My Husband Was Laid Off and We Lost Our Six Figure Income. – Cindy

“Dear Steve,

In Nov. ’07 my husband was laid off as a homebuilding superintendent. His salary was 6 figures, we were in the middle of a huge remodel on our home. The bank stopped making loans to the buyers of his homes, the job site (an entirely new community) was shutdown, he was laid off after 20+ years in the industry.

The mortgage industry imploded and an entire industry (construction) was decimated. Our remodel came to an abrupt halt but we still have all the construction debt. The same bank that got him laid off holds our mortgage.

They told us to use our 0% credit cards (remember those…no fees or cost for at least a year) to do the remodel. Then when we were done, refinance (which we already were approved for) at the higher appraisal, lower interest and best monthly payment. Our credit score was in the upper 800’s with no lates in our 25 year history. We had $500,000 in open credit at the time. We were very responsible and didn’t live outside our means so it seemed completely reasonable at the time. (It sounds insane now!)

All that has changed dramatically…our remodel was never completed (we have lived with open walls to to the outside elements ever since!), he has not found a job in over two years now, our debt is almost 100k (construction) plus our mortgage of $500k. We have used up all our resources and savings. The credit card companies have taken all our open credit away (we weren’t late on anything at that point)…we lost nearly $300k in open credit in ONE day! But they said it wasn’t our fault, they were doing that to everybody!!!

We were enrolled in the Obama plan beginning last June and made the first two of three payments on time and were awaiting paperwork for the Making Homes Affordable plan when we learned that not only were we not enrolled in the plan but our payments were not credited to our mortgage and we would not be enrolled in the plan (this is said after 30+ bank employees told us for two months that we were) that the bank never intended to even put us in the plan and no paperwork was coming. We didn’t get our money back either.

Since August we have jumped thru every hoop, sent every bit of information requested, got passed around from one person to the next…each with a different story. We have not been able to make our mortgage payment since July but have cont. to pay our ccard bills but starting Jan 1st we won’t be able to even make those either.

The rates and monthly minimums have skyrocketed to as high as our mortgage. The “negotiator” spewed 5 or 6 options that we could do and when we asked for it in writing (we didn’t do that with the Obama plan and you can see that verbal didn’t work) so we could look at what the investors were offering.

We heard two out of the offered options might be doable but that we wanted it in writing. She refused and closed our file saying we declined help! We never declined anything! We just wanted it in writing to have proof that we were in a plan! That put us on the fast track to foreclosure and it took some real doing to get the file back open and on the table again. The next offer came in so high that we couldn’t even begin to entertain that option and we are back to square one. We do not know what to do next or how we can keep this all from swallowing us up.

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We didn’t cause this. We are responsible, tax paying people who work hard. My husband wants desperately to be back at work and he will do anything and has answered every job ad possible. In a nutshell, the bank closed down my husband’s construction site, got him laid off, has kept him laid off as the entire industry worldwide (he has looked everywhere!) is gone due to the mortgage implosion…but the bank was bailed out big time but refuses to pass along the bailout to the taxpayers (us) that got them the bailout in the first place and we are left holding the bag of debt without any hope of getting out and losing everything in the process…we have poured everything into this home that we love and to lose it to the bank that put him out of the job and started this horrible cycle downward to begin with is just too much to cope with.

We need help and fast. We are not getting any help from the bank, our congressman (who promised to help but hasn’t), we are getting the run around that we have read on your site that so many people are going through…we know of so many families like us that are going through the same thing…we are barely making it every day and to see these fat banks rolling in bailout while they withhold all promise of help is beyond fair!!!! LIFE Isn’t Fair Ever but this is ridiculous!

What can we do? Is our only option Bankruptcy? Which one 13 or 7? Does it really save your home? I never thought we would ever be in this situation, ever. Thank you for any advice you can possibly give. blessings!


Dear Cindy,

Is bankruptcy an option, it certainly is and in a perfect world you would have pursued it before spending down all your savings and burning your safety net. But it is what it is now so let’s see what can be done.

Ironically, My bankruptcy was caused by banks shutting down credit which helped to throw me into a bind with my real estate business back in the late 1980s. So I think I have a bit of an idea what you are going through.

Here’s what I know to be reality.

  • Anger gets you nowhere. It might certainly feel unfair but it is the natural circle of life. There have never been any guarantees of income and there never will be. Anyone earning a paycheck today could be out of work tomorrow. Employers hire people at will and can fire anyone for anything at anytime. Nobody is guaranteed a paycheck.
  • People on the other end at the banks and creditors are just pushing paper and punching a clock. You are nothing but a file on a desk. It is all a giant process and most inefficient at that. When a process doesn’t make an allowance, like for a written offer, you won’t get one.
  • The world isn’t going to return to what you knew. You are going to have to change to find a new world. That might mean moving to where jobs are plentiful, even if it means a lower income. Staying where you are is only possible if you move to a different industry. Think about it like the farms in the Oklahoma Dust Bowl in the 1930s. No matter how much they wanted it to rain and save their crops, it just didn’t. Many packed up and moved to more opportune areas, like California at the time.
  • The advice you got about putting the debt on the cards was horrible to begin with. No credit line, either on a card or some other line of credit, is guaranteed. The bank giveth and the bank can taketh away, at any time and for any reason.
  • There was never much of a chance the loan modification was going to be approved. The vast majority of loan modifications were either not approved or did not result in meaningful help. Many found their mortgage payments were the same or higher.

If your home has open walls to the outside elements and there is no work where you live, I have no idea why saving the house would be either feasible or a logical approach.

But the good news is there is a legal option, bankruptcy, that would allow you to reboot your financial life and start over, leaving this terrible baggage of debt you can’t possible handle, in the past.

I would urge you to click here to find a local bankruptcy attorney you like. Make an appointment for a free consultation and you and your husband need to go and meet the attorney. Ask all the questions you can and then go home and mull it over. You don’t need to make a decision that day, but soon.

These actions and changes you will need to make will be difficult, but the sooner you start taking steps to move forward with your life and accepting your current reality, the sooner the stress and fear will be resolved.

I hope I haven’t been too blunt but I need for you to see the situation clearly and stop this very minute trying to repair the damage that has already been done. Instead, I need for you to turn around and start fighting to make life better for tomorrow. I need you to get back into any position where you can start saving again and enjoying life.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Damon Day - Pro Debt Coach

Steve Rhode

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