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We Are Not Even Treading Water. Should We File Bankruptcy? – Rachel

“Dear Steve,

My husband and I have approximately $7000 in student loans, with $3,900 of that amount in voluntary forbearance. We owe $5,000 on a car that is worth only about $3500. The payments on this car are $185/month. we also cannot afford the insurance on this car, which is about $80/month.

I have a LOC with my bank on which i owe $600, and have been struggling to make payments on. We have somewhere around $10,000 in medical bills, most of these are past due. One of these medical creditors are garnishing 25% of my husband’s wages. he makes approximately $1000 every 2 weeks, before the garnished amount is taken out.

I am a stay at home mom to our two children, ages 4 and 9 months. We live in a house owned by my husband’s mother, rent free. We are currently struggling to get back on our feet after my husband was unemployed for 4 months (during which we lived on my earnings from a part time job). Because of the lack/cost of daycare in the area we live and my husband’s unpredictable hours, I am unable to work outside of the home.

What would be our best option to get back on our feet? i feel like we aren’t even treading water anymore. Should we file for bankrutcy? or should we consider a debt consolidation loan or credit counselor?


Dear Rachel,

The advantage of giving advice is that I get to share my opinion and in this case I have a fairly strong one. I think you need to go bankrupt, yesterday.

If your situation has swirled around the bowl to the point where you have wound up with a wage garnishment, that’s serious.

But my first thought while reading your question is that the lack of a permanent response to the current situation winds up hurting the kids directly and indirectly.

There is no need talking to a credit counselor or debt settlement company. You can either click here to find a local bankruptcy attorney or if you think you may be eligible for legal assistance, you can click here to find local legal help.

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One more consideration, based on your income and household size you may be eligible for public benefits that can help lessen the financial burden after bankruptcy. There are many benefits available, you just need to make sure you are qualified for them, and ask.

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.


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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