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I Bought a House and Slowly My Credit Has Been Getting Worse. – Sheila

Sheila

“Dear Steve,

When I bought my house about 9 years ago, I underestimated the expenses that come along with home ownership and began living above my means. I began using my credit card more and more (paying for home services, car repairs, fees and living expenses).

I accumulated more cards to “take advantage of” the no interest incentive periods, but found that wasn’t a good idea. I did get to a point of not having to use credit cards, but I wasn’t able to make all the payments so I began to get behind.

The damage was already done. Also from time to time I’d run into large, unexpected expenses and began borrowing from my 401(k). I’ve added to the loan, discontinued some home maintenance services, downgraded luxuries (cable tv) been through a small number of wage garnishments.

Today, I’m about $60k in debt and out of options. My husband (of 4 years) has been in and out of work (mostly out) for about a year and we’re trying to keep his small business afloat. I believe my bottom line to help is to get more money into the house. I’ve tried a second job, home businesses, work-at-home opportunities, free grant programs, looked into debt consolidation and checked into bankruptcy and my income disqualifies me for government and other assistance. I don’t want to file bankrupt, but it may be my best option.

  1. Why do I have to disclose my husband’s personal information if I file for bankruptcy without him?
  2. My credit rating and credit score are already shot and it’ll take me YEARS to get out of this debt.
    • Am I digging a deeper hole by trying to get rid of the debt on my own?
    • If bankruptcy is a better option for me, would it be slightly better or much better?

I thank God you’re out of your situation.

Thanks for your advice.

Sheila”

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The Answer

 

Dear Sheila,

Thank you for thanking God that I’m out of that mess as well. I thank her everyday for only making me live through the pain of horrible debt, just once. And trust me, once was enough for me.

I would imagine that some of the debt you have is joint debt, in the names of both you and your husband, if you are being asked to provide his information.

If your credit score and credit report are already shot, avoiding bankruptcy and struggling along for years is not going to make this situation better or help you to recover faster.

How much better will bankruptcy be for you, I would estimate that it will be significantly better. Here is why.

By your own description you have been sinking under debt for nearly a decade. Your basic obligations have outpaced your household income and you’ve had to rely on borrowed money to make ends meet.

To dig yourself out of this mess without bankruptcy you’d have to not only get your life into balance with your limited income, but also cut back even deeper on expenses so you’ve got some extra money leftover each month to use for debt repayment. Then, if you can get to that level of deprevation you will need to continue and maintain it for the next six or so years. Just from experience, the chances are greater that you will fail to complete the repayment plan.

I understand your desire to not want to file bankruptcy but when I get a cavity I don’t want to get a filing. My avoiding the filing does solve the problem, only makes it worse. Same for you.

Go bank to the local bankruptcy attorney you met with or find a nicer local bankruptcy attorney. The time has come and it is now.

Big Hug!

I Bought a House and Slowly My Credit Has Been Getting Worse.   Sheila
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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