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These Are Scary Times For Us. We Are Not Used to Money Problems. – Jennifer

“Dear Steve,

Hi Steve,

I have been unemployed for a year and a half. My husband is in the construction industry (and while I probably don’t need to say more) he has been employed on and off again for almost a year. We are both currently unemployed. We have both always worked and have been fiscally responsible. We have excellent credit. However, despite our appeals to our mortgage note holder, creditors, etc. we have not qualified for any reduction in rates either because a. we are unemployed or b. our debt-to-income ratio is too high. We have two children 4 years and under. And our unemployment does not cover all the bills. We are in the negative every month and have exhausted all of my 401-K benefits. Our house was on the market for over a year and while we do not have negative equity, we would have to drop our price to be competitive and this would leave us with no cash in our pocket. Given the current state of affairs, we don’t know what to do other than stop paying our mortgage and creditors to survive. The job forecast is uncertain and we are not looking forward to the repercussions of being delinquent.

Given our situation, what are our options? And will we ever be able to recover from not paying our mortgage and creditors? This is a scary time for us and one we are not used to weighing these types of options.



Dear Jennifer,

Unfortunately when i read your question I cringe. I read it as you’ve spent through your 401(k) to try to pay creditors and try to maintain this situation. Well if you have, we’ll have to use it as a painful lesson on what not to do again in the future.

You need to think about unemployment as a desert, an income desert. Draining a 401(k) to walk further out in the desert only leaves you more stranded and with less options, not in a better situation.

READ  I Got Laid Off and My Credit Cards Won't Reduce My Monthly Payments. - Michael

I know you are scared. These are scary times but you need to take some definitive action other than just sitting by and hoping things will change.

Based on what you’ve told me employment opportunities are not good where you live and you can’t afford your bills and mortgage. The solution is you need to consider moving to where jobs are and handing your house back to the bank, stop paying creditors and going bankrupt.

Click here to find a local bankruptcy attorney and make a free appointment to go talk to them. At the same time, while you consider if relocating makes sense for you, make sure the both of you register with every temporary agency in town and take every job they send you on. At times like this there is no job you should be too proud to do, unless of course it is illegal.


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.

About the author

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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