Two incomes are great, especially when there are only two mouths to feed. Even if you rack up some debt, you’ll have plenty of money to keep up with your monthly credit card statements. But what happens when baby makes three?

Pablum and Then Some

We can all agree that babies aren’t cheap, but they get very expensive when one spouse decides to stay home, reducing your family income to just one. All of a sudden carrying monthly debt doesn’t seem like such a good idea. Couples are quickly forced to make tough decisions about how to pay their old monthly bills while dealing with the brand new baby bills. One such couple came into our office facing the same dilemma.

Baby Bliss…Fully Ignorant

When they first arrived in our office, the couple had been struggling with bills since the birth of their first child. They both had careers, but together they decided that the wife would stay home as soon as the baby was born. Because of all the excitement of having a new baby, they didn’t take the time to draw up a simple budget for when baby arrived.

After months of trying to pay monthly minimums on credit card bills while buying baby food, wipes, and diapers, they realized that one income was not going to be enough for them and something had to give.

If Something Stinks, Change It

After their initial consultation with us, the couple soon realized that unless the husband got a raise or the wife began working again, they would soon run out of money. Since the chance of a raise seemed remote and they really wanted one parent to be at home full-time with their new baby, they decided bankruptcy was the right choice for them.

That Fresh Clean Feeling

By filing for chapter 7 bankruptcy, they were able to easily and quickly eliminate all of their credit card debts. This freed up enough cash that they were able to afford the extra cost of the new baby without having to find a way to earn extra income.

The couple quickly began rebuilding their credit, and even qualified for new credit cards soon after filing for bankruptcy. They signed up for two, but this time learned their lesson. They paid off their balances every month, never allowing credit cards to get them in trouble again.