OP, how many people in your family? If you have 2 kids or less, you should downsize that house. And I agree, you need to sell your cars and get pre owned reliable cars.

You really should list the terms and APR/interest rates for all of your debt. $2200 in store card debt - why on earth wouldn't you pay that off immediately? I shudder to think of the interest rate on that.

I should also mention, we have about 450K+ in investments, though I dare not touch those unless we absolutely and only absolutely need to. For me, it's at least a peace of mind that we did some good, earlier in our years. Before life as we know it caught up to us. But we live and learn. And I will absolutely not repeat this, and will make sure to instill good training with our kids so they are smarter (hopefully) than we ever were...

OP here. We live in the burbs in a 1900 sq ft house, so a McMansion this is not. 2006, man, if I could turn back time.... I think the cost of going through selling and buying a TH probably isn't the best approach, though I'm open to opinions. Remember, we have 10K right now in emergency savings only, though we'll be at 15K soon and 5K with a regular savings fund. So selling and eventually buying....not sure it makes sense?

For our cars, one Honda minivan and one Jeep Wrangler, your basic mid-line models. Owe ~21 on the Honda and maybe 28 on the Jeep, perhaps slightly more. Don't have my spreadsheet in front of me. No Lexuses or Mercedes here, lol.

Family loan from family, 200 a month until it's paid off. Five years from now at this rate.

Loans % varies, the student loan is around 3, consolidated loan is just over 9 (with USAA). Cree card (also USAA) is just over 10 and I've shopped around - it's pretty much the best for what I've found (barring opening up another to roll it onto, which I hesitate doing and would rather just pay it off ASAP).

Sounds to me like you are really aware of the details of your situation -- which is huge. You can't fix what you don't know about, right?

On a personal note, I cannot imagine the fortitude you must have to bear all of this stress/burden each and ever day. You are a tough cookie. Know that you are strong and you can get through this and you will be better and stronger for it.


1. Sell that house and pay off that first mortgage. Rent. This is what you need to do right now. And rent a less fabulous place... i.e. less than the cost of your monthly mortgage payment.
2. Sell those cars. That is a lot of debt. Think: $8-10K Honda or Toyota. (I drive a 2004 camry, 90K miles and it is going well... I bet it's not worth that much, but it is a cheap, reliable ride.)
3. Save every dime you can for that 2nd mortgage. Think about whatever you spent that money on. I hope you enjoyed it b/c those memories are going to have to be your joy for the time-being.
4. Forget about camps/Xmas. You are not in a position to be spending on extras. Camps only if they are in place of daycare that you need to go to work.

5. Work on paying those smaller debts if you can. Think about getting a forebearance on the student loans until you get settled in a rental unit. (Plus of the rental -- you don't have to pay for things that break).

It's not the life you intended... but you already lived that life and paid for it with credit. Now it's time to put on the big boy/girl pants. The party is over.

Op if you want help, list your debt with interest rate and monthly payments, total loan balance

I agree that the cars are a big issue. Did you roll debt from prior cars into the financing on your current cars, or are you each driving cars that originally cost $50k+? Is there a prospect of selling the for what you owe and then buying less expensive pre-owned cars?

Is the family loan from a family member or is it a loan you got from a bank for family purposes?
It's unclear from your post

You don't mention the interest rates on the various loans. What are they?

Like the others, I think you should sell the cars and buy cheaper ones (think Subaru/Honda instead of Lexus/Acura).

You have 150k in debt beyond your 1st and 2nd mortgages, is that correct?

One major thing that sticks out is your cars. You cannot afford them in any way. Not even close.
Get out of those cars immediately

Sounds like you have a good plan already for the most part.
However I am wondering if you should consider something more drastic - such as selling your house and downsizing. Try the minimalist approach i.e. smaller house and less possessions. You could sell excess furniture etc. I think you might feel like a weight off your shoulders if you sell your house and then buy a less expensive one (much less?). Is this feasible or do you feel that this would not benefit you due to fees or whatever else? There are a lot of people into this minimalist approach - and with hardly any debt, they are much happier.
Same plan for the cars - sell one.
Less is more.

