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04-14-2017 11:17 AM
I'm more thinking that if you can save your credit (especially since you have the income) it will help. Having 1 person keep their credit intact is better than both of you ending up with credit counseling or something along that line on both reports. If you can fix your credit, then you can start working towards lower rates and ways to save money while paying off the debts that are left in her name. The problem is that even with the $10,000, you're going to be in the negative. Paying off high interest rate cards is going to be difficult and very costly. Improving your credit will hopefully open the door to some 0% balance tranfer options or fixed rate personal loans which could potentially save you thousands of dollars.
04-14-2017 11:17 AM
04-14-2017 11:27 AM - edited 04-14-2017 11:29 AM
For what it's worth I applaud you for the respect you show for your wife. my humble opinion is bankruptcy as an absolute last resort. I haven't ever gone through a bankruptcy but I hear its terrible. I also don't see anything wrong with taking out a 401 K loan to give you some breathing room. It will free up the monthly payment amount to start tackling other debts. It's a slow and steady process but I as long as you stay current on your cards as the utilization goes down you'll see your scores respond. So far you're taking a huge hit for Utilization, and probably AAoA, and the 2 late payments. UTIL and AAoA will improve over time as you pay these cards down. and the lates aren't major and won't hurt as much over time as well. My 2 cents is take out teh 401k Loan and pay off the Discover Card, and whatever else you can that will free up as much money on monthly payments. Then attack smaller cards that you can pay big chunks on to pay them off using the money saved from the other monthly payments. Get current on the Credit One cards as well. I agree with the previous poster that said to keep them open for UTIL purposes only, but do not under any circumstances give them to your wife. change the passwords to all of the accounts if you have to. Addiction is a terrible thing, and you cannot enable, but I do appreciate how you're standing by her.
THere is no perfect way and everyone will have an opinion. THis is just mine
04-14-2017 11:36 AM
04-14-2017 11:37 AM
04-14-2017 11:48 AM - edited 04-14-2017 11:55 AM
OP didn't post asking for marriage counseling so let's keep any and all posts on topic and following these guidelines Friendly, Supportive, Respectful
If you can't respond directly to the OP's questions, then don't post. They have come here for credit advice so stay focused on that area.
04-14-2017 12:12 PM - edited 04-14-2017 12:12 PM
I would freeze my and hers credit. I would to get my name off any unauthorized cards asap. I would be looking at either getting a 2nd job myself and/or having her go to work asap. I would payoff any cards i thought I might want again ie Disco so if I did have file bk they would not be included and after bk would let youget new cards however watch timing if you have to bk. Next step cut all living costs to bread and water only. The money I was putting in 401K now goes on debt payment. You have a tough situation and it will take many months of inter strength. I think I read where Chase let a person close cards and pay off over 5 years at 0% maybe some will let you do that
04-14-2017 12:15 PM
Backwoods makes some awesome points... freeze your credit reports so no more new cards can be opened... and you might call those store cards that you don't need and see if you can close them and pay them off over time without interest.
04-14-2017 12:19 PM
I wouldn't take out a 401k loan. It won't make a dent in your debt and if you switch jobs you will owe all the money back immediately or you pay huge tax and penalty. Bankruptcy won't help you with taxes but could wipe out that credit card debt.
04-14-2017 12:27 PM
At this point, I'd very, very seriously consider filing bankruptcy (as well as other actions to help your wife reduce exposure to temptation to feed her addiction - because that's what you're dealing with here, addictive behavior, and going into counseling to deal with it is the fundamental step forward for her - such as freezing your credit reports to make it impossible for her to apply for any more cards). This is a situation where the best thing you can do is wipe out whatever you can through BK and start over again. Don't take out any further loans, and especially do not cut into your retirement if you can possibly avoid it. If taxes are an issue, contact the IRS and your state and/or local tax agency and see what you can do about getting on installment plans to repay whatever's owed; in certain circumstances the government will even temporarily suspend collection actions on back taxes if you can demonstrate severe financial hardship, but you need to communicate with them about the issue.
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