“Dear Steve,

My hours were just downsized at work. I have been staying afloat on all of my credit cards until now. I currently have a bill due that I cannot afford to pay. I have paid my others but this one has about a $6,000 balance with a minimum payment of $175. So as much as I don’t want to, I may have to go without paying it and ruin my credit and so forth. I was just thinking that maybe I could let this one go into collections and then settle for less because even paying the minimum is not making a difference when $135 of the $175 is going to interest charges. The only positive I can see is using any extra money that I may have to pay my other credit cards and then saving up to settle. I was also thinking about debt consolidation or settlement but I’m very skeptical about those services. Any help or insight you can provide will be great thanks!

Wondering what will happen if I stop paying one of my 7 credit cards and if my total credit card debt is about $14,000, should I file for bankruptcy to take care of all the credit card debt.

Bianca”

The Answer:

Dear Bianca,

Based on the fact that you were using your cards to stay afloat and then your hours were downsized, I’m not convinced that simply stop paying one card is going to make a difference.

To dig yourself out of this hole you’d have to not live on the cards at all or increase the balances and pay more than the minimum payment to pay back what you owe.

By letting just one card go it is possible your other creditors may raise your interest rates because of the greater risk you would now pose. The lone default would impact your credit score for the worse.

I would imagine that with your income cut you are probably not able to make the minimum payments so that excludes a credit counseling solution. In a credit counseling program your interest rates are reduced but the payment is about what your minimum payment is and the cards are closed so you can’t live on them anymore.

If you are going to embark on a solution the first step should be for you to talk to a local bankruptcy attorney and see what they have to say. Talking to a bankruptcy attorney does not mean you are going to file bankruptcy, just educate yourself about the option so you can make a better and more informed decision about what is right for you. Talk to the bankruptcy attorney and report back in the comments to let me know what you think.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

@GetOutOfDebtGuy

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.

Other Related Articles to Read

• I’ve Been Out of Work For a Year and I’m Running Out of Cash. – Linda
• I Lived on Credit Cards in College and Have Not Paid Them. – Amy
• I’ve Been Living Off My Credit Cards for a While. – Tai

Read the full article at GetOutOfDebt.org, click here: Should I Stop Paying One of My Credit Cards? – Bianca

Linda

“Dear Steve,

I have been out of work for almost a year. All of my credit cards have been used to live on, and all my cash used to pay them. I am now coming to the end of the cash, and still no job offers. I never dreamed it would come to this, because i was always able to get a job.

ALL of my bills are current, as of now. But if i continue to pay the cards and use what little cash i have left to pay them, I can still use them. Doom is right around the corner.Bankrupsy also costs money.

What would you suggest i do?,is there any help out there for a situation like this? Thank you, unemployed in nj.

Linda”

The Answer:

Dear Linda,

The growing darkness you see is the big shoe poising to fall on you. Your situation is dire and needs attention fast.

This is not a new situation, it has been brewing ever since you lost your job and especially since you first started to use the credit cards to make ends meet. Ever since that point you have been on a downhill slide.

The best time to take action and intervene in a situation is as early as possible. The longer you wait to take action, often the more severe and jolting the solutions are.

You are going to have to face the reality that your cards are going to be closed on you very soon and come up with a plan on how you are going to get by without access to them.

I think we should just assume that you will wind up in collections on those cards since you won’t have enough cash to pay them any more. Collections won’t be a surprise and the secret to dealing with collection calls and inquiries is just to be as pleasant as you possibly can, don’t get sucked into the negative energy, and never promise a payment you can’t make or can’t afford.

While the primary attention is on the debt right now, it is not where we need to be focused. No, we need to be looking at finding a job, any job. I think you should read “You May be Down and Unemployed But You Are Still a Hero to Me” and “Don’t be a Victim of This and a Victim of That. Get Over It.”

Now, before you label me as callous or lacking compassion, let me just tell you the most honest and loving thing that you need to hear. You need to get up, right now, today and start applying all your efforts to getting a job, any job. You need to start making money. If you don’t and you sit idle, you will be hungry and homeless.

I don’t want to hear that there are no jobs out there for you. I want you to work at any job, food service, retail, call center, or any of a number of jobs you never would have considered before.

