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My Husband is Worried About Losing His Job if He Files Bankruptcy. – Sarah

“Dear Steve,

My husband and I have $25,000 of debt on a Chase Visa Card. The card in his name with me as a co-signor. He is in a commission only job that has suffered greatly in recent years and I have a regular job making 47k a year. We live in Florida and have one child. We have a mortgage, a home equity line, 2 car leases, and all the other usual bills but we spend virtually nothing on anything discretionary we have become extremely frugal.

We are basically living paycheck to paycheck and are late on everythign every month (except our mortgage – so far) but we catch up before going beyond 30 days. Right now we are 15 days late on our Chase card minimum payment of approx. $550. Catchng up before hitting 30 days is getting to be almost impossible. The Chase card debt is the one that is crippling us. We have considered bankrupty but it would result in my husband losing his position (terms of his agreement) unless we could some how hide it (doubtf ul). What do we do?!

Should we contact Chase direclty about our inability to make minimum creidit card payments on $25,000 debt? Give it to them straight and ask what they recommend we do?! Or should we attempt a DIY settlement with them? We hear Chase do not work with settlement companies but will sometimes work with an individual? I don’t know how much we could raise over a 6 to 8 month period – maybe $8,000? Should we contact Wells Fargo our mortgage lender (with whom we have a flawless record currently) and see if we can get somekind of modification/forbearance that will allow us to save some money to use to attempt a direct (DIY) settlement with Chase credit card?

Sarah”

Dear Sarah,

Thank you for asking your question. You are wise to note the path you are currently on is not sustainable.

READ  I’m Broke in Florida and Can’t Afford to Go Bankrupt. – David

You’ve made some good suggestions but I’d like to explore one point first. You said your husband could not file bankruptcy because of the terms of his employment. What kind of work does he do?

I’m not saying bankruptcy is the only answer, just want to explore all the options first. I’m most interested if there is something in writing from his employer or this is an assumed position. I’ve found that in these economic times, employers have seemed to be very understanding.

Our choices are to get clarity on the bankruptcy position or send you down a possible DIY settlement path that could wind up in you getting sued and a wage garnishment for him. I don’t think the wage garnishment would go over any better with his employer. And if we ran into that position we’d probably be looking at bankruptcy to stop it.

Does this seem like a reasonable approach to gain clarity on the bankruptcy issue first?

Please post your responses and follow-up messages to me on this in the comments section below.

Sincerly,
Steve

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.

1 Comment

  • THANK YOU!  Yes, it is in written terms of his agreement – filing for bankruptcy will constitute ‘default’  and default results in termination. We do not know if the firm would carry it out or not but that is the terms.  My husband has to hold a fidelity (NOT surety) bond of $10,000.   Would Bankruptcy impact his abilty to renew that bond? There is no HR dept for his work – its just the owner of the firm – Josh – he’s a good guy but very ‘proper’.  He provides a lot of the ‘leads’ so if he knew bankruptcy was even being discussed it would change his view on my husband right away.  Is it automatic that Josh would find out?  At what point would he find out?  My husband is a ‘1099’.  Would Josh and my employer (a large corp. – but there is no such clause for me and I am W2) be contacted as part of the bankruptcy proceedings?  If we knew we had a certain amount of time before ‘cat got out of the bag’ (likely resulting in his termination)  its possible my husband could look for another sales position (one without this clause).  He has options in this regard, but would prefer to stay in the line of sales he knows as after 3 bad years its starting to improve.

    THANKS!

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