“Dear Steve,
I have read most of what is on your web-site and none of your helps apply to us. We are currently probably over $22,000 in debt. It may not seem like a lot to you but to us it is enormous. We have NO car payments and haven’t for over almost 20 years. We pay cash for used junk boxes. Our mtg payment is $458.00/month and that is without tax and insurance, tack on about $125 to cover that. We cannot even rent a 2 bedroom apt for even near that. We have 7 children living at home. Our eldest son is in college on a free ride academic and financial scholarship. Our eldest daughter is married, so that is 6 children under the age of 18. We are 9 people living in an 1800 sq. foot home in a not so great neighborhood. There are several houses on our street in foreclosure so we probably couldn’t get what we paid for it at 97K about 11years ago. Selling is not an option. My husband use to have a fairly decent job but due to the fact this his boss was incompetent and did alot of things wrong, my husband was made the scape goat in 2006 and was fired. Up until then we were keeping our heads above water.
He worked two other jobs in his trade for about a year and a half but because he was under qualified for those positions, and they were the only ones offered to him, he basically lost them too. He went 8 months searching for a job with no success. Finally someone referred him to a completely different field as a 911-Telecommunicator and he was hired instantly. He is the best one we’ve been told over and over and they all love him there. This job paid less than half of what he was making in 2006, thus this is when it started to get bad. We had to use our credit card to buy things like hot-water heaters, car repair, dentist bills, doctor bills, gas, clothes and sometimes food. My husband got a second job at the same time as a pizza delivery man and that worked for a while until the recession hit and he couldn’t make what he spent in gas. He also at the same time was going to college full-time, on 100% financial aid and received his Bachelor’s Degree at 49 years old in May 2010. I was so proud of him. So he worked 2 jobs, studied full-time and raised 8 children.
We have no luxuries and have had NONE for years. I cut everyone’s hair including my own and no I am not trained. I have not been able to work because of his revolving schedule and no one else to care for the children nor take them to their extra-curricular activities like Marching Band, plays, girl scouts. Our children do not get private lessons or private school. We buy all our clothes at the good-will or get them free at church. Our home needs repair and so doesn’t our cars. We are down to one car now the other has no brakes.
We have not had a family vacation since January 2004. My husband saved all his spare change for 8 years and we took 4 days to go to Cincinnati for our 25th anniversary. It was the first time we had been alone in over 12 years. He managed to save just above $600 so that was our splurge. Nine days later, in July 2010 my husband had a stroke. It was minor and he recovered and is back to work but cannot work overtime too much because he is exhausted. The docs told him to stay out about 3 months but he went back after less than one because of our financial picture. We now have medical bills ranging in the 3K area. That is included in the 22K I referred to before. We are about to hit our limit on our credit card. We have made all payments up to date yet it is getting to the point now when we just don’t have enough at the end of the month and borrow from peter to pay paul. It is a cycle. I applied for food stamps immediately after my husband’s stroke and we got $687 per month in food stamps which has been a tremendous help. My kids are all on state-sponsored health insurance again, a tremendous help.
So where do we cut out? The yearly taxes are due at the end of this year and our home owners and car insurance and we don’t have it. I had always had it before but this year I do not.
We are considering defaulting on the credit card which is at $325/month now. Do you have any suggestions?
Desperate in KY
Kristina”
Dear Kristina,
The good news is you’ve already looked into public benefit programs and you are getting those benefits. The solution here is very clear, you need to go bankrupt.
With your husband’s medical situation, the number of kids still at home, and the overall financial situation it is unlikely that if you went out to find part-time employment you’d be able to radically turn this situation around.
The more logical solution is for you to seek pro bono (free) bankruptcy help here. And since you are already on benefits you’d most likely quickly qualify for the free help to go bankrupt. The odds are pretty good you’d qualify for a Chapter 7 bankruptcy and your debt would be discharged in a few months.
Immediately after filing you would stop paying your creditors. You would then be able to save the $400 or so each month so you can buildup an emergency fund in a savings account.
At this point there is almost no further to fall. It’s time to stop slipping down the slope, take decisive action, and do the most responsible thing you can for your kids and go bankrupt to protect your family moving forward.
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.
Do you have a question you'd like to ask me for free? Go ahead and click here.
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You can begin to work on improving your credit the day after your discharge from bankruptcy. If you follow my credit restoration guide you can expect a substantial improvement within a year. Within two or three years of focusing on rebuilding your credit it should be better than what it is today.
