I’m unemployed since 9/4/08 and my work is in the IT field. I collect unemployment of about $1,160/mth. My husband is a Maintenance Mechanic and brings in about $27k a year, or $1,600 after taxes and deductions.
I used to make upwards around $45k as a programmer before I got sick about 5 years ago. I’ve also had 5 surgeries within that 5 year period and now deal with fibromyalgia and the medical bills are killing us, but we are current on all bills. I’m also paying COBRA for my healthcare.
However, for the last 4 years or so we have been borrowing from CC to pay our monthly bills that our income does not cover. We have close to $80k in CC debt, $100k on mortgage with no equity, $48k for my student loan debt, and about $10k in medical bills.
Our monthly expenses – just bills – comes to around $4k. I handle the finances and I’ve shielded my husband from the stress I go through to pay the bills. I’ve talked him into signing CC checks to deposit into our checking account in order to cover the bills.
My position is that I would rather pay the cash advance fee than deal with creditors calling us and harrassing us – of which I feel it is their right to do so because we used the credit and we do need to pay it. I feel like we are getting closer to bankruptcy and I’m so scared of losing our house. I dont know what to do.
My question is – what do I do? What is your advice?
Now is the time to step up and take action to stop this slow motion train wreck from happening.
There are two immediate steps that you must take. The first is that you need to share the reality of your situation with your husband. He is just as culpable in the shielding of information here. While you’ve been keeping the truth from him, it does not sound like he’s make much of an effort to look.
The deception has served both of you. It has prevented both of you, you from confronting the truth about your financial health and him from having to deal with it. Now is the time.
So what will happen. At first he will be pissed off and upset. The air might be chilly for a few days but it will thaw. The key here is for the two of you to look at the reality of the situation and face it, together, with eyes open. Remember, “for richer or poorer, for better or worse”. If your marriage is strong, and you are a team, this can actually bring you closer together.
Just make sure that you’ve got all the details at hand and documentation of the debt to show him if he asks questions when you talk. Guys like that.
Next, once you’ve had that discussion you need to immediately stop borrowing from credit cards or taking cash advances. This is clearly money that you can’t afford to pay. I’m not going to judge you in anyway for having done that, just stop doing it.
Money problems are solved with lifestyle changes. Sounds odd, doesn’t it. But in order to get your life to fit within your income, it requires you to make changes in the way you live and spend money. Maybe you’ll become more frugal, or enjoy cutting expenses more that working harder. The choice is up to you. The bottom line is that what needs to happen is that you need to increase your income, reduce your expenses or a combination of both to get your life to fit inside your income.
It certainly sounds like bankruptcy is in your immediate future. You have no equity in your house so I doubt you are going to lose that.
After you’ve had that chat with your husband about the reality of the situation, and the two of you are ready to face solving this situation, I think you both need to go to a local bankruptcy attorney and have a free bankruptcy consultation where you can discuss your situation and how bankruptcy might impact you. Meeting with the bankruptcy attorney will give you facts to deal with and help to eliminate the fears that are currently racing through your head.
Bankruptcy won’t discharge your student loan debt so you are also going to be left with that. One thought is the Income Based Repayment Plan (ICRP) to get the student loans adjusted to fit within your income. See Tiffany is Behind in Student Loans, Late On Other Payments, And Looking For Hope.
You’ve also got to tackle the job issue. While getting a job is tough these days, even for IT people, I guarantee that it will be easier and less stressful once you deal with the massive financial stress that is pressing down on you. Financial stress also creates or exacerbates physical conditions like fibromyalgia. So dealing honestly with your financial reality, while painful at first, will make your life better moving forward.
Finally, there is nothing that prevents you from repaying your creditors after bankruptcy if you feel you must repay them. At least you’ll be able to repay them at 0% interest with no collection pressure.
Nancy, this is the moment that you need to stop living in fear and stand up and take charge of your life. You can do it. Your life will be better for doing it. I believe in you.
Contact me on Twitter @GetOutOfDebtGuy and let me know how the conversation with your husband went.