Taxes. I owe, I owe.

By | March 2, 2008

Ugh. Like most of the rest of America, the housing disaster is kicking my butt.

I currently owe the bank $100,000 more than my home is worth, so I can’t even refinance. I just learned that I reduced my taxes too much each month. I did that to be able to pay my high interest-only mortgage payments. So, I messed up. I owe about $7,000 in income taxes this year! Time to sell my furniture I guess.

I paid $17,943 on my interest only loan in 2007, plus $3,239 in property taxes, plus $2,700 home owners association dues, plus $870 for water, sewer and garbage. So, the total cost for owning a home in 2007 for me was $24,752. That comes out to $2,062 per month or $1,612/mo if I have renter paying $450/mo. I’ve already poured all of my savings into this money pit. There is nothing more. So, now I have to destroy my credit and go through a foreclosure unless they take my deed in lieu offer.

I’ll have bad credit for the next 7 to 10 years and I will probably owe taxes on debt forgiveness of $100,000 or I’ll have to pay back the $60,000 HELOC in payments over the next 5 years. It all kind of makes me want to vomit. But at least I know I’m not alone.

I have to plan my next moves carefully. Before I hurt my credit with a foreclosure, I should sell my 19-mpg luxury car and get a 100-mpg 2009 Toyota Prius, a bicycle, and a cheap apartment. I might get married and have children to improve my tax situation in 2008 as well.

The coming world energy crisis will require a lot of flexibility over the next 10 years.

toyota-prius-2009-0307.jpg

I really like the above design better than this one, which I think is more likely to be the 2009 model. Or one of them anyway. I’d like the body shape above to come in a 100-mpg version for under $30,000.

Update: My local Toyota dealership says the 100-mpg Prius will be out in 2010 and will only get that mileage with a special add on kit a user could have installed after the purchase. Car salesmen lie like there’s no tomorrow in my experience, so this may just be the thing they say to keep selling the 2008 models. I was told the 2009 model will be the same as the 2008 with no body style or mileage improvements. Hmm…

4 thoughts on “Taxes. I owe, I owe.

  1. theadlerian

    This same housing situation occurred in the 80s and it will pass if you can hang in there. It has to have been designed to happen since it already happened once before and in the same way.

    It you lose then the bank will have the money you paid, then perhaps money you own, and then they will sell it again. That’s a potential triple win for them.

    Do you must must to hang in because the market will recover as it did before, and your house in the future will be worth a lot.

  2. Xeno Post author

    I know. I’ve been trying to hold on, but I’m running out of options.

    I’m thinking that unlike the 80s today we are facing a global energy crisis, so I’ve lost faith that the market will bounce back any time soon. My payments will go up in 2011 and I can’t even afford the current payments.

    I’ve been holding out, using up my savings and selling things to pay my mortgage but my reserves are gone. If I do this for three more years and the value does not increase, I will have lost another $45,000 and I’ll feel like an even bigger sucker.

    I’m now in the process of selling my nice car to help pay my taxes this year. I’m not going to let the house eat my retirement savings too! Buying my first home has been the worst financial mess so far.

    A “conspiracy web site,” one that also said 9/11 was an inside job, was saying the housing bubble was going to burst. I listened instead to my mainstream friends and co-workers who said it was just doom and gloom nonsense, that I should have faith and go get a piece of the American Dream.

    I appreciate the advice. What I really need is an accurate crystal ball.

  3. theadlerian

    I was tell everyone that I knew about the burst. I did the same thing about the tech stock bubble in the late 90s, but of course no one listens.

    Anyway, do you think you could sell ads for this site. I know you don’t want to do that, but I’m sure your fans don’t want to see you go down in flames.

  4. Cheap

    The genie is now out of the bottle and if the car companies won’t start making these cars right away, we as American citizens will.
    Once you watch these videos, please share them with everyone you can before they get pulled. Make copies if you know how. I did it, so can you.
    100mpg is real
    http://video.google.com/videoplay?docid=-7801167825618010038
    150mpg SUV is real

    Why are the car companies not making them? I have driven a 100mpg car for about a year now using wind energy. Last one.

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