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

I Will Not Do Bankruptcy But Have No Income in My Name. – Monica

“Dear Steve,

I have massive credit card debt. I thought I had it under control, but now that I stay at home with our son, I’ve realized how out of control it is. I have 3 major credit cards, 2 with balances over 10,000 and one with a balance of 6700. I thought i was “earning money” by paying bills (gas, grocery, utilities) with a rewards card, but when it got to the point I wasn’t paying the monthly balance off each moth, I started to get nervous. My husband makes good money, and should be able to support our family of 3 with it, but I have dug us into such a hole, I don’t know when/how to get out. I’ve considered going back to work, but once daycare is factored into the monthly expenses, I wouldn’t bring home more than daycare would cost.

My total minimum payments equal $875 because one card is on a promo 0% interest currently. I ideally need the payments to be about $500/month to fit into a budget. My husband will get an annual bonus in March 2013 where the amount could be between 10-15k+, but I won’t know until February. That entire amount would go to paying towards the debt.

My current average credit score is 734. I’m ok with my credit taking a hit to get out of this hole, but I don’t want my husband’s affected. I have never missed, been late, or paid less than a minimum payment on anything. Ever. We currently own a home and have had no issues with paying the mortgage. We have about 5K in equity based on what we owe vs. what the house is valued at. We have no savings, retirement, etc and want to start establishing both now that we have a child to consider.

All of the credit card debt is in my name. My husband is an authorized buyer, but the cards are all in my name. I can’t apply for a consolidation loan because I, personally, have no annual income. What can I do to get out of this situation without dragging my husband’s name and credit through the mud as well? I will not do bankruptcy and am hesitant regarding the risks of debt settlement, but are those my only options? We live in a marital property state (AZ), how will this affect my solution?

Please help! Once all of this debt is paid off everything will be paid cash only! I’m so over this cloud that follows me everywhere and now that I see how it is affecting my family the guilt is insurmountable!

Monica”

Dear Monica,

First off, don’t overreact here. Once you get out of this mess you should not go to an all cash basis. It will tank your credit score when you need it most in the future.

The debt is in your name and your husband makes the income. You are not going to deal with this alone unless you decide to file bankruptcy yourself.

If you want to try to deal with this as the team that you are you will need to be open and honest with your husband and then we can all approach this together. If your husband doesn’t want to help, then it’s most likely bankruptcy for you.

If your husband is willing to work as a team and dig out of this hole then we can first look at an unsecured debt consolidation loan through LendingClub.com or Prosper.com.

Why in the world is bankruptcy off the table for you from the start?

In the meantime, take a look at the following information.

I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.

Then use the free How to Get Out of Debt Calculator to review your options.

Once you’ve identified a company you want to work with, then follow my step-by-step guide on how to check out a debt relief company.

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.

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