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I’m So Stressed and Deep in Debt I Don’t Know What to Do? – Julie

“Dear Steve,

I had my first child in 1990 and have been an at home mother ever since.

I left my good paying job to raise my now 4 children and would do it all over again.

I have accumulated over $170,000 in credit card debt and need to find a way to pay this off quicker to get some relief from the credit card slump that I’m in.

My plan years ago was to refinance my home to pay off what debt I had at the time my son was going to attend his first year of college.

Well needless to say, the economy took a turn for the worst the same year this was planned, my house lost approximately $200,000 in value and I had to depend on credit cards more after losing a part time job due to the economic downturn and the company losing so much business.

My question is do you have any suggestion as to how I can consolidate an amount this high into one payment to allow less out of pocket each month but with a low enough rate that it doesn’t keep me in debt until I die.

I am so stressed by trying to stay on top of this each month and I think it is affecting my family.

My husband and I make very good money and don’t get to enjoy any of it now because it takes pretty much 99% of our income each month just to stay on top of things.

Due to some extended home and car expenses recently, I have actually fallen 30 days past due on 2 of my higher balance accounts and don’t like how this feels.

Any suggestions to get on top again would be greatly appreciated. If you need more information, please let me know.

Thank you.

Julie”

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The Answer

Dear Julie,

Im So Stressed and Deep in Debt I Dont Know What to Do?   JulieFirst off I’d like to send you and your husband a big virtual hug. I’m sue you are both feeling a tremendous amount of angst, stress and worry with a six digit number of debt facing you.

One time a guy came up to me and grabbed on to me sobbing uncontrollably. I asked him what was wrong and he said he was so buried in debt he didn’t know what to do. When I asked him how much debt he said $3,000. The moral is the amount of debt doesn’t matter. What does matter is how the debt you have impacts your life.

I’m going to assume that you had your first child around 28. That would put you around around 51.

I think the strategy at this point has to revolve around how much you and your husband have already saved for retirement. You are getting older and the most precious commodity we have and can’t waste, is time.

If you have saved an insufficient amount that will grow and be able to care for you in retirement when you can’t earn and need care, then we will need to take a path of intervention to turn this around as soon as possible.

If you do have sufficient money saved that will grow and care for you then I’d suggest a cut to the bones and pay your way out using a structured approach like credit counseling or ReadyForZero.com.

And to answer your question about the loan, I don’t think there is a legitimate lender in their right mind that would touch a loan like that because of your debt to income ratio. Your credit score doesn’t matter in a situation like that. I don’t know of any at that amount.

Here is the big issue. When people reach the moment you are at right now they leap and make an emotional decision about what to do because they want the pain and stress to go away. But rather than really deal with the problem they instead create a greater future problem.

The most important question anyone can ask you at this moment is if you feel you have a greater responsibility to fix the past or fix the future?

One reality is that you are so far buried in debt that no loan is going to get you out. It might be mathematically impossible for you to earn enough, pay enough, and save enough all at the same time.

That doesn’t make you a bad person. It’s just math.

Problem debt is an really just debt wrapped in emotion. If we strip the fear and worry out of this I can help you to see the situation for what it really is.

You and your husband need to sit down together and change your mindset about how to deal with this. You need to start thinking about this like a corporation and less like a consumer.

You need to think about what is best for your family to succeed moving forward. What would American Airlines do if they were in your situation?

Im So Stressed and Deep in Debt I Dont Know What to Do?   JulieYou can get through this, there is another side, and there is a brighter future ahead. Really. There really is.

Unless you take action this will not get better. The key here is taking the action that makes the most sense in order to accomplish the goals you need to, to best care and protect your and your family.

I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth, How Do I Get Out of Debt Quickly? Change Your Mindset, and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.

Then use the free How to Get Out of Debt Calculator to review your options.

Once you’ve identified a company you want to work with, then follow my step-by-step guide on what you should look for and expect from a good debt relief company.

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

Big Hug!

Im So Stressed and Deep in Debt I Dont Know What to Do?   Julie
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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.

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