, etc. $50.00
Financial obligations
Property taxes (dont count if in house payment above) $600.00
Auto insurance $1,800.00
Life/disability insurance $1,200.00
Other
Medical expenses
Health insurance $2,100.00
Medical costs $2,500.00
Charitable contributions
Donations $50.00
Reading
Books, magazine subscriptions $50.00
Other untrackable expenses $500.00
taxes on business $5,000.00
TOTAL EXPENSES $87,938.16
TOTAL INCOME $78,134.00
WHATS LEFT -$9,804.16

Debts
Credit Cards $60,000
Student Loans $95,000
2 Autos $20,000
401(k) loan $3,000
mortgage $225,000
Business Loan $55,000


Follow-Up Postings:

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RE: How bad should things be before bankruptcy

the BEST thing to do is to quit contributing to your 401 and instead pay down the debts. but first, you need to have a heart to heart with your husband and make him see that this has to change.

cut out the massages, get your hair cuts at home, either sell the vehicles and pay CASH for older ones or pay them off with the 401(k) contributions you normally make. shop around for cheaper insurance, auto/life/health.

a startup business will not turn a profit in under 3 years in MOST cases. you both should have planned for this ahead of a time.

BTW, i feel your pain. My financial situation is not as bad as yours, but we are living paycheck to paycheck right now due to some medical bills.


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RE: How bad should things be before bankruptcy

Thanks for the ideas. I get $7 hair cuts from a lady I know (vs $50 at a shop) and DH gets $10 from a place that just does hair cuts for men. I can cut out the massages - my work does pay 1/2 - I have terrible arthritis in my neck and that does help me not use as much pain killers, but if that is what I need to do I will do that. Really, I looked for the cheapest decent vehicles I could find. I drive 60 miles everyday and have no family nearby so it has to be reliable. DH has to have an extended cab truck for his business, so I found him the cheapest extended cab one I could that wasn't falling apart or had 100,000 miles on it. I tried to find ones that would let us pay them off and still have 3 years of drive on them. He drives about 30k a year and me about 20k a year. We sold both of our vehicles and bought ones that cost 1/2 as much and got almost double the gas mileage. I have shopped around for insurance and that is as cheap as I can get it. Health is thru my work and I did look privately as I had read that sometimes if you are younger it can be cheaper, but it was actually more with less coverage, which doesn't help as I have a lot of medical issues - chronic pain. Here is the thing with the business - he bought an existing profitable one that had been in business for 10 years. We should be bringing in 20k more profit...but he lost a lot of clients. I feel dumb because I should have known that he wouldn't be able to do it - he is good at what he does, but sales, customer service and financial mgt are not his thing. Clearly we don't have $$$ to hire someone to do those things, but I worry if we don't get someone its going to go under. Are you sure stopping the 401(k) is a good idea...I would be throwing away about $2400 a year in match and would owe more in taxes. I worry that if I took that 4000 or so I contribute and use it to pay down bills he will just charge them up again, so I would still have the same debt and will have nothing in savings. For awhile (before the business) we were making about $30k more than we do now and I felt we were getting somewhere with the bills. I put both of our Student Loans in forebearnace but I don't know how long they let you do that.

What about the taxes - it keeps me up at night. What should I do?

BTW - we have been married for 9 years and together for 11. I have talked with him so many times about our finances, we even went to a personal finance evening at the community college. Its not getting thru and I am not sure it ever will. If I didn't truly love him I don't think I would stay any longer.


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RE: How bad should things be before bankruptcy

Do NOT quit contributing to the 401 K unless you want to be an old woman with no money. You can pay down debts at the same time, but not investing in retirement is foolish.

Look at what you are spending. Stop the eating out. Cook at home. Stop the lattes. Read a book from the library rather than spending over 200 a year on movies and rentals. 500 for clothing? Wear what you have. This list of non-essentials is pretty large.

Massages? Oh, please.

You live at a level you can't afford. That is not reason for bankruptcy. Look at last years tax return and find out the name of the preparer. Call them.

If the DH won't go then go to the consumer credit counseling service and get a plan. Being childish with funds is just no excuse.

