Our Mortgage Went Up and We Are Going Down. – Tami

“Dear Steve,

My husband works a sales job that is 100% commission. I am at home with our small children. From 2008 to 2009 he took a 100k loss in salary.

We purchased a new home in 2008 when we were making plenty of money to afford it. Knowing that the economy was going to take a hit we paid off a 10k credit card, and put 20k in the bank as savings for months he came up short.

Now 14 months later we are through our savings, have borrowed money from family, maxed out our credit cards trying to stay afloat. We refi’d one car and attempted to do the other in order to lower the payment.

Beginning this year our mortgage went up $400 because of the taxes on the new construction home being not estimated high enough.

We have finally reached the point where we will not be able to pay our mortgage next month and are not sure what to do.

We attempted to refi our home and did not quality. We contact our lender who is sending papers to do a loan modification but she told us the best chance we have to get help is to skip next months payment.

Do we do what the lender said and skip our next payment in order to get qualified for the loan modification or more help with our loan? We have 87k in our 401k but don’t want to touch that as we feel it will be throwing the money away. We have done all the right things put away money, stay current on all our debt and pay over when we can and are still struggling what should we do?

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.


Dear Tami,

First thing we need to do is figure out what lifestyle is sustainable for you on the current income. Once we can identify that then we can work the problem backwards to a solution.

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After you pay the new mortgage payment, how much, if any is left over for your credit card payment each month? How much current credit card debt do you have?

Bankruptcy is a legal option for you but my concern is that even without the credit card debt can you afford your house, utilities, etc?

If you can answer these questions for me in the comments section below I can give you a better opinion.

Damon Day - Pro Debt Coach

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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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