And don't beat yourself up. What's done is done.

Pay off the smallest amount first, once your 2nd mortgage is paid off. It feels good psychologically, even though it might not mathematically make sense. Also, your cars are very expensive. Can you sell and get something cheaper?

Altogether, including our mortgage, we are $757,734 in debt. We owe $542,250 on our first mortgage, and $62,000 on our second mortgage. Our second mortgage will be due in whole in six years. Meanwhile, our first mortgage will begin to have a variable rate in 1.5 years, which could impact our monthly payment anywhere in between $500-$1000 additional. We originally paid $680,000 for our house in 2006, during the peak of the market. It’s now valued at somewhere around $550,000. We can’t refinance because we’re underwater (obviously). Our first and immediate goal is paying off the second mortgage in 12-18 months, which we can and will do before the first mortgage’s variable rate kicks in. Doing so will allow us to ideally, and finally, be able to entertain the question of refinancing, since we won’t be underwater anymore (and hopefully the value will continue to rise). The question thereafter is what to do with the rest of the debt we have. We’ve turned off our 401(k)s to get us through the next 12-18 months. We will turn both 401(k)s on at full blast afterwards – 15%.

We have $38,000 in student loan debt, $45,000 in loan debt that we used to consolidate credit card debt over the past several years (totally stupid, I know, we’ve painfully learned our lesson), $52,000 in car payments for two vehicles (one is 3+ years old, the other is approaching 3 years old), a $12,000 family loan, $4200 in existing credit card debt, and $2200 in store credit debt (again, stupid, I know – we’ve shredded all of them).

Over the past four months, we’ve put together a robust budget plan and have been sticking to it like glue. We’ve built out almost $10,000 in an emergency fund (we’ll be at $15K – our goal - in the next 4-6 weeks) (we work for the government, so our jobs are stable) and would like to build out a $5,000 regular savings fund that will allow us to be proactive in planning for camps, Christmas, car taxes, etc. We should be there by late May. For the regular savings fund, we’ll also continue putting $200 per paycheck into it, so that we continue building that up slowly but surely. We pull 500 out of each paycheck for two weeks’ worth of groceries, gas, and an “other” category (haircuts, etc.) We’ve been very good with adjusting – and sticking to - this budget. After the emergency and regular saving funds are built (again, we’ll be there very soon), we’ll be funneling all remaining funds – after bills – to the second mortgage (averaging 1500 per paycheck, but we'll also be sending all tax returns and bonuses that way, too). Again, the $62K on the second mortgage will be paid off in 12-18 months, tops.

I do like Dave Ramsey’s approach, but I shudder to think of cashing in most of our emergency and planned saving funds to throw immediately towards our debt. Our house is 37 years old and most of our appliances are approaching 15+ years old, and we need to prepare accordingly.

Once the second mortgage is paid off, in the next 12-18 months, what should I tackle next? The store credit debt will also be gone by then, so I think it makes sense to tackle the remaining debt on the existing credit card (currently $4200, but will be lower by then). Then the car loans. That said, what sort of money will we need to refinance on our remaining (and only, thankfully) mortgage loan? As of today, we owe 542K, and the value of the house is currently 550K. Should we put money towards refinancing costs instead of towards the car loans? I envision, in 3 years tops, with the compounding of the debt snowball approach, that we’ll ideally be debt free of the credit cards and car loans. I’m just not sure what to expect first with how much we need to come to the table with for refinancing (and is it realistic to refinance with no PMI and make it a 15-year mortgage instead?)

And go easy with the kicks and blows, I’m already doing plenty of those myself. We were stupid with not having a budget, it’s gut-wrenching to imagine where we could have been had we instilled discipline with our spending and savings years ago. Alas, nowhere to go but up from here, and so here I am. TIA!