Sorry to sound so harsh, but looking at that list of stuff you spend, spend, spend on is a bit much for me.

Gloria


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RE: How bad should things be before bankruptcy

Keck, first I want to say I am so sorry for your situation. I admire your willingness to put so much personal information out there for others to comment on.

Gloria above has a lot of wisdom about things, and was probably rushed into being a bit abrupt.

I had a friend who had to divorce her husband in this same type of situation. With the business loan secured by your house, you are in a very precarious situation, and I think you know it.

I think you both need to go to financial/bankruptcy counseling. Finances are the #1 root cause of divorces, and divorce tends to make people poorer, not freer.

I'll try to return to this later. My hubby needs the puter.


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RE: How bad should things be before bankruptcy

if you do not cut out the 401 all together, at least cut the contribution. this will give you the best of both worlds. your credit card debts and loans likely have higher interest rates than the return on the 401(k). if you pay them off first, then you can go back to putting away enough money for retirement.

even though he bought an existing business, it is not much different than starting out fresh. when ownership changes, customers leave. plus, the business did not have the added expense of the loan before he bought it. My dad has bought and sold MANY businesses over hte years, that was his main job at the company he consulted for, and he even says that it is rare for a business to turn a profit the first 2-3 years even if it were profitable before you bought it. new owners spend money to get things how they want it, old customers leave, the business loan to buy it, all these factor in to the loss the first couple years or so. Out of nearly 50 different stores he bought for a company, only 2 remaned profitable at first. they all came back to profiting, but the first couple years they did not.

he needs to find ways to cut expenses at work so that the business becomes closer to profitable. he may have to fire a person and spread hte load over the remaining people. that alone would almost cover the loan note. it may even require that he be the only person working there. he can forward the phone to his cell, or just buy a cheap answering machine for when he is out of the office.

if you have to, sell the house and find something cheaper. if you have any equity, it could go a long way towards paying off some of your debt. worst case is you could use the profit fromthe house to pay of the business loan.

since he does not seem to handle running a business very well, why don't you take over the books for him? my parents both handle the family business not the one my dad worked for but the one he owns. He runs things, and she pays the bills and does the financials. is this a possibility for you?


if you have not done so, CUT UP ALL CREDIT CARDS! the only way you can pay them off is to quit spending on them. get 1 new card with a decent limit and put it in a safety deposit box at the bank. this will give you access in case of emergency, but be just enough trouble to get to stop impulse spending. My wife and i had to do this, as every time we paid off a card we ran it back up. plus the SDB is a great place to keep the loan papers and other important items.


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RE: How bad should things be before bankruptcy

You wrote:
" I worry that if I took that 4000 or so I contribute and use it to pay down bills he will just charge them up again"
He'll do the same even if you declare bankruptcy. You say the cards are in your name? Cancel them. Cut him off as much as you can. He is obviously not managing, you MUST take over and put your foot down. On his head if possible.
It sounds like you are trying, but need more encouragement. Too bad if he gets mad that you want to talk to the accountant. DO IT! Don't wait for permission.
Sorry for your dilemma, Christmas is stressful enough without having to worry about bankruptcy.
Good luck.


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RE: How bad should things be before bankruptcy

No offense meant....

But did I read you guys have a combined $95,000 in school loans? And your annual HOUSEHOLD income is $78k?

Ummmm....I'm scared to ask, but did all that money actually go to tuition?

It just got me to thinking that the "living beyond the means" thing has been going on for a while...

Also, what is his business? You can tell us the general type or whatever. Might shed some light on what it is likely to finally end up as, etc.

I agree with all the other things here about how to cut things, BUT I wouldn't do them right now until you deal with your hubby.

#1 protect yourself
#2 protect your marriage
#3 protect your business

In that order!

So, if hubby's putting his head in the ground, I agree with others...have stops put on all of the cards, shut off or eliminate whatever you do have control over.

I would avoid closing all the accounts if you can avoid it though...this can actually harm your credit score, which might prove important in the rebuilding phase.

