Broke, in debt, and behind 9 months on mortgage on my house.

6 Replies

I’m trying to decipher whether I should sell my only house after 1 horrible year financially for me. I started a forbearance plan back in August of 2020 and it ends on September 30th 2021. I quit my job last June to help my wife with our 5 children at home and decided to trade stocks but didn’t make as much as I anticipated. Since I am behind so much on mortgage and accumulated a few thousands in debt what’s my best option to start over?

Have you started another job yet? That would be the first thing I would do, then yes, I would most likely sell the house and use any equity you have to pay off your remaining debt and then rent for a while until you get back on your feet. Trading stocks is a risky game to play where I think most people lose money, but you usually don't hear those stories.

@Ahkeem Smith  Analyze it financially. How much equity do you have in the house?  How long will it take to pay back the forbearance amount? Are they asking for it all at once or will they restructure the loan?  If they will restructure the loan can you repay that? Will they  add it to the end?  What other debt will you have?  You are going to receive these tax credit payments per child now, can you put that toward the debt?  Yes selling the house may solve the problem now but you have 5 children, what will a rental cost that meets your needs?   

Another suggestion is there a possibility for your wife to work? If you have children at home would she be willing to care for an additional child for pay? Is there someone who needs that service?  

 Really you need to sit down with your wife and run numbers to see where you can go.  Obviously if you are making significantly less and would not be able to manage the house payment regardless of how you re-structure the debt then you have to sell but think about systematic ways to manage the debt and bring it under control. It took a year to get here, it isn't going to disappear in a day.

Others have already given good advice-get a new job (or two for the short term) and do what you can to increase your income and avoid stocks because they are risky.  With 5 kids, you are better off busting your butt to keep the house you have as a rental will likely cost you the same each month and your mortgage.  Can your wife do something to help bring in money?  Could she do a day home with 1 or 2 kids?  Guessing you've already looked at where to cut expenses.  Is there assistance you can apply for?

@Ahkeem Smith

If you now have a job ask your lender for another forbearance plan - if they don’t agree consider talking to an agent about chapter 14 bankruptcy. This is of course if you want to stay in your home.

Note I am not an attorney or providing legal advice