In what order would you attack debts, and how to get out from an upside down vehicle?

The Question

Long post but need advice please..

I'm divorcing and I can keep the house with a 60K buyout. Interest rate would be about 7% and monthly payment would be about $600. Heloc is only option, no home equity loan, I've called around.

Which is a great deal for me because we have 237K  equity in this home at 2.3% interest rate. 223k outstanding on the mortgage & home value about 460k. 3/2.5, pool, 1800sq ft.

Or we could sell but interest rates around 7.5% and new mortgage total in this area would be about 320k.(2100-2500 monthly). Renting a 2 bed in SW FL is about $2200/mo. Total housing cost for me would remain about the same rent vs buy vs keepv the house.

We had a van that is no longer needed due to splitting. I would take on some marital debt as well considering the low buy-out amount comparative to equity. Van has 27k payoff, KBB value about 17-20k.

I bring home about 4200 per month after health & car insurance, retirement savings, etc.

Now, income would come up a little due to removing spouse from phone plan, health & car insurance, etc. The below is current/ not yet split financial picture:

  • Van loan: $567 monthly,5% interest (27k owe)
  • New to me car: $250 monthly, around 9%, 11k
  • Current mortgage: $1667/mo, escrow, 2.3%
  • Phone & internet bundled: $140
  • Water: $100 (monthly maintenance since home is on well water)
  • Electric: avg $350 monthly (FL)
  • Credit card: $8.4k, currently 8% Interest rate on a debt plan for 12mo. $168 minimum, paying $250.
  • Groceries: budgeted $400 (1 adults 2 toddlers)
  • Pool chemicals: $60 monthly, I do it.
  • Black Friday subscription: $1/mo 
  • Store Memberships: avg $35/mo, paid annually
  • (Sam's club, Walmart)

My questions: in what order would you attack debts, and how to get out from an upside down vehicle? Looking at another car for $250 per month including tax/fees once I get rid of the family van.

Anyone that can offer advice or insights that has gone through the finances of divorce? No alimony or child support, we will split all child costs 50/50 and each will claim one twin for tax purposes.

Thank you frugal family

What did people say?

⇒ Kim: Why are you taking all debt. As a lawyer I am telling you get a better attorney who will stick up for you.

Child support is not for you to waiver. It is the children’s right. I guarantee he will not fork over all the 50 % of expenses. I defend those guys all week. When they get divorced they sign anything. But it is hard to get them to pay.

If you don’t have attorney. Call bar association for a modest means attorney. Ask around. It is worth the money. Believe me.

⇒ Michelle: Won’t the ex be required to contribute child support to help you pay some of these expenses like food and mortgage? These are to sustain the children.

⇒ Jeanette: You can get great advice from Frugal Fit Mom on YouTube. There are alot of great frugal moms out there that are killing it. When I was in that position, I made sure I cut corners on food, utilities, clothes...everything! You might be able to get a line of credit considering you have a great interest rate. DEFINATELY keep your home. You can always rent out a room if you have to. Fast forward in my life. I put three kids through college and I own 11 houses mortgage free. Stay inspired by reading Dave Ramsey, Rich Dad Poor Dad.....and watching frugal YouTube channels. God will direct your path!

⇒ Nancy: I’d probably sell the van, eat the loss, pay off credit card debt, buy the new to you car outright. Roll all the old and new debt into the HELOC and pay it down as aggressively as you can. One debt on which to focus and get started on your new life.

⇒ Kathy: I just want to say that posting anonymously was smart. Even within our own trusted group we need to be careful sharing too much personal and financial information.

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