Nathan wrote to me through the GetOutOfDebt.org site and asked the following question. 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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“Dear Steve,
I am up to my ears in CC debt. I thought about going through companies like care one, etc. I have two cards with capital one, one with wachovia, one with chase. what do i do. this is on top of student loans and i am spreadin very very thin on money. i tried to reason with the companies and working out a plan and they dont want to. they referred me to national credit consuling. why wont they work with me personally if im wanting to come up with a plan that i can afford?
What do i do? how can i get out of this debt totally $7,800 i dont have a whole lot of money each month. i just get by, student loans are killling me. luckily i am eating. i am trying and trying to find PT job on top of my FT job to make ends meat. no such luck yet
Nathan”
The Answer:
Dear Nathan,
CareOne is a credit counseling group. With any credit counseling or debt management company the monthly payment isn’t a whole lot less than the minimum payment you are paying right now. However, the interest rate can be lower. But if you can’t make the minimum payment, big deal.
My concern is that with you living so close to the financial edge each month, I have a hard time envisioning that to be safe for you. Your priority to repay your debt should be student loans, some money in a savings account each month, and then credit card payments.
If you have not looked into lowering your student loan payment, you should. Check out the IBR, Income Based Repayment program and see if you can lower your student loan payment.
If you can, then consider a debt management program. If you can’t get lower your student loan payment and you can’t save and make your credit card payments each month then I think you should consult with a bankruptcy attorney and talk about what bankruptcy would mean for you.
Bankruptcy would not get rid of the student loan debt but it would get rid of the credit card debt and that might give you the breathing room you need each month to get by, save, and oh yes, eat.