Regarding hubby's denial, I hate to say it (I'm a guy married 9 years) but I watched my mentor's husband drag their family right into bankruptcy this way. He had a thriving business and then decided to branch out with a business partner. They got overextended and made one bad decision after another. By the time my boss/mentor found out the extent of it, it was all she could do to save her house. They lost virtually everything else: they were left with their clothes, a couple beds, and their home. All because he was too proud to say "I screwed up and am over my head."

Of course now that she's recovered everything and he's had a career change, he'll happily admit it.

Good luck!

aiki


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RE: How bad should things be before bankruptcy

aikidokap,

Regarding your mentor's family financial problems due to unwise business decisions.

Sometimes it's hard to see the forest for the trees.

ole joyful


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RE: How bad should things be before bankruptcy

Yep 95k in SL...before the business we made over 100k. Its 78 after taxes not before...before taxes it about $90k We are young, so I do feel our income hasn't "caught up" - atleast mine. Most of it is for my advanced degree that I received a few years ago...tutition was about 25k per year. I do think in the end it will pay off...its just not right now. I had to pay for college all on my own and its not cheap...but without it I would probably be making $5 an hour.

I work in an office so I can't just wear Old Navy to work...I do try to buy things at places like Kohls and Target on sale. I did go to the bankrutpcy website and it actually shows closer to $3k for clothing allowance per year and infact everything but in housing we are under the "allowances" and for housing we are over by only about $100

My massages aren't insane...my work charges $5.00 - I have terrible arthritis and chronic pain due to an auto accident where a guy ran a red light. I have had to go to the ER a few times because the pain was so bad...did epirdural injections...did PT...there is nothing left to try. Its either that or take narcotic drugs, that cost more than the massages and I am scared to take them - I was taking bextra, celebrex and viox (not at the same time) and after that ordeal I am scared to take many drugs. Plus the narcotics knock me out to where I can't function...also why we have a lot on credit...medical bills that insurance didn't cover. I could go to PT but my copays are $15 vs $5 for a massage and the massage seems to work anyway, most of the cc debt is from bad luck not overconsumption. When I look around I don't see 60k worth of "stuff" which is the part that sucks so much.

I have looked for a cheaper place to live...spent months looking. We bought our house almost 6 years ago...housing has went up close to 50% since then. We have no equity, so I would be out if I sold it and then would have a larger payment for less of a house. Rent is higher.

Gloria, I appreciate your honesty...especially about the 401(k). It was hard to read some of your statements...I am not thick skinned even though I try to be and I wanted to just close my browser and never come back. I do agree on the movies and books. I was just trying to show what I realistically have been spending, not what I wish I was doing. I wish that we didn't spend any money on anything but our bills, but I know that will not happens so why present that plan.

I know I sound like I am scared of DH but I am not...I am in his face about this but I guess I lack the follow thru to leave if he doesn't get it together. He always promises but...
I don't know who the accountant is because I did the taxes the year before we bought the business...with the business he found an accountant and took the books to them. So, I have no clue and he will not tell me. I just might file seperately because it keeps me up at night. I have canceled his cards before and I had all of our cc debt paid off 6 years ago. Then he got himself new cards and it started all over. Then I got a HELOC to pay those off (dumb on my part) and transferred his balances to my cards since I had low rates...and we are right back where we started. Its a photography business that I do think could be very succesful but its just not going that way right now. He needs to be finding new clients (he mostly contracts with schools)...epsecially for summer since he has nothing lined up in summers. He has no employees so we can not cut there...he needs to generate more revenue..cutting costs won't help...they are already low as he works out of our house.

I plugged in the numbers that the bankruptcy court uses for a family of two in my area:

Annual
Food
Groceries $8,292.00
Housecleaning Supplies $1,296.00

Clothing
$3,312.00
Auto costs and mainteance (2 cars) $14,964

Personal Care $852.00
Home Maintenance
Utilities (gas & electric) $3,600.00
Misc $1,608.00

I do appreciate your help and I am contemplating trying to work a second job...somehow. I get home at about 7 pm every night and have to leave at about 6 am for work, so I don't know how I can fit it in and the part time ones I see are for mimimum wage. I posted on a bankruptcy forum on yahoo and they all think I should have filed months ago...so I might set up an appt with an attorney to see what his/her thoughts are.


