My husband and I both have federal student loan debts (US Dept of Ed and Sallie Mae). We have already each consolidated and are on 20 year repayment terms. He used credit card in college so we had $8000 credit card debt when we began our marriage. We were able to make payments, but have never paid it totally off.

Over the course of the last 9 years we have had 5 beautiful children. Each child required me taking unpaid maternity leave for 6 weeks. Without any savings we had to use credit cards to get by. After many struggles we found out our eldest daughter has Asperger’s. We have paid a lot of money (using cash or credit cards) for diagonsis, special diets, and therapies. We now have about $50,000 credit card debt. Last year I worked out a deal with Citibank which has about half the debt to let me pay it off at 0% interest for 5 years. My husband has refused to ask his card company for something similar.

All the while both my husband and I have been working split shifts so that we did not have to pay for day care. Last year we sold our house and moved in with my mother-in-law since we could not afford to pay the mortgage anymore.

I am at my wits end. We are still barely making it. My marriage is on the rocks since I never see my husband, my children need us to be a regular family, it is so stressful enough for us all, just living with my autistic daughter…adding financial stress and not having family time has made it even worse. Though she is a nice person, I can’t live with my MIL forever.

We have been avoiding bankruptcy because it will ruin our credit and make getting a home again almost impossible. What are some realistic options for fixing our situation while our children are still young?

Thanks,

Sharla

The Answer:

Dear Sharla,

What strikes me a first is that you are both blessed with a wonderful foundation and family and cursed with what has become never-ending debt.

I understand how these issues can come between a good relationship and letting this linger isn’t going to help.

The time has come to take action. in my experience it is usually the wife that hunts down solutions and the husband with their head in the sand. Denial just isn’t helpful, but it’s fairly typical.

The growth of your debt tells me that for whatever reason you’ve been living ahead of your income for a long time. I’m not casting any blame, just making an observation. The reason that’s important is because it is unlikely you are going to be able to live any further below your income to free up enough money to repay this debt in a reasonable period of time, considering your circumstances and urgency.

The irony is your assumptions about bankruptcy might just be the very thing that is holding you back from the legal fresh start you deserve. Let’s see, immediate pain but fresh start and new future, or what you’ve got now for the next five years or more. Hum.

If you file bankruptcy your credit will take a hit. But it can be easily rebuilt again. And bankruptcy would allow you to begin to save again for a house and you’d be eligible to buy one within three years, or even sooner.

Don’t make the mistake of assuming that bankruptcy means your financial life is over.

If you filed bankruptcy now you could use the next year to rebuild your credit using my guide, click here. At the same time you could begin to save for that future home or at least have enough money freed up to move out and rent.

Answer this for me: Do you have a greater responsibility to fix the future or the past?

I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.

Then use the free How to Get Out of Debt Calculator to review your options.

After that, come back here and comment about what seems to make the most sense and let’s discuss that.

Does that sound like a reasonable approach?

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

@GetOutOfDebtGuy

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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Read the full article at GetOutOfDebt.org, click here: Living With In-Laws, Deep in Debt, Husband in Denial, Marriage on the Rocks, and I Need Debt Relief! – Sharla

“Dear Steve,

My mother-in-law lives with us. She collects social security and she does not work. However the money she gets from SS she pays a credit card bill and a student loan (she went back to college at 50). She never has any money for anything else due to paying back her debts. We can’t help her because we have bills of our own and 2 kids.

My question is, if she were to default on the student loan and credit card could they take her social security? She doesn’t need credit for anything because she doesn’t plan on buying a home or car, she doesn’t even have a drivers license.

Peggy”

The Answer:

Dear Peggy,

Government backed student loans can garnish social security benefits. She should contact her lender and see what special programs are available to help reduce the payment. If it is a government backed loan then the Income Based Repayment Program (IBR) would be a good place to start.

If she defaults on the credit card she will go into collections, potentially be sued, and might get a judgment against her. However if her only income is social security and she has no other assets they can’t garnish the social security.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

@GetOutOfDebtGuy

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.

Other Related Articles to Read

• Living With In-Laws, Deep in Debt, Husband in Denial, Marriage on the Rocks, and I Need Debt Relief! – Sharla
• Greg Writes In Asking For Help And Advice
• Medical Debt Sending Many Over Financial Brink

Read the full article at GetOutOfDebt.org, click here: My Mother-In-Law Lives With Us. Can They Take Her Social Security? – Peggy

Greg wrote in asking for some advice. He said:

My mother-in-law has over $20,000 in credit card debt she needs to get rid of this debt so she concentrate on paying her medical bills. Would you suggest Debt Relief or Bankruptzy?
If Debt Relief can you sugggest an agency?

Greg,

Thank you for your question. It brings up some interesting points.

For some, $20,000 does not sound like a lot of money but the reality is no matter what the number is, too much is too much.

Medical debts are a leading contributing factor towards bankruptcy. In the U.S. we have an inequitable situation when it comes to affordable healthcare. Those that can’t afford superior health insurance wind up being billed for the full amount due for medical services, and at rates higher than people with insurance have to pay. This only leads to mounting bills that just can’t be paid.

What concerns me most about this situation is that we don’t know if the medical bills are going to continue. If this is an ongoing situation, they will.

Now, you asked about a Debt Relief agency and I think you should look into what solutions are available from this one.

But I also think that your mother-in-law wold be smart to meet with a bankruptcy attorney to find out what bankruptcy would mean for her. Only once she has investigated both options will she be able to make an informed decision about which path is best for her. She can find a local bankruptcy attorney here.

Steve

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Read the full article at GetOutOfDebt.org, click here: Greg Writes In Asking For Help And Advice

Since 1999, Keith and Deborah Krinsky of Magalia, Calif., have seen their health insurance deductible soar from $1,000 to $10,000.

A combination of Keith’s chronic asthma and potential heart problems, Deborah’s connective tissue disorder and fallen arches, and their kids’ various scrapes and stumbles led them to amass a pile of credit card debt and forced them to refinance the mortgage on their house — which they now are having trouble paying.

Keith, once a plant manager for a trucking company in Chico, took a $30,000 pay cut to get a job with better health benefits. Deborah, who doesn’t work because of her disability, said they are still fighting desperately to stave off foreclosure.

“Right now, we are in the process of losing our home. We will probably go to my mother-in-law,” Deborah said Monday.

The Krinskys are not alone in their scramble to make ends meet because of medical issues.

The connection between medical debt and the current credit crisis isn’t a direct line, but it’s strong enough to prompt Mike Leavitt, head of the U.S. Department of Health and Human Services, to declare at a recent news conference, “If we had any idea how many mortgages were foreclosed because people were crowded out by medical issues . . . Health-care costs are at the heart of many of the things happening.”

Medical Debt Sending Many Over Financial Brink U.S. News & World Report, DC – 57 minutes ago … led them to amass a pile of credit card debt and forced them to refinance the mortgage on their house — which they now are having trouble paying. …

Read the rest here.

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Read the full article at GetOutOfDebt.org, click here: Medical Debt Sending Many Over Financial Brink