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I’m An Attorney And Struggling to Pay My Bills. – Pamela

“Dear Steve,

I am a single, no dependents lawyer who always spent where I wanted, when I wanted…and was doing ok with this since I earn $200,000 per year. Four years ago I was hospitalized with a sepsis infection post surgery — I was in ICU on a ventilator for weeks, in the hospital for four weeks and home on IV therapy and a wound vac for an additional four weeks. As I don’t have family or friends in the area, I found it easier to just not deal with things and get back to ‘normal’ quickly — including making the decision (?) to put outstanding balances from the healthcare costs on credit cards. I incurred $450,000 in healthcare bills — of which I was responsible for a total of about $75,000. I know now that it was a bad decision — but it stopped the bills from coming and allowed me to believe that everything was going to be ok. I felt responsible for the bills, and it never occurred to me to ask for any financial assistance until this year…when the APRs increased on the credit cards and I simply cannot keep up with the amounts due.

I own my house, an auto and a piece of property in another state (finally rented out this year). I have no dependents, and so my taxes deductions are extremely limited. My net income is $10,000 per month but my credit/loans/school loans total $8,000….without food and normal living expenses. Another challenge — I travel a lot for my employer, and typically run $10,000 in monthly travel expenses on a corporate American Express card (called ‘corporate’ but on my personal credit). I’ve always kept the reimbursement ‘clean’….I do not want to jeopardize my employment with any untoward use of the reimbursement funds!

I have to do something and finally sought Chapter 13 counseling. But asking for help – even in light of the inability to keep up with it all — is so very hard.

My employer requires the use of a corporate American Express card for business travel expenses incurred, which are then expensed and paid back through my paycheck. Is there any way to isolate this credit card from the Chapter 13 process? In other words, can you have a Chapter 13 only deal with certain credit cards rather than all of them?

Thank you.

Pamela”

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The Answer

Dear Pamela,

First off, I’m so glad you health has bounced back. That sounds like a horrible ordeal you went through.

I’m sorry but I don’t know of anyway to isolated an American Express card from a bankruptcy filing. You should feel free to discuss that issue with your bankruptcy attorney to see if they have some trick I’ve never heard about up their sleeve to deal with a situation like that. You have to report all of your liabilities on your bankruptcy documentation. While you could always attempt to negotiate keeping the card with American Express, you should anticipate they will close the account if you file bankruptcy. It’s been a pattern of theirs in the past.

Are the school loans private or government subsidized? Have you consolidated them previously?

If they are government back consider these student loan resources.

Student Loan Resources

You can use the following student loan resources to help reorganize, discharge or forgive your student loan payments.

The Overall Guide to Dealing With Student Loan Debt

Get Help For Your Student Loan Problem

Discharge Your Student Loans in Bankruptcy

Getting Sued Over a Student Loan

Student Loan Forgiveness and Discharge Information

Watch Out for Student Loan Assistance Programs

Student Loan Consolidation Information

Specific Federal Student Loan Repayment Program Information

Maybe College Isn’t the Answer

It strikes me that if you are able to get by each month, and have already consolidated your student loans, and the issue is cash-flow that a possible approach here would be for you to talk to this credit counseling program to lower your interest rates, and leave the American Express card out of the credit counseling program.

While it is possible that AMEX might sense you are in a credit counseling program from a review of your credit report, talk to the credit counseling group about your situation and their experience with American Express.

If you credit score is above 700 you could think about an unsecured debt consolidation loan for some of your debts. LendingClub.com issues a tremendous amount of unsecured debt consolidation loans so they are in reach.

The combination of consolidating your student loans, lowering your interest rates to make more progress, and possible getting an unsecured debt consolidation loan might be able to reduce your monthly outflow to give you some breathing room.

But help me to better understand your core problem here. Is it one of high interest rates or just flat out not being able to meet the monthly obligations? I’m not clear on that.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

Im An Attorney And Struggling to Pay My Bills.   Pamela
Get Out of Debt Guy – Twitter, G+, Facebook

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Pamela

    Hi Steve, yes, unfortunately, it’s a bit of both — cash flow and increased APRs that have jacked up the payments (double in one situation!). So, I’m gathering information to double check all of my options but likely Ch 13 is the best choice…just want to find the best attorney to help me through that process.  When I’m through this process, I’d like to write an article for you on the psychological impact during the process….I appreciate your articles on this topic and have found that there are very little resources out there to deal with the personal sense of failure that occurs.  Wish me luck!  Pamela

    • http://GetOutOfDebt.org Steve Rhode

      Pamela,

      We are putting together a local bankruptcy directory and if you’d like we’d be happy to locate one for you. See http://getoutofdebt.org/best-chapter-7-and-chapter-13-bankruptcy-attorney-directory/

      I’d love an article that describes the experience.

      I will bet you’ll eventually come to the realization that the struggle and emotional burden this creates really has nothing to do with the bankruptcy itself, but our own individual reactions to change and loss.

      If you have not read it yet, you will probably get a lot out of this article I wrote. How to Get Out of Debt. The Honest and Unvarnished Truth.

      Trust in the process, accept ownership for the situation, learn from any mistakes you made and go forward with pride and compassion for others facing tough times.

      Please keep me posted.

      Steve

  • Cheryl6075

    I’m sorry to hear of your struggle.  I, too, had bills due to a sickness and had to team up with a debt settlement company.  I wish you well.

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