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RE: How bad should things be before bankruptcy

I can't offer any wisdom on the bankruptcy -- but I do think both you and your DH need to take a long hard look at your relationship.

Keck, there were a couple of things you said that just stood out like flashing neon signs to me. First, the fact that your DH changed accountants and refused to provide you with contact info or additional info. God forbid your DH is suddenly taken ill...what are you supposed to do THEN?

Next is the fact that you cleaned up the credit once, only to have DH open new cards and get back in the same hole.

I know you've said you love your DH. You must feel he loves you as well. However IMHO he is showing you ZERO respect. Others before me have said it already...he's developed a pattern and doesn't seem willing to change it. Keck, how many years are you willing to live your life feeling like you're on the edge of ruin? I also really have a strong hunch that even if both of you were making more $$ your lifestyle/expenses would eek up just beyond that income.

Keck, I know you have a short term immediate issue to address. Beyond that though, I'd really suggest couples counciling and possibly the councilor could suggest a financial council.

Sorry if this is intrusive...and I apologize in advance for throwing out suggestions where advice wasn't requested. I just really see some problems other than the immediate financial ones.


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RE: How bad should things be before bankruptcy

Seems like there are a couple of steps you need to take:
1.) SEPARATE YOUR FINANCES: Your DH has a problem as real as an alcohol or gambling addiction. You need to protect yourself at this point. Separate your finances so your credit doesn't tank and so you can stay solvent financially. Also you are enabling him to continue down this path of destruction by continuing to bail him out over and over. If you file Bankruptcy now it's just someone else bailing him out. He has come to rely on the fact that if he spends like crazy wracking up lots of debt it won't matter, because SOMEONE will come to his rescue. He hasn't learned any responsibility and will just repeat his mistakes. He needs to be held accountable at some point in order to learn his lesson and change his ways.
2.) FINANCIAL COUNSELING! He needs to get help immediately... and so do you.
3.) SET LONG TERM FINANCIAL GOALS: Work with a financial advisor to set up goals that can work for both of you.
4.) SET A BUDGET: And stick to it! Work with a financial advisor to set one up. I would take a little less out of your monthly 401K donations [don't stop all together] to use toward paying down your debt. That should be the #1 priority. Housing second, then utilities. Can you share a car? Can one of you use public transportation? Also it's not crazy to "need" a massage. That's a priority to you and it should be budgeted in. Also make a very small allowance for "mad money". Budgets are great, but human impulses can be overwhelming. So don't spend this portion of the budget until you can't stand it anymore - once a month go splurge on a latte and a new book at the cafe. [Agree w/ yourself that you won't buy another new book until you've finished reading that one - and when you are done with it - sell it back to a used book store]
5.) FILE YOUR TAXES SEPARATELY: If your DH jumped off a bridge would you? Protect yourself. Just because he's going down in a blazing ball of financial ruin, doesn't mean you should too.
6.) CONTACT THE IRS: I know this sounds like tattling on your hubby. But in the long run you may be protecting him from some jail time. Communicate with them to see what can be done about your DH unwillingness to pay his taxes - better to get him on a payment plan that just avoiding it all together.

Good luck.


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RE: How bad should things be before bankruptcy

keck,

I am troubled.

You bought your house 6 years ago.

Its value has increased 50%.

But you have no equity in it, despite having made mortgage payments as required.

How come?

It's none of my business - but I wonder what happened to that increase in equity.

ole joyful

P.S. When I was a personal financial advisor - I hated to see my clients hurting.

o j


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RE: How bad should things be before bankruptcy

I'm sorry, but I have to wonder how serious you are when you are contemplating buying new furniture. Keck's thread on decorating forum


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RE: How bad should things be before bankruptcy

I'm with terriks. I read your thread in decorating forum and said to myself "can't be the same person," then switched here and realized it's the same person.


