At the end of our rope

What is the name of your state? Colorado

My husband and I are at our wits end. We don't know which way is up!

Our income is around $1900 a month but that's only if hubby gets the hours at work which doesn't happen very often. I am disabled and on SSDI. He is a sub-contractor - paid in cash - no taxes or anything taken out. We know this is going to bite us in the butt when tax time comes but it was the only job he could get after 6 months of being laid off (he is still trying to find another job though).

During that time we got 4 months behind on our mortgage and we ended up having to take loans on our vehicles to get current. And had to use our credit cards - which were paid off - to buy groceries and other necessities (car repairs, doctors, etc)

Now we are 2 months behind on everything - credit cards, utilities, car insurance, car loans - except our mortgage which is a month behind. We are going through a rate reduction program through FHA that allows us to skip a month's payment after we close beginning of July. It isn't costing us anything out of pocket and will save us almost $200 a month.

We owe about $5000 in credit cards. Our car loans total about $4600. We are tired of the creditor calls!

We just can't see how we can catch up on all our bills! Not with my husband's income varying so much from week to week.

Is bankruptcy the best option for us? My husband filed ch 7 and it was discharged in 1996. Or should we go through one of those debt reduction things or maybe even consumer credit counseling? We just feel like we are at the end of our rope and are so tired of all the stress this is causing.

Thanks!

[Ladynred]

I hate to say this, but you really don't have that much debt compared to so many others who come here. Although I do understand that if its too much for your income and you can't keep up then that load can be unbearable.

Credit counseling and debt consolidation/negotiation places are, for the most part, bad news I'm sorry to say. Most of them will hurt you more than help you in the long run. They really can't do much that you cannot do yourself with some time and patience.

I would try contacting your creditors and ask if you can be put on a hardship program. Explain your unpredictable income problem and see if they'll put you on one of their programs. These are typically good for 6-12 months and generally reduce interest rates and may waive late and other fees for that time, allowing you to catch up. If your husband is looking for a job with a more reliable income, that will help your situation.

I would start there. You can always call for a couple of free consultations with bankruptcy lawyers to find out what you'd be facing.

You can read more about bankruptcy here:
[url]http://www.thebankruptcysite.com[/url]

Thanks!

I know we could get caught up if just given the chance, but with our history with our creditors I don't know if they would be willing to work with us. The mortgage company told us that we didn't qualify hardship because we had too much debt and not enough income. Well, duh! That's why we need help! <shaking my head here>

But I guess it would't hurt to try with the credit card companies. What do you suggest if they won't?

[Ladynred]

If they won't put you on a hardship program now, let the bills go for another 2-3 months and they will likely be more willing to put you on it.. anything to get money and avoid a charge-off (write-off of the account as a bad debt). Unfortunately, that would mean the creditor calls will only get worse. The closer you get to charge-off, the better your chances to settle the accounts at a lesser amount too. Some will go as low as 35%, other's won't. If Discover is in your wallet, they are nasty and they WILL sue you for just about any amount.

If they won't work with you at all and you don't want to have to wait them out and deal with the calls (get caller Id, don't answer anything that says 'out of area' or 'unknown' !), then bankruptcy would be your way out.

I don't have a Discover card. 3 Capital Ones and one Providian. Capital One was pretty cool before but Providian is NASTY.

Thanks for your help!