Our Monthly Payments Are More Than We Make. – Chelsey


“Dear Steve,

My boyfriend and I pay more a month in payments than we make in a monthly income we have 2 credit cards maxed, one $1000, $8000. A 1890000 mortgage, which payments are $1200 a month. a $15 000 new vehicle, a $20 000 line of credit, $8000 student loan, and $3000 in small claim loans.

My boyfriend is currently unemployed, and I am making only minimum wage. My boyfriends credit is maxed right now, we tried everything from applying for a second mortgage, but was informed inorder to get money our house needed to be of value of $250 000, but because of the economy right now its only worth $200 000, They wont let him extend his line of credit, he even tried to put land he owned up for collateral.

I am only 20 so I don;t really have much credit besides my $1000 credit card, and my $8000 student loan, and a $1000 small loan. We need at least $50 000 to consolidate all our debt besides the mortgage, but have no idea what to do. If I went to the bank and tried to get a loan, or line of credit and we put our house up for collateral (because its in my boyfriends name) would this be a solution? or maybe getting a cosigner? Im honestly lost right now, I just know i dont want to resort to bankruptcy at the age of $20 Please give me advice!


Dear Chelsey,

I suspect that you had lived up to the limits of your previous income before your boyfriend lost his job. And then living on remaining credit during these bad times.

Budgeting is not going to fix this situation. Only a new job for him or bankruptcy will.

I think you need to go see a local bankruptcy attorney and strongly consider bankruptcy. If you are still living on your minimum wage alone, you might even have to give up the house. The bankruptcy attorney will probably offer you a free bankruptcy consultation so there won’t be any charge to go in and learn more about bankruptcy.

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Bankruptcy feels really bad. It just does. But that doesn’t mean it is not the right step for you to take. In fact, I could make the argument that in the face of no reasonable expectation of being able to offer any repayments at all that bankruptcy is a responsible step to take face your situation and take some action that will allow you to move ahead.

All of this is sad and stressful but it is what it is right now. Even in bankruptcy you will still be left with the student loan debt. And even without your debt after bankruptcy, surviving on one minimum wage salary alone is going to be really hard.

You are young, this is unfortunate, but it is not terminal. You can rebuild a new financial life from the ashes but the first step is going to get through the denial about how bad your situation is. Honestly, I can’t see a probably path to dig yourself out of this hole with your income and debts, except for bankruptcy.


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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