I’ve been behind with my 30K wamu loan for some time now. This week I got a very not nice letter (what was I expecting, a nice letter?) from them saying the loan is in default and now the ENTIRE 30K+ is now due.
Umm…yeah. I couldn’t pay the monthly installment….how exactly am I gonna pay the 30K?
I’m rich!
I have a negative account balance in my checking account right now. I thought a payment to google (adwords advertising) was gonna go through tomorrow, and it went through last night. I have a few transfers coming in tomorrow, so I should be back in the black. Barely.
Bankruptcy Attorney
At my fathers insistence, we are meeting with a bankruptcy attorney for a free consultation next week. Frack that, man. I don’t want to BK. Yes, I have no money. Yes, I have a ton of debt. But I’m not ready to do that yet.
Not yet.
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{ 4 comments… read them below or add one }
I think you should look carefully into the bankruptcy option. You still seem to indulge in “wishful thinking” about how you’ll manage to pay off your debts in a few years. It doesn’t appear to add up:
* you have “plans” on expanding your business into other areas, but so far your business seems to be stuck around $2K/mo net profit. You’d be better off with a 9-5 job that pays at least $24K pa – and you’d be able to then take a second job. Thinking that you can grow your business until it clears $10K/mo profit is the same sort of wishful thinking that had you continue trading to make back your losses. Deal with the facts as they are, not what you’d like to happen.
* Paying off $300K in 3 years requires over $8K/mo just in principal repayments! At the moment you’re only paying off a bit of debt principal to your mom, and not even managing to pay the normal interest due on your other personal and business debts. P+I to pay off $300K with half at 0% and half at a modest 12% interest rate requires monthly payments around $9K!
If you don’t want to go bankrupt, a more modest and realistic goal might be to:
* not repay your mom until after your other debts are paid off (this sucks, but it’s the hole you dug yourself. Plus your mom has some responsibility for her own investment problems – why trust a 23 year old with her money)
* plan on paying off your $150K in other debts over 7 years
* assuming you manage to somehow arrange for the average interest rate of this $150K of debt to be only 12%, this would mean monthly payments of around $2,600
* get a job that pays enough to leave you with $2,600 a month after taxes, rent and basic food.
The sh*t will really hit the fan once the IRS payments are due and the 0% periods end on some of your debt arrangements in 6 or 12 months. Before then, do a spreadsheet model of what your situation will be like in 12 months time when you have to be making payments off your debt plus pay interest. This will help you decide if you can realistically avoid bankruptcy.
Regards
http://enoughwealth.com
I’m sorry to hear about your WaMu loan. Maybe you should try to call the bank and work out some sort of repayment plan. They might be more receptive to that.
I’ve got to agree with the previous advice. I know you think you have a moral obligation to repay this debt, and you do, but there is a reason BK exists – for situations like this. The best case scenario right now has all of your money going to debt service for the next several years of your life, with little spare income to grow your business, have a social life, etc.
You’re young – you will recover by the time you’re 30.
I would seriously consider it.
You must be asking yourself, at this point, what good you are actually doing toward your goal. But remember that it is only money. Slow and steady wins the race, said the tortoise to the hare. But perhaps you need a windfall, or BK.
I hope that work takes your mind off of your troubles at least.