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RE: How bad should things be before bankruptcy

I think it would be easy to cut your expense down to where you could live on your income. And I think that any bankruptcy court would agree. I agree that cutting up the credit cards would be a good start. Then, stop eating out, renting movies, really, anything that could be considered entertainment could be eliminated until you get that debt down. Eliminate gift giving and lawn care.


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RE: How bad should things be before bankruptcy

I am selling my existing furniture to get new chairs so there would be no out of pocket cost. If I can't sell them for what new ones cost then I will not get new ones. If you notice the ones I have posted are around $100 and I just want 4 and I have 10 chairs for sale. I didn't explain that over in the Home Dec forum because its the home dec forum not the money forum. Recently sold some things we didn't need and have used that to pay on some credit cards. Have a person coming to look at some other things that I have listed on craigs list. My chairs are on craig's list as well. I would love to be able to share a car but where I live we have no public transit system --- its been on the ballot several times but it never passes. DH has to drive 2 hours to most of his photo shoots which are in the opposite direction of my work and he has to have a truck for all his equipment, so its just a two seater 5 spd truck. My car is 4 seater 4 cyl to save on gas we sold the big SUV. The reason we have no equity is that the business loan thru the SBA is secured by our home. If we sell it we have to pay that loan off, our mortgage loan and any comissions so we would end up owing someone and have no place to live.

I told him that this year I will file seperately if he doesn't have his stuff ready. Plus I overwitheld to try to compensate for the fact he doesn't have withholding and will get 1k back for last year and this year. Its not that he doesn't want to pay the taxes he doesn't know what he needs to file them...I have to admit I looked at it online and I can't figure it out. The accountant has the records and was waiting on some more expenses that we needed to get over to him and never did and now its a year later. I did file extensions thru Oct which were accepted by the IRS.

My credit cards atleast are at 3.9, 5.9 and 6.5% all fixed. He asked me last night to transfer some balances and I told him no. We did go to couples counseling and took a finance class. He knows the stuff...its just doing it where he lacks. I know the accountant is at a certain area of town so I am going to try to figure it out and call them till I find the one who has the records and then figure this all out.


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RE: How bad should things be before bankruptcy

Thanks for the clarification.


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RE: How bad should things be before bankruptcy

If he's into school photographs, that's a real "good ole boys" network.....ya gotta do a lotta "schmoozin" to get the contracts. Don't expect to get contracts just because he has a good product..Sorry...there's more to it.

I've been an administrative assistant in 4 different schools......


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RE: How bad should things be before bankruptcy

even though you filed extensions with the IRS, you will still owe penalties for not filing. the ONLY thing the extension does is keeps them from locking down your accounts and forcing you to pay right then, all other normal penalties apply. you will NOT get 1 penny back from them until all prior tax debts are paid first. so if you are counting on using your refund this year to pay other debts, you need to subtract the unfiled taxes from it, and then subtract at least 10% more worth of penalties. IF you are lucky


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RE: How bad should things be before bankruptcy

Just my 2 cents. Your relationship with your husband sounds like the problem here...the money woes follow it. You mentioned you've been to couples counseling. Time to go back...and go alone if he refuses. The only thing worse than being a young woman sliding into bankruptcy is being an older woman whose credit has been totally ruined by her husband's financial irresponsibility. He doesn't sound like he's willing to change. You need to decide what you want your life to look like in the future. Good luck.


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RE: How bad should things be before bankruptcy

What is your ownership position with this business? Is it exclusively in your husband's name? Do you own part of it too? Are you certain that the business even actually exists? Is it even remotely possible that he's just siphoning money off of you to go spend at the dog track or whatever?

Your description of your current situation is terribly disturbing. Your husband claims he has an accountant, but he won't tell you who it is. He's running a business, but he won't tell you anything about it. That's just insane.
And sets off all kinds of warning flags.

I think you need to talk to a lawyer and/or an accountant to find out what your rights and risks are here, because the risks are enormous. You need to protect yourself. Your credit history is being trashed. You may well be liable for taxes, interest and penalties that your husband has failed to pay. You may be liable for additional big debts run up by your husband that you don't even know about right now. It might even be a good idea to hire a private investigator to find out the details about your husband's business and exactly where all this money is going.