Linda, you need to make a job of getting a job. Cash is going to be king the minute those credit cards are closed. You’ve been using borrowed money to make ends meet, with the cards closed you’ll need income to get those same ends to get close to meeting.

Your debt can be addressed once you start making money and the most likely solution is probably going to be bankruptcy. But honestly, we’ll deal with the debt latter.

I desperately want to hear that you landed a job, any job. Be it at a temp company, or something else. Please break all the rules, use all your time and all your efforts to locate any source of income.

Just keep this in mind, life entitles us to nothing. We aren’t guaranteed the perfect job, a job in our field, fairness, equality, compassion, nothing. You are not even guaranteed your next breath. Life is going to be what you create and build from the moment you read this forward. And this is the time that I need you to rise Linda. I need you to put all the reasons away about why this or that job is not right or not good for you. I need you to find work, even if it means asking if someone wants fries with that soda.

The other advantage of work, beside trying to keep yourself feed and sheltered, is that activity breads opportunity. The more you move and work, the more attractive chances you will have.

Keep me posted on your actions and activities as you move forward from this day. I care and I want to know. Send me updates on Twitter @GetOutOfDebtGuy. This message might have been a bit of tough love, but it is simply because I care about you and need for you to alter your path, right now.

Big Hug!

@GetOutOfDebtGuy

Other Related Articles to Read

• “I Have Three Degrees But I’m Broke And Miserable”
• I Just Got Fired From My Job. What Should I Do? – Marie
• My Husband is Going to Be Laid Off This Friday. – Lori
• America’s Job Bank – Find a Job Now
• Chapter 7 – The Attributes of Internal Prosperity in Action
• Lost Job, Reduced Income, Medical Bills and We’ve Depleted Our Savings. – Shelly
• Out of Money and In Debt: Tips, Tricks and Traps
• We Can’t Keep Up Our Credit and Medical Payments. I’m a Stay at Home Mom Who Works Part Time. – Martha
• What It’s Like to Be Unemployed – Video
• Out of Work, Out of Savings and Credit Cards Maxed Out. – Bob

Read the full article at GetOutOfDebt.org, click here: I’ve Been Out of Work For a Year and I’m Running Out of Cash. – Linda

Amy

“Dear Steve,

I just graduated from college and during that time was living on credit cards. I have not paid my card in 4 years. I am barely scraping by as it is and cannot add a $500 payment to my already increasing bills.

What is my best option for getting out of debt?

Amy”

The Answer:

Dear Amy,

Based on your monthly payment I would estimate that you owe about $25,000 on your cards. You used your cards to live on and then did not pay them? Amy, that’s not fair at all.

Unfortunately the situation now is what it is and you are now in the grips of the college graduate squeeze. That is the time after you graduate when you get your first job, apartment, car, and even more day-to-day expenses.

If you had student loans those payments will kick in soon so with all of that, unless you can get a second job or a higher paying job, I’m afraid that the only solution to address your situation is going to be bankruptcy.

Why bankruptcy? Well outside your ability to increase your income to generate additional money to repay on your debt then there is no reasonable expectation that this situation is going to be resolved on your current path.

If you are able to increase your income then contacting a debt management group (click here for debt management information) would be something to investigate.

Big Hug!

@GetOutOfDebtGuy

Other Related Articles to Read

• I’m a College Student and Gotten Myself in Very Bad Credit Card Debt. – Meredith
• My Husband Was Ill So He Went to College. – Rhonda
• I’m a Recent College Graduate Trying to Dig Myself Out of Credit Card Debt. – Megan
• Should I Stop Paying One of My Credit Cards? – Bianca
• I’ve Been Out of Work For a Year and I’m Running Out of Cash. – Linda
• I am a College Student With Credit Card Debt. – Alicia
• I Can’t Repay My Student Loans I Had When My Husband Was in the Military. – Debbie
• My Twenty Year Old Daughter is in a Terrible Financial Situation. – Sam’s Mom
• I’m $850 in Debt, in College, and Don’t Want to Tell My Parents. – Jessica
• I Went to College for a Bit and Now They Want Me to Pay. – Noname

Read the full article at GetOutOfDebt.org, click here: I Lived on Credit Cards in College and Have Not Paid Them. – Amy