401K & Foreclosure

Would you be better able to afford your mortgage if you paid off some of your other bills? If you can't use the money for your mortgage could you use that money to pay down other bills/loans so that your main payment each month is just your mortgage. However, you should be able to pay at least some of what you owe to the mortgage company because last year my husband and I were going to buy a house that was in foreclosure and at the last minute the people who's house it was got the money together and made a payment and saved their house. No more foreclosure. Good luck to you, I know it is hard, especially with children to think about. We are having a bit of financial trouble ourselves and are trying to think of creative ways to get out of so much debt.

K.,
My husband and I have had the same trouble's, those letters are just to scare you, yes they mean what they say but honestly a forclosure can take up to 6-12 months, this is what I would do, (because we did the same as you), take that check pay up your house to date put your house on the market for sale, then try renting for awhile to repair your credit. We are currently selling our house to get into a cheaper house payment, I can not tell you how many times I have gotten those letters. If you need to talk you can email me at ____@____.com i have talked to others that know about these things and maybe i can help. Good luck in whatever you decide, and remember your not alone alot of us hard working folks get into those binds as well.

The best thing to do would be to sell the house before foreclosure. Down the road it is something that will haunt you less when things turn around and you try to buy another home.

as for the 401K money, the chances of you being taxed highly for not using it on the house.. a banker should be able to answer that for you. you can just give one a call and ask anonymously.

You may want to check into bankruptcy also. By doing a Chapter 13, you may be able to retain the home.

D.
www.athome.com/DebbnKen

I guess I'm confused as to why you are working a job that is costing you the possible loss of your home? When my child was born, I had been working a job, but when we looked into childcare costs, it turned out I'd be bringing home about a dollar an hour (back in the day). After doing the math and weighing the consequences, the contribution I would be making to finances wasn't worth what it would cost me and my child, not to mention that the changes that we would have to make in order for it to work (bottle instead of breast, paper diapers instead of cloth) would eat up what little I would make and then some. We did have to make some hard choices. We sold our new car, we traded down on our older car. We were living very close to the edge; and then he lost his job. It didn't take long before we were in the hole. Ultimately, we ended up filing bankruptcy, just so you know my comments aren't from a place of judgment. I've been there. I wouldn't suggest bankruptcy. It isn't pretty.
Taking a job with a negative financial consequence just doesn't make sense to me, especially since you must have been working it for several months by the sound of your post, and surely after the first month or so you would have seen the job was costing more than it was contributing. It seems there must be more to this situation than is presented. In any case, this website may help: www.daveramsey.com or perhaps Suze Orman's or Clark Howard's.
Life can throw some nasty stuff at you. There are still times when get too close to the edge for comfort through careless spending or and emergency that depletes us. We reassess what's important to us, scale down, and put our energy and resources where our priorities lie. Maybe it's time for you to do the same? Perhaps take a job with hours that allow you to work when your husband can be home? Sell anything that you are making payments on? Put a moratorium on spending: no new clothes, no going out, etc. Just being frugal for a set time, like 6 months, and then assessing if that's working.
Good luck,
K. Wildner

I think that if you took the money out of your 401k for the house then you need to use it for that. If you took it out as a general loan then you can use it however you want. Either way I would contact the 401k account administrator to be sure.

If it was you taking the job and paying childcare that is causing the negative income, perhaps you should look into a 2nd or 3rd shift job.

Good luck!

I'm so sorry for what you are going through. Unfortunately I don't have any good answers for you?! I would suggest talking to a lawyer...but that would cost money too, so I don't know what to tell you. Mainly I wanted to write and wish you good luck and let you know I'm thinking of you and that I hope this all works out in the end :)