My Husband’s Business is Starting to Recover But We are So Overloaded in Debt. – Lisa

“Dear Steve,

In 2001 my husband, an engineer, left his company and started a business with 2 partners. The company was doing well and they were giving themselves about $7,000/month in take home pay each. In 2007 we moved to a slightly larger house, increasing our mortgage by about $1,000/month. Long story short – large customers stopped paying my husband’s company in a timely manner and in 10/2008 they basically stopped paying themselves a salary. The business stayed afloat and only a few employees were let go (some of whom have been rehired since). We have 3 young children and I have been working a PT job since 2006.

My husband works about 80 hours a week and has much greater earning potential than me so we have tried our hardest to keep me at my PT job. Basically we are now drowning in credit card debt.

While my husband’s take home pay is slowly creeping back up, we are now almost completely unable to make the minimum due payments on our credit cards.

I had never had substantial credit card debt until this recession and I feel soooo stupid that we are in this situation. My husband has his masters in mechanical engineering as well as his MBA and I also have a college degree. Every month when I charged groceries, gas and everything else it seemed out of necessity.

We have borrowed about $20,000 from each of our parents and can’t borrow anymore. I have been looking into “debt relief” and it all seems like such a scam. However, the situation is getting dire, we can barely pay our mortgage and the credit cards are a mess (about $40,000).

Our credit is already pretty bad (400’s for us both). Should we “settle” the amounts lower or maybe just consolidate for the sake of lower interest rates? In hindsight we shouldn’t have moved, but now that we are here i would like to stay in this house for 8 more years, at least until 2 out of 3 are in college. Is it ever possible to stay in your house if you declare bankruptcy? I fear that is where we are headed.

See also  My Mother Buried Three Kids on Credit. - Theresa

Thank you for reading this.


Dear Lisa,

I think the most sense is bankruptcy. A Chapter 7 bankruptcy would clear all your unsecured debt in a couple of months but even a Chapter 13 bankruptcy has some advantages. At the very least it would prevent the collection calls and keep creditors at bay.

I think you’d get some great benefits out of reading “The Honest and Unvarnished Truth About How to Get Out of Debt.”

Your situation is a good example of why I frequently ask people that are up against the financial wall if they have a great responsibility to fix the past or fix the future.

Now that things are looking up this might just be the time for you to deal with your lingering debt you can no longer manage. I urge you to click here to find a local bankruptcy attorney and talk to them about your situation.

I’m going to give you some homework here. I want you to go discuss your situation with a local bankruptcy attorney. If you don’t “click” with the first one you find, find another one.

After you talk to the bankruptcy attorney I want you to come back to this question and update me with what you learned by posting a comment below.

If we take this is logical steps I’ll get you to a point where you can start looking forward to better times to come.


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.

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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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