Our Debt is On My In-Laws Cards. What Do I Do Now? – Darla

“Dear Steve,

My husband and I have about $50,000 in credit card debt. A portion of it is related to my husband’s second job- a landscaping business. The majority of the debt is because we have used credit cards during months when our everyday expenses could not be covered by our salaries. We are not frivolous spenders- most charges are gas, groceries, business expense etc… Part of the problem is half the debt is in my in-laws name-several years ago they suggested we transfer some of our balances to their cards because they had much lower rates than us. We are current on all of the cards but we still have to use them to make ends meet. We do not want to file bankruptcy because we feel it’s our debt and we need to pay it. We just don’t see any light at the end of the tunnel and don’t know what to do.

We don’t know how to get this debt paid off and part of the problem is that half of our debt is in our in-laws names so we can’t include it in any debt consolidation type process. What should we do?


Dear Darla,

Well this is going to be a difficult, tough and possibly uncomfortable route out.

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The problem is that when your in-laws offered to help you by allowing you to transfer some of your debt to their cards, they assumed responsibility for that debt with their creditors. They now owe their creditors, you now owe your in-laws.

But let’s first look at the big underlying problem I see. It seems impossible to justify keeping the business going at this point. If it is costing you more than you can make, it’s not making you money, it’s costing you money. If the debt is the result of running the business and it costs you, for example, $2 for every $1 you make, it is a black hole that will suck in your money and leave you with nothing.

The universe is full of black holes that destroy things.

It sounds to me you are left with few good options here. It seems you will:

  1. need to stop doing what it is that is driving you deeper in debt;
  2. strongly consider bankruptcy to del with the debt in your name; and
  3. then repay your in-laws after bankruptcy as best you can.
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I would suggest you click here to find a local bankruptcy attorney and go talk to them quickly. The reason time is of the essence is because without intervention this is already a downward spiral that is only going to accelerate and eventually lead to a harder landing.

The only way out of this spiral is to start making $3 for every $1 it costs to run the business and slowly dig your way out. While it is a possibility it is not a realistic expectation that your husband will be able to double his rates or work twice as hard as he is now.

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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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