This might sound a little paranoid, but I think you're in big trouble here, and unfortunately, I'd bet that whatever information you have is just the tip of the iceberg. You need to find out everything that's going on and protect yourself. If your husband won't give you any answers (and at this point I don't think I'd necessarily believe any answers from him anyway), you need do what's necessary to find out for yourself.


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RE: How bad should things be before bankruptcy

There is no statue of limitations for not filing your income tax. It may not be as bad as you think but you don't know and the stress level has to be through the roof. I suggest you do your taxes. Find a local guy with lots of experience. Your husband has emotional issues about money and until you all hit rock bottom and he is forced to confront those issues than it is only going to get worse. You Can pay everything down but until he is willing to work with you it's like fighting inside a brown bag all by yourself.


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RE: How bad should things be before bankruptcy

"What is your ownership position with this business? Is it exclusively in your husband's name? Do you own part of it too? Are you certain that the business even actually exists? Is it even remotely possible that he's just siphoning money off of you to go spend at the dog track or whatever? "

Yes I know for sure the business exists as I have helped him package up the pictures and have dropped stuff off at schools for him and I met with the previous owner. I have no ownership of the stock in the company (its a S corp) but did co sign the SBA loan. I didn't think they were going to require the house as collateral but they did at the last minute. If it wasn't a S corp I could do the taxes, but since he bought the stock, not assets, in the middle of the year I don't know how to do the taxes...how to split it with the prior owner. How to figure the amoritzation etc. He did tell me the accountants name last night so I am going to pick up everything tomorrow and then find a new accountant some how. DH told me that he was embarrassed to have me go pick them up from the accountant and I told him that I am doing it because its been almost a year and it needs to be done and since he won't due it for whatever reason that I will. I really need to talk with an accountant/atty to see if I should file seperately vs jointly. I know he is going to owe a lot of taxes and should he default on whatever agreement he can make with the IRS I do not want to be personally responsible for it. I have been trying to read up on the pros/cons of filing seperately and everything seems to point to filing seperately.


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RE: How bad should things be before bankruptcy

Good luck, keck.

Our hopes and thoughts go with you.

Yes - and a prayer or two, as well.

I'm pleased that he's finally willing to let you be more involved in the situation, even if reluctantly.

Could be that he's feeling somewhat overwhelmed by it.

Plus some shame. And embarrassment.

Good wishes to you both.

ole joyful

P.S. Did you hear what happened to the performing bear at the circus?

They had an act where several bears were dressed up in people clothes and performing.

Unfortunately, the clothing had become somewhat dilapidated, as bears weren't as careful with clothing as people can be (sometimes).

Anyway - the suspenders on one of the bear's pants slipped off the pants, and the pants fell down.

What was the result with the poor bear?

He was em-bear-assed.

Have a great day.

o j


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RE: How bad should things be before bankruptcy

"I have no ownership of the stock in the company (its a S corp) but did co sign the SBA loan."

Why the heck would you co-sign a loan for a business you have no ownership in?? All your assets are now at the mercy of this loan. You get no benefits of the company--assuming it actually ever makes money--but you get all the liabilities.

Please go see an attorney and accountant right away. And if I were you, I'd make sure to set up separate bank accounts from your husband. And DON'T pay any of his debts with them--that might make them considered 'marital property' and fair game for creditors.


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RE: How bad should things be before bankruptcy

What kind of business is this anyhow?


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RE: How bad should things be before bankruptcy

You sound pretty desperate, like this situation is overwhelming your entire life.

It's time to reassess your relationship. Yes you love him, but I can't see how he loves you. For me, withholding information that I want would be enough to leave him. You have to take care of yourself because he doesn't take care of you.

He is hurting you, he is your adversary.


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RE: How bad should things be before bankruptcy

I should probably keep my mouth shut, but as a woman who's seen other women burned badly by irresponsible men...why risk financial ruin and possible jail (from tax evasion). Your neck is on the line, DEMAND to get the finances under control. Take the papers to an accountant, don't wait for the other one. FILE the taxes you didn't file and then make amends. It's worse if you don't file at all. It WILL catch up with you and then bankruptcy will be the least of your worries.

