“Dear Steve,
I’m frantic and don’t know where to turn. My husband of 20+ years informed me recently that he hasn’t been generating income through his business, so he has been taking out cash advances on credit cards, running up lines of credit on our home and other rental property, and depleted all his 401(k) accounts.
He’s done all this without telling me, and most of the debt is in our joint names. I am over 50, have not worked fulltime since our marriage and have a disabled child who needs 24-hour care. We are ready to file bankruptcy, and soon after that will face foreclosure. What can I do to move forward and provide for my child?
Karen”
Dear Karen,
Wow, well that was an utter mistake that will lead to your profound financial downfall. But as I always say, “No sense wasting a perfectly good mistake.” And it sounds like he has a lot to learn from his actions.
I’m going to assume that he did all of this in order to care for you and your child. I’ll give him the benefit of the doubt that his intentions were good.
But all of that aside we need to deal with the reality in front of us right now. You are busted broke. The only way out of this is going to be to close the door on all of this mess with bankruptcy. I suggest you click here to find a local bankruptcy attorney you like. It is important you find one to talk to ASAP so you can gain some comfort knowing you will be legally protected and represented. And by the way, don’t leave the home until the actual foreclosure, you’ve got some time. You will want the house to be foreclosed on first so the debt from that can be included in your bankruptcy.
While bankruptcy will put a stop to the legal and financial mess that is headed your way from the bad financial decisions he made that nuked your financial life, it will not help you to move forward, for that you need income.
The second step in the two stage plan is to have a game plan on how you will earn money as a family to care for your son, put a roof over your heads, and feed yourselves.
So let’s instead turn our focus to that, the bigger concern I have, the income. What is the plan? Have you spoken to your husband about his income intentions?
Your husband may feel absolutely horrible for what he has done behind your back in all of this. If his intentions were good and you feel you can move forward together, if you can find a way to forgive him, and move forward, that would be beneficial. He must have some skills to earn money and has done so in the past.
Forgiveness is hard, if not impossible for a lot of people, but the more you beat him up over this, the more depressed he is over this, the less likely your opportunities will improve moving forward.
So Karen, where do you stand now and what’s the income plan moving forward?
Please update me on your progress by
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Well, I’m going forward a little — mostly just treading water, but there you go. My husband kept up his fantasies of landing a big score or a big client. I begged him to get a job stocking shelves, delivering pizzas, anything to generate income. I had gotten a full-time job, with flex-time, so I can still care for my disabled child; but as you can imagine, not a very high income after 22 years out of the job market. In fact, my take-home pay would not even pay the first mortgage on our home, much less the second or the utilities. But my husband scoffed at this suggestion, saying he could not live on that kind of income. I was afraid of him obligating me financially to bills I had no hope of paying on my income (he wanted us to move out of the foreclosed-upon home and rent a large apartment). My only priority now is to my child, I have to provide a secure home for him. My husband’s idea of “finding” money from somewhere did not sound promising. So my child and I have moved out of the home in foreclosure and are renting a small condo. My husband and I have filed for Chapter 7 and are waiting for the discharge to be final, then I will file for divorce. He is still living in our marital home that has been foreclosed upon, he thinks he has another 2-3 months there. He is not willing to pay any amount of child support and tells me, nothing from nothing is still nothing.
I am grateful that I have a job that allows me to take care of my child, but after paying rent and utilities, I am left with $150/month to buy gas and groceries. I am living paycheck-to-paycheck, have no savings, no retirement and a 12 year old car. It’s scary living on the edge like this. I need a second job, another source of income, but I don’t feel like I have any options — I can’t leave my child alone at all, I have no child care providers, and even if I did, I can’t afford to pay anyone. Why get a job working at the mall on weekends paying minimum wage, and then pay $10-15/hour for a child care provider?
So I am trying to remain positive and hope to survive. I do feel less anxious and less stressed since I have moved out. It’s not the future I envisioned for myself, but I am doing my best to deal with reality as it is, not crying for what it was.
Well, I’m going forward a little — mostly just treading water, but there you go. My husband kept up his fantasies of landing a big score or a big client. I begged him to get a job stocking shelves, delivering pizzas, anything to generate income. I had gotten a full-time job, with flex-time, so I can still care for my disabled child; but as you can imagine, not a very high income after 22 years out of the job market. In fact, my take-home pay would not even pay the first mortgage on our home, much less the second or the utilities. But my husband scoffed at this suggestion, saying he could not live on that kind of income. I was afraid of him obligating me financially to bills I had no hope of paying on my income (he wanted us to move out of the foreclosed-upon home and rent a large apartment). My only priority now is to my child, I have to provide a secure home for him. My husband’s idea of “finding” money from somewhere did not sound promising. So my child and I have moved out of the home in foreclosure and are renting a small condo. My husband and I have filed for Chapter 7 and are waiting for the discharge to be final, then I will file for divorce. He is still living in our marital home that has been foreclosed upon, he thinks he has another 2-3 months there. He is not willing to pay any amount of child support and tells me, nothing from nothing is still nothing.
I am grateful that I have a job that allows me to take care of my child, but after paying rent and utilities, I am left with $150/month to buy gas and groceries. I am living paycheck-to-paycheck, have no savings, no retirement and a 12 year old car. It’s scary living on the edge like this. I need a second job, another source of income, but I don’t feel like I have any options — I can’t leave my child alone at all, I have no child care providers, and even if I did, I can’t afford to pay anyone. Why get a job working at the mall on weekends paying minimum wage, and then pay $10-15/hour for a child care provider?
So I am trying to remain positive and hope to survive. I do feel less anxious and less stressed since I have moved out. It’s not the future I envisioned for myself, but I am doing my best to deal with reality as it is, not crying for what it was.
We sold an investment property and are living off those proceeds until we file bankruptcy. He is still pursuing his business ventures but not generating any income. I guess he’s hoping that if he holds on long enough, it will turn around for him. The bankruptcy atty told us that we are eligible to keep the house but must “re-affirm” the loan. I’m not going to do that and get in more financial trouble; as my husband has no income.
I did get a full-time job that is very flexible so I can still be home most of the time for my child, but the salary is not enough to support us, especially in this home. The only thing I can think of to do, is to rent a room in someone’s home (I can’t afford to rent an apt) and file for divorce. I am the most upset over what this will do to our children: 1 in college, 1 hoping to start college in the fall; but most of all, my disabled child. God knows what the future holds for us.
Karen,
You’ll have to do what you’ll have to do. And while the situation is not great, just remember, it could always be worse. Your kids are well, nobody is mortally injured and the sun will come up tomorrow. What is the hardest to deal with is breaking the assumption and expectation of what your life is supposed to be based on what you believed it would be. Let’s see if I can be clearer. In the past you probably had an expectation that things were fine and life was going to continue as it had. And now it’s not. It’s that dealing with that loss and pain that makes situations like these so painful and debilitating.
While my original answer to you was very blunt, and I’m sorry if that caused you any pain, it’s still good advice to follow.
I don’t know if your marriage will survive this trauma in your life. I’ve actually seen many couples get divorced after resolving their debt with bankruptcy or by some other means. The irony is that it wasn’t the debt that broke them apart, it kept them together because they felt they were stuck together in debt. Once the debt was gone they were more freely able to go their separate ways.
Just remember, it all sucks, but nobody is on fire. Whenever you think this is bad, remember, it can always be worse. Find gratitude in what good you have right now in your life and be thankful for that. For me, right now, at this moment, I’m grateful for you coming back and giving me an update. Thank you.
Please keep me posted.
Big hug.
Steve