Finally have to bite the bullet!

[D0WNAND0UT]

We moved into our new $250k home around three years ago, put down $50k and now have around $15-20k in equity. Since then my wife lost her job as a mortgage processor, and she is now sole proprietor of a homemade jewelry business on the internet. I'm a casino dealer on a gambling boat and as you may imagine, my income has gone down the tubes as well. I've been paying bills with credit cards for over a year now, and although we have good credit, mid 700's, it's all about to go down the toilet. This month is the first month that I haven't paid the mortgage on time (approx $1550pm). I will pay everything else on time this month because my future employment in the health field depends on decent credit, and I take a state exam for this new position in ten days time. My present casino income no longer covers my mortgage payment, never mind gas and groceries, and my wife's business hasn't exactly taken off in this present financial climate. Should my wife incorporate her onilne business, and is there one route out of this mess that is any better for us than the rest. My taxable income in 2008 was around $15k. We have two paid off vehicles, my car with 2112k miles on it, and my wife's minivan with 98k miles on it. Due to the high mileage on both vehicles, and while we had good credit, we bought a new minivan around two months ago. Any advice would be most welcome.

[Flamingo]

You are correct that you are going down the tubes or, as I call it, the spiraling black hole that leads to bankruptcy. Once you start robbing Peter to pay Paul, they both eventually become broke and you can't do it anymore or the creditors find out you are doing that by looking at your credit reports or your accounts with them and see what you are doing. They are not stupid - they will know what is going on - and they will skyrocket your rates. If you cannot in a reasonable amount of time replace lost income, your debts will only become larger trying to stay afloat. Believe it or not, since you are robbing Peter to pay Paul, that has already had an effect on your credit and once that first missed mortgage payment hits your records, other creditors may start raising rates.

Due to your prospective employment situation linked to your credit, you are stuck between a rock and a hard place. I suggest looking at what is a priority right now and that is your financial situation cause you will go under in just a matter of time unless you get a windfall to get you out. It would not hurt to get a free consultation with a BK attorney to review your situation.

Best of luck to you...