***EDIT***

Thanks all for your responses and for those who gave some solid advice. Gonna make some adjustments in line with what many have suggested and see if that helps.

-B

They are probably going to sue for a big loan, though, aren't they? Then you'll have to pay it out or go BK and now you'll have terrible credit.

Sounds like a judgment may not be collectible. But no idea what that does to credit score.

Also, maybe a dumb question or move...can you refinance the big loan to get your payments lower? Will cost you more in the long run, but if it's easier on you and the family, it could be worth it.

Car payments aren't bad. One under $200 and the other two under $300 so trading them in for other cars isn't gonna make or break the situation for me.

I'd be worried about that turning into a judgment and affecting you down the road. That's gonna be a big ding, even if you have a solid score now. The credit bureaus tend to be difficult in giving you a good score, and quick to knock you down.

It may be worth contacting the unsecured loan and seeing if they could help you out on the monthly amount due. Won't help in the long run, but will help on the short term.

Eta: good luck. Hope you get it sorted sooner rather than later.

Have you spoken with the lender directly? They don't want you to default on an unsecured loan. With a credit score like that, maybe they can work with you.

Can you, your spouse and kids that are old enough to work collectively make an extra $15-$20k a year somehow? I would personally explore that and cutting spending ahead of anything else.

How much is going to support grandkids? Unless their parents (your kids) passed, I would probably cut that off.

All thing should be considered, down-grading cars, getting something more fuel efficient (assuming you have a gas guzzler), downgrading your cable service, quit eating out, getting rid of Netflix/streaming services/etc.

I bet if I was in this situation I could easily get rid of $500-600/month of unnecessary expenses.

Cut cable - $120
Cut Netflix - $16
No eating out - $300
Downgrade cellphone from unlimited data - $20-30
Slower home internet - $10-20

Do you have enough equity in your home for a cash out refi that would cover the debt? Assuming your goal is to pay back your loan to improve your monthly cash flow, this could solve it. Although obviously at the cost of converting that debt to a secured loan and extending your mortgage, which you may not want to do. But if you have a ton of equity sitting around doing nothing, it sure beats bankruptcy.

Good luck whatever route you take.

These are the steps to protect your assets from judgment as I know them, not a lawyer, ask one

Declare Ch7
include $1400 loan
reaffirm everything else


if you just default without bankruptcy protection a judgement will be attached to your real property and it will have to be paid to sell it by you or your heirs

Understand if you don't want to share it, but what's the actual total debt amount?

I'm assuming if you're taking care, and worrying about footing the bill, of an ailing in law then there isn't much there from an estate standpoint? I know it isn't what you asked about but I'd explore every avenue possible to get those expenses charged to the in law. The unfortunate reality is that the estate eats the debt.

Zero in the estate - he has a burial policy and no real assets

Yeah, man, that's a tough situation. I don't know about the credit impact. Never been in that situation and hope to never have to find out.

Outside of doing that I'd do what others have mentioned:

- see where you might be able to shave some other expenses
- see if the lender will work with you on the loan
- isolate expenses for the in law to the in law/their estate as much as possible.

I'd mostly advise procuring a time machine to go back and get a better divorce lawyer. But I guess that's out.

DannyDuberstein said:

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I'd mostly advise procuring a time machine to go back and get a better divorce lawyer. But I guess that's out.

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Truth be told, the divorce lawyer was amazing. She got me (the dad) custody of all my kids. In Texas, that is no easy feat.

Thanks to all for the suggestions. Gonna look at my options as far as working with the current lender, etc.

Unsecured debt? Whoever owns it couldn't care less about you. Moral obligation? That's to yourself and your family.

cjsag94 said:

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It's not a moral obligation to the person who made the loan. It's a moral obligations you have to yourself to pay your debts that you incurred.

OP even said that... But he's drawing a line to where his morals stop and his expectation of certain lifestyle choices starts to trump those obligations.

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Maybe a fair criticism/assessment, but I have not yet drawn any such line. To date, I've never missed a payment in my life - hence the current credit score.

Again, thanks all for the responses.

Applaud your willingness to share this on texags. The hardest step is realizing you have to do something different. Most people will keep doing it and just hope it gets better.

I don't agree with everything Dave Ramsey says but I think his philosophy is right up your alley! I can imagine that if you follow his word to a T that you'll be in a lot better financial situation after one year. Good luck and keep us posted! Everyone likes a comeback story!

Throwing out morality a little loose here IMO. If that loan was from family, friends, or a community member, who isn't profiting, then sure, I'd say there is some moral concern.

If that loan is from a traditional lender, it's business. They account for loan losses as a cost of doing business. They charge you interest for their profit. They made a risk decision and should be willing to work with their borrower if that borrower needs time to re-work liabilities. Hell, our own President is rather lose with his corporate structures filing for bankruptcy.

500,000ags said:

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Throwing out morality a little loose here IMO. If that loan was from family, friends, or a community member, who isn't profiting, then sure, I'd say there is some moral concern.

If that loan is from a traditional lender, it's business. They account for loan losses as a cost of doing business. They charge you interest for their profit. They made a risk decision and should be willing to work with their borrower if that borrower needs time to re-work liabilities. Hell, our own President is rather lose with his corporate structures filing for bankruptcy.

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That makes it legal to skip out, pending marketplace consequences... Not moral. Morality is what guides our behavior when rules don't otherwise apply.