I'd seriously consider extricating yourself from this relationship. If he's lying to you about money, honey, that's a BIG red flag. Every man I've ever known who lied about money was hiding something...drugs, gambling, another woman. And none of those things is something you want to have in your life.


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RE: How bad should things be before bankruptcy

Bushleague - she said he owns a school photography business.

I'm sorry for your problems. You are enabling him.

What are you going to do to stop enabling him? Holding him accountable is showing him love.


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RE: How bad should things be before bankruptcy

Tough love it may be - but love, none the less.

Even though he may (more than likely, will) not see it that way.

Good wishes as you work toward a rsolution of this multitude of problems.

One step at a time.

But make the first step.

And the second.

And the others that are necessary.

We entreat you - if you love yourself.

(And, if you don't love yourself, you can't love anyone else).

ole joyful


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RE: How bad should things be before bankruptcy

Life must not be too stressing if one is looking for new furniture. Hoping to sell some to get some new? If the money situation is as bad as you say it is, you could be sitting in a bare room on a bare floor. I'd be looking at thrift shop furniture not hundred dollar chairs. I think you need to step back and look at a realistic budget.


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RE: How bad should things be before bankruptcy

Okay, I've been reading this thread and not responding to it b/c I don't want to have it come out wrong. I can't keep quiet any longer. I agree with many statements above.

I would like to say these things:

If you haven't already filed bankruptcy-DON'T do it.
Your husband is like a child and you are not teaching him any good sound financial responsibility by bailing him out all the time. You've bailed him out 2x already and then signed for a loan for someone who has no credibility. Doesn't pay bills and loves to spend....HELLO that was not a smart move but you have to move ahead...can't look back. You guys created these debts you have to pay them.

Your biggest expense next to your mortgage is your student loans....in almost all cases they can't be discharged. So you will still end up having to pay that. You've already stated you need your cars, so you'd be keeping those. You have to pay back your 401k loan...So basically you'd be trying to file off your 60k in CC and your SBA loan? Good luck.....you are going to ruin your credit....for a very long time IF you even get your bankruptcy granted with the new laws, you still may have to pay some of that back.

What happens if you file and then have poor credit, no credit cards and then your water heater goes, or your furnace? You have no cards to pay it, no savings to pay it and no money to pay it. So you skip car payments to pay it then can't catch up and car gets repo'd and you have no way to work, lose your job, lose your house. Sounds extreme but it could happen. There are lots of people that are ONE crisis away from poverty and homelessness.

I would set a budget, stick to it.
Kick DH a$$.....if he's a photographer, start going to bridal shows get some clients offer better package pricing. Brides are bargain shoppers, if you have the best price and great photos you are hired. Hit the road and take photos of things when he isn't working. Enter photo contests w/cash prizes. Put your name out there. Free advertising is everywhere!!!!

Stop crying over it and FIX IT!!!!

Also, if you can sell stuff.....like 10 chairs to buy 4...then be smarter with the money. Sell 6 keep 4 and pay some bills.

Take ALL the cards away from DH and give him a weekly allowance and that's it. If he's unhappy with that let him know that he did it to himself and needs to learn the hard way. Money doesn't grow on trees and the credit tree just got cut down. NO MORE MONEY......no more excuses. You made these bills now you have to lay in the "bed of bills" for a while. Once you recover from this you will feel a sense of relief and feel like a better person that you "took the bill by the horns" and paid everything down. You did the right thing and not the easy way out.

Anyway, I'm all fired up, I hope this doesn't come across as insensitive. It's time to put your husband in his place and if he's not on board then he's got to find someone else to take advantage of financially b/c it's not gonna be you.


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RE: How bad should things be before bankruptcy

I think this is all fantastic advice from sensible people that is lost on this person. Some people will never learn.

I have little tolerance for people who can't seem to get it and then cry over their troubles. I do hope she comes out ok, but I am not at all expecting any miracles. I do expect she will buy the chairs and still not understand why she should not.


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