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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,

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

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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.

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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