My husband lost his job about 2 years ago, which reduced our income. He has had some medical problems which we were trying to resolve before he got another job. We have about 45k in debt ( not including my student loans)and only about 10k in home equity. Gross salary of approximately 58k right now, hopefully he will get a job after he recovers from his upcoming surgery.
We have completely depleted our savings just to keep our heads above water and are currently not behind on any payments. We are quickly hitting the low point and will be falling behind shortly. We are considering our options of DMP (the payments are about the same as what we are paying now, not sure if we can do it) debt settlement or talking to a bankruptcy attorney. Are there any other avenues to consider? I don’t want to do debt settlement, but am not sure we can keep paying what we are paying monthly. I have already reduced our monthly expenses as far as I can at this time. Should we consider trying to refinance our mortgage and cash out to pay as much off as we can before getting into a DMP? We are just not sure which way to go, any advice would be very much appreciated.
It doesn’t appear that you have enough home equity to really even consider trying to pull cash out.
From what you describe, the most important thing is cash, and until your husband can find steady work, you are going to just have to let the debt payments go and focus on the necessities.
You should certainly meet with a local bankruptcy attorney and explore that option. That doesn’t mean you have to file right away, but explore that option. Remember that a debt settlement program does not “reduce payments”, even though it appears to be the case. Click here to find a local bankruptcy attorney.
The reality is that you are trying to raise enough money as soon as you can to offer a settlement. Often times debt settlement is pitched as low monthly payments over several years, which is not the best way to look at it.
You are simply not paying creditors while you hope to save up enough money to eventually settle. The lower the amount of your monthly savings, the longer it will take and the more likely you are to be sued.
It seems clear to me though, that until your husband is gainfully employed you are going to have to let your debt payments go. If he finds employment and you can save up a nice chunk of money to negotiate your debts with than great, if not, well, that is why you want to meet with a bankruptcy attorney so you are aware of how that option will play out for you.
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