Needing an outsider's advice
My husband and I have about $25,000 worth of credit card debt, and currently owe my mother $6,000. We regularly pay our credits (always over the minimum), but find ourselves not really getting out of debt. Last year we took out a home equity loan as our credit cards were racked up then, no sooner had we done that when one of our vehicles had broke down and we needed a new roof, and my husband's work went on strike. We lived off the credit cards in hopes that his work would turn around quickly and we could pay them down..it didn't happen. So now we are in double the debt we were before last summer. Basically it was a mix of bad choices, dependency on credit cards, and general life stuff that happens now and then without us having an emergency fund to full back on. We have three children and I am on maternity leave right now. Having that cut in income has not helped at all, but we are scraping by (minimally so...still no emergency fund/savings).
We recently sat down to discuss my going back to work. However, after working out the daycare costs and my income, we'd basically be working to stay away from our kids and paying for someone else to raise them. So whilst we need the second income, whats the point of just going back to work to pay the daycare only (and not having any money left over)???
We've batted the idea of me taking another year off or two until the kids are older and taking in another child or two to make up the much needed income. That aside, we really need an extra $1000 to really start making a headway on our debts. BUT HERE'S THE MAIN PROBLEM:
Both of us do not agree on how to manage our debt. I am willing to cut back on our already tight budget and willing to work whatever I have to to get us out of debt slowly but without it affecting our credit rating (as bankruptcy or consumer debt proposal would do). My husband, does not see any light at the end of the tunnel and sees our situation as getting worse as opposed to better and believes we should just declare bankruptcy and start with a clean slate. Bankruptcy, for me, should be our very last option as far as I am concerned. I honestly believe that if we work it right and commit to everything we should be credit card free and not owing my mother anything in 3-4 yrs.
All we are doing right now is arguing back and forth and we are left with not making a decision at all (which is so frustrating). Iam beginning to think that we may as well go bankrupt now if our finances are putting that much strain on our relationship.
I know that finanical issues (in terms of bankruptcy and debt consumer proposal) are different in the US than Canada..but does anyone have some advice on what to avoid. I feel like we really rushed into the home equity loan and weren't properly thinking about it...I don't want to do that again. My husband thinks we should just speak with a counsellor about it and see what they suggest...but I can't help but wonder if they will just push us into something.
I'm incredibly depressed by the situation. If it was just about the credit cards I'd be fine...but I owe student loan's money which I was hoping to put into our mortgage when it comes time for renewal (Spring of 2011)...I can't do that if we have declared bankruptcy. I'm just not sure thats the best route.