Latest Posts
Home > Ask The Get Out of Debt Experts > Lost Job, Reduced Income, Medical Bills and We’ve Depleted Our Savings. – Shelly

Lost Job, Reduced Income, Medical Bills and We’ve Depleted Our Savings. – Shelly

“Dear Damon,

My husband lost his job about 2 years ago, which reduced our income. He has had some medical problems which we were trying to resolve before he got another job. We have about 45k in debt ( not including my student loans)and only about 10k in home equity. Gross salary of approximately 58k right now, hopefully he will get a job after he recovers from his upcoming surgery.

We have completely depleted our savings just to keep our heads above water and are currently not behind on any payments. We are quickly hitting the low point and will be falling behind shortly. We are considering our options of DMP (the payments are about the same as what we are paying now, not sure if we can do it) debt settlement or talking to a bankruptcy attorney. Are there any other avenues to consider? I don’t want to do debt settlement, but am not sure we can keep paying what we are paying monthly. I have already reduced our monthly expenses as far as I can at this time. Should we consider trying to refinance our mortgage and cash out to pay as much off as we can before getting into a DMP? We are just not sure which way to go, any advice would be very much appreciated.

Shelly”

Don’t miss our free Get Out of Debt – “How To” Guide Series on a number of topics, for loads of practical advice, tips, and help to beat back debt. – Click Here

The Answer

Hello Shelly,

It doesn’t appear that you have enough home equity to really even consider trying to pull cash out.

From what you describe, the most important thing is cash, and until your husband can find steady work, you are going to just have to let the debt payments go and focus on the necessities.

You should certainly meet with a local bankruptcy attorney and explore that option. That doesn’t mean you have to file right away, but explore that option. Remember that a debt settlement program does not “reduce payments”, even though it appears to be the case. Click here to find a local bankruptcy attorney.

The reality is that you are trying to raise enough money as soon as you can to offer a settlement. Often times debt settlement is pitched as low monthly payments over several years, which is not the best way to look at it.

You are simply not paying creditors while you hope to save up enough money to eventually settle. The lower the amount of your monthly savings, the longer it will take and the more likely you are to be sued.

It seems clear to me though, that until your husband is gainfully employed you are going to have to let your debt payments go. If he finds employment and you can save up a nice chunk of money to negotiate your debts with than great, if not, well, that is why you want to meet with a bankruptcy attorney so you are aware of how that option will play out for you.

Lost Job, Reduced Income, Medical Bills and Weve Depleted Our Savings.   ShellyLost Job, Reduced Income, Medical Bills and Weve Depleted Our Savings.   ShellyDamon is a talented independent debt coach that provides in-depth assistance and consultations for people struggling with debt. If you want a personal debt coach to help you through a difficult situation or want assistance to find secret discounts offered by debt settlement companies I think Damon Day is an excellent person to contact for advice and assistance. He can be reached directly at DamonDay.com

If you have a debt related question you’d like to ask, just use the online form.

Lost Job, Reduced Income, Medical Bills and We've Depleted Our Savings. - Shelly by

Share This and Spread the Word

About Damon Day

Damon Day
Damon Day is a talented Debt Coach who offers fee based consultations to consumers as an alternative to the typical free debt relief consultations which are nothing more than thinly veiled sales pitches lacking any real information to help a consumer make a good decision. You can learn more about how he can protect you from getting ripped off at DamonDay.com

Get My FREE Get Out of Debt Guy Newsletter

It is the smart thing to do.

I promise to keep your email safe and secure.

Close

I want to keep you posted each weekday with just one email about the latest get out of debt news, scam alerts and information to beat back debt.

You can unsubscribe at any time with just one click.

After you subscribe, check your email to confirm your subscription. If the confirmation email does not appear in your inbox in a few minutes, check your spam folder for it. Sometimes it likes to annoyingly hide there.


  • It will keep you posted on the latest scams.
  • You will be alerted to the latest articles.
  • You will wind up smarter than everyone else dealing with debt.