Samantha Says “My Husband And I Are Young And Don’t Want to File Bankruptcy. What Do We Do?”

Posted by Steve Rhode
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Samantha wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

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“Dear Steve,

My husband and I are young and when we were first married times were really touch since he was self-employed and didnt always have a check coming in ends were hard to meet.

Once I even had to take a personal loan out in order to keep the utilities on. Then we got back on our feet and kept paying on it and tried to find me a car as we only had one vehicle and needed two. We had no credit and no down payment so we were told to take out a personal loan together and it would build up our credit.

With him being self-employed for so long (now he has a steady full time job in addition to working on his on on the side) we had to refinance both a couple of times just to get buy. We don’t live above our means. We have a truck payment (still only one vehicle that is a gas guzzler) and those two loans on top of rent and basic expenses. We stay behind on the truck and loan and now we have a new born daughter.

How do we get our head above water while still giving her the world with out filing for bankruptcy?

Samantha”

Dear Samantha,

Thank you for writing to me and trusting me for help and advice.

Based on what you told me it looks like you might not have been living above your means but certainly right near the edge of them.

You are suffering from a chronic condition facing many, young and no credit. That leaves you vulnerable to high priced and expensive loans or financing. Often people turn to the buy here, pay here, car lots that will finance but at very high rates of interest.

Congratulations on your new baby girl. I’m sure she is precious and that you want a different future for her, other than what you’ve been living through.

After reading your question a couple of times I’m wondering if what you are referring to as a personal loan is actually a payday loan. Your statement about having to refinance them a couple of times makes it sound like a short term loan, just like a payday loan. Once some people get into the revolving payday loan trap, it is very, very hard to get out from under it.

Since you are renting and only have the revolving personal loan along with the truck payment, I’m not convinced that bankruptcy is the right course of action for you. In fact, it does not sound like your issue is too much debt, but actually too little income.

It sounds like your husband is doing the best he can with working two jobs and he might be at the limit of what he can make that way. With a newborn at home, it would be nearly impossible for you to go out and work unless you had some sort of free daycare.

With your income being so marginal I would guess that you are probably eligible for some government benefits such as food stamps (now called Supplemental Nutrition Assistance Program, SNAP) and WIC (food program for Women, Infants, Children). See this link for more information. There is also a very good online tool that will show you if you are eligible for SNAP.

Some people feel like they are too proud to use benefits but I for one am happy to pay taxes that assist others in need and trouble. I can understand the pride thing but you can’t eat pride. These benefits are available and you could use them and that will free up some of the money you are spending now so you can actually get ahead. Living just behind on payments is not a safe place for you to be right now.

Other benefits you may be eligible for include Medicaid and rent assistance as well. All of these are benefits waiting for you to claim them. You should also contact your local county department of public health or social welfare office to find out what else might be available in your area.

I can’t wave a wand and give you free daycare so you can go out and work, or increase the money your husband is making at the moment, but if you engage in an exhaustive search for benefits and you are eligible for them, that will be a blessing and a relief.

Big hug.

Steve

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