We Spent All of Our IRAs And Still Deep in Debt in Hawaii. – Gayl

“Dear Steve,

Lost my good paying professional job 2 yrs ago. Have worked less than part time since due to chronic health issues and economy downturn.

I’m 55; husband is 65. Spent savings on getting a shop built at our home so he could run his woodworking business at home vs paying high rent.

Last year was lean…husband nor I brought income in for 1/2 year. Our credit cards are maxed. Not behind in mortgage and home is worth more than we have in it. It’s falling apart and Mortgage, taxes, insurance are $2200/mo.

We live in Hawaii; home/shop are in both names: Tenants by the entirety. (Mortgage is in my name only)

His business is an llc, sole proprietorship. Our IRAs have been cashed out. We owe $72,000, mostly credit card..($20,000 of that is an unsecured bank flex line of credit..jointly held) Most of the debt is in my husband’s name, although I have 2nd cards. $7,000.00 of debt is mine alone.

We have been doing our homework, finally. Husb and doesn’t want to sell home and shop; wants to avoid bankruptsy. We thought we could get out of this. Business is picking up..but it’s not working. We’ve been looking at debt negotiation but after much homework maybe it’s not the best option.

If only my husband files bankruptcy, ch7 what are the chances the home and his place of business could be exempt?

And if that’s possible can he declare the $20,000 joint flex line of credit? The house is losing it’s “sacred cow” status…would it be better to try to sell it on our own before? What options do you see?

Thank you for this great site….and help,



Dear Gayl,

It sounds like you could easily file a chapter 7 bankruptcy and discharge your debt quickly while keeping the house.

The biggest issue here is you are making a lot of assumptions without doing your homework. You should really click here to find a local bankruptcy attorney and schedule a free consultation.

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If you husband’s fear of bankruptcy has been holding you back from making some reasonable and logical decisions then the only thing that’s happened is you’ve flushed your IRAs down the tubes.

The more important issue here though is let’s say you do file bankruptcy and discharge all your unsecured consumer debt, are you even making enough to cover your basic living expenses and run the business?

From what you shared, that’s not clear at all.

It might just be you are so far down the income hole that trying to bargain your way out of debt is not reasonable. You need to look at what life is possible within your current income.

Before you do anything I would urge you to meet with a local bankruptcy attorney and collectively come up with a plan to deal with your situation so you are left in a position of being able to move forward with your lives.

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


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.
Damon Day - Pro Debt Coach

Steve Rhode

1 thought on “We Spent All of Our IRAs And Still Deep in Debt in Hawaii. – Gayl”

  1. Thanks Steve,
    We’ll talk to a bankruptcy attny. Good question re income! We’ll have to look at all the numbers again. Will update progress. Thanks again, Gayl.


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