Bankruptcy will be listed on your consumer credit report for ten years and when you apply for future loans you may be asked if you have ever filed for bankruptcy. But the amount of time listed on your credit report has nothing to do with how long it impacts you.
And remember, you are not your credit score. And even if your credit score might be 790 today, it is really not a reflection of your value and overall financial health. It is simply an artificial number calculated by others to identify who is a better target for credit offers with less risk for banks.
Steve,
Thank you so much. I can’t believe how quickly you answered my plea for help. I wrote it yesterday and never even expected an answer due to your volume let alone so quickly. Thank you for your answer. I can’t wait to show my husband who is so stressed over this, I am fearful of another stroke. This will make him surely calm down and gather himself and maybe be able to sleep peacefully, me too. We will do this tomorrow. His credit score has been around 790 or higher most of his adult life and mine close to that. Never ONCE have we been late on our mtg payment and only once in a blue moon a couple of days late on credit cards.I know that our score will take a hit and we are going to have to just bite the bullet and deal with that. It had been a source of pride for me as I worked very hard keeping the bills paid on time for 25 years to get those scores. When will we be able to raise it again? How long does it take, I know Ch. 7 follows you for 10 years but I surely would hope we can build it back up before then.
Steve,
Thank you so much. I can’t believe how quickly you answered my plea for help. I wrote it yesterday and never even expected an answer due to your volume let alone so quickly. Thank you for your answer. I can’t wait to show my husband who is so stressed over this, I am fearful of another stroke. This will make him surely calm down and gather himself and maybe be able to sleep peacefully, me too. We will do this tomorrow. His credit score has been around 790 or higher most of his adult life and mine close to that. Never ONCE have we been late on our mtg payment and only once in a blue moon a couple of days late on credit cards.I know that our score will take a hit and we are going to have to just bite the bullet and deal with that. It had been a source of pride for me as I worked very hard keeping the bills paid on time for 25 years to get those scores. When will we be able to raise it again? How long does it take, I know Ch. 7 follows you for 10 years but I surely would hope we can build it back up before then.
You can begin to work on improving your credit the day after your discharge from bankruptcy. If you follow my credit restoration guide you can expect a substantial improvement within a year. Within two or three years of focusing on rebuilding your credit it should be better than what it is today.
Bankruptcy will be listed on your consumer credit report for ten years and when you apply for future loans you may be asked if you have ever filed for bankruptcy. But the amount of time listed on your credit report has nothing to do with how long it impacts you.
And remember, you are not your credit score. And even if your credit score might be 790 today, it is really not a reflection of your value and overall financial health. It is simply an artificial number calculated by others to identify who is a better target for credit offers with less risk for banks.
Hi Steve,
Back in October you suggested we file for bankruptcy and we were seriously considering it. My husband, the procrastinator who lived in constant denial didn’t move forward on this and I wasn’t going to on my own. Things didn’t get any better even though i started working part-time. Our family life hit the skids and our marriage was in trouble but is on the mend now. Last Friday my husband finally saw the light and we went to see a bankruptcy atty and we are saving the money to retain him. We have decided to this route and will end up paying for the fees but feel it is in our best interest. I know that we will be able to pick up the pieces as the things wrong can now be fixed now that my husband has finally faced reality. You probably saved a family and a marriage with your advice so thank you again.
On a second note you gave me links to places where we could have filed for free under certain programs. Do you happen to have those links? I have a friend who needs them. She is a single mom who wouldn’t be able to get any money to file as she is a student and works part-time and has a disabled daughter. If you could send me those links I will forward them on to her. Again, thank you so much for your help and when this is all said and done, I hope to be able to contribute to your ‘service’ as you really have helped us and taken such a huge burden off of our backs.
Better late than never. That denial is tough to work through. I just wrote how women seem to be more aware of the situation before men, See this article.
I’m so grateful for you updating me on your progress.
The link you asked me for can be found here.
The minute you get the bankruptcy discharge it’s time to start rebuilding your credit. It’s actually pretty easy. See Chris Has Bad Credit. I Show Him How to Easily Get Good Credit.
All I ask in return is just for you to come back as often as you can and comment on other reader questions so you can share the lessons you learned. You might even want to subscribe to the reader question feed to stay in touch.
Your kind words make my day.
Thank you.