How Do We Get Out of Debt When We Owe More Than We Make in Net Income? – John

“Dear Steve,

My wife and I have over $30000 in credit card debt, $20000 in a 2nd mortgage and owe my father $9000 (and we haven’t even begun to pay him yet). We pay roughly $900 a month in minimum payments.

We cannot say for sure how it got this bad since we never tracked our spending, but we believe that most of this is due to the fact that, until recently, I was the only source of income. My wife stayed at home to take care of our 2 boys with special needs. My guess is that we always came up short and paid for things with credit when we didn’t have cash. We kept on telling ourselves it was okay, at least we weren’t spending it on frivilous things. Ironically, if we had, we could just stop “blowing” the money and sell the frivilous stuff. We don’t even have that as an option!

We are now in a Catch 22. When our income was lower, we qualified for state sponsered health insurance. Now, since my boys are doing better and our debt is so bad that my wife went back to work, we don’t qualify for the free health insurance anymore. Ironically, our income is too high to meet their criteria. We could barely pay the bills with both of our incomes as it was. Now, since we have to pay $400 a month for health insurance (plus my company lowered my income by $100 per month) we will owe more than we both make per month in net income.

How do we get out of debt when we owe more than we make in net income?

What can and can’t you do for us?

Will your services hurt our credit rating?

Are you in good standing with the BBB?


Dear John,

What I do through this site is provide free advice and resources. I’m sorry but I do not take on any individual client’s to manage their debt. It is more than I would want to tackle right now.

Outside of mainstream solutions like borrowing or refinancing your debt through a bank or mortgage company, every other solution has the potential to make a mark on your credit report and lower your credit score some. But, in my experience, by the time someone gets to the “can’t make ends meet” stage they have already lowered their credit score by maxing out their cards or having such a high debt to income ratio that damage is done.

If you want a guaranteed way to get out from under this mess and improve your credit than the solution is simple, pay your debt off in full. But if you could do that, you would have already.

Your BBB question is interesting. People think the BBB is somehow an investigator of good businesses. It is not. The BBB is a franchise opportunity which simply reports the status of complaints against a business by a consumer. There are all sorts of ways around having a complaint reported to the public so I would not rest easy if you checked out a business with the BBB. Instead, check with you local country or state consumer affair office.

The only way to get out of debt at this time is going to be cutting expenses to free up extra cash to use to pay down on the debt. But you can’t afford to do that from what you’ve told me.

It looks like your most logical solution is going to be a Chapter 13 bankruptcy (click here for bankruptcy information) or see if you can get some breathing room in a debt management or credit counseling program. Click here for credit counseling information.


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.
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2 thoughts on “How Do We Get Out of Debt When We Owe More Than We Make in Net Income? – John”

  1. I was with Freedom Debt Relief. They talked me into Consolidation Plus. What they didn’t say is that I only had 1 debt left. I should have finished the program now. They seemed to be short of funds. now I owe more than the debt itself + $775 to settle that. I have tried calling, I get calls when I tell them I am not available. I keep asking for a copy of that agreement, I want it in paper in the mail. Still waiting for that.

    • Hi Bobbie,

      We’re so sorry to hear you’re dissatisfied with the program. We would like the opportunity to speak with you and see what we may do to resolve your concerns. Please reach out to me directly, at (480) 800-5951 for further assistance.

      Thank you,
      Supervisor, Client Services


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