Ask The Get Out of Debt Experts Getting Out of Debt How To Get Out Of Debt

We Just Can’t Get Caught Up on Our Bills and Debts. – Beth

“Dear Steve,

Divorcee’ with one child, remarried, living in home that is mortgaged under my ex-husbands name only and the deed is in my name only (don’t ask how-lol). Remarried we both work full time jobs

My credit WAS descent, until the wedding, honeymoon, car issues and he got laid off. Now things are looking up, but my cards and payments are so far behind, which ruined my credit (499) and I cant get caught up. The house is mortgaged through PFHA and is reasonable. Being that the mortgage is in his name, it doesn’t help nor hurt my credit. The balance of the mortgage is about 30,000. The home would definitley appraise at least $130,000. I have worked for our county for over 4 years and make around 25,000.00/year and my husbands at about 50,000. I would like to take a personal loan out just to catch up the bills and pay off the credit cards. But because my credit is so bad, noone will even look at me/ or should I try to refinance/purchase the home? Im not even sure what that would be considered because of the whole mtg/deed thing. Please advise me.

Beth”

Dear Beth,

For me, the most important issue here is that you said in the current situation you can’t get caught up. That goes a long way to clarifying what I think we need to do.

You mentioned your credit is horrible, but is your husbands credit horrible as well or does he have a credit score above 700? If he doesn’t know he can find out for free from Credit Karma.

If his score is above 700 then he may just be eligible for an unsecured debt consolidation loan through Lending Club. If you do decide to get an unsecured debt consolidation loan through LendingClub.com let me know and I’ll gladly help to fund it for you.

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If his credit is dinged as well then the house issue presents a bit of an issue if you were to go for a second chance solution and get this under control. It would be possible for you to force your creditors to take a lower payment and give you a fresh start but it would most likely have to be with a chapter 13 bankruptcy. Under that approach your monthly payment would be based on what you can afford to pay and after three to five years, any remaining balance due would be eliminated.

If you’d like to learn more about bankruptcy you can click this link to find a local bankruptcy attorney.

I’d suggest you first read How to Get Out of Debt.

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

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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.

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