“Dear Steve,

I am only 22 years old and i already have debt that I can’t handle. It’s not in the hundred thousands but I want to stop it before it gets to that point. I have a little less than $5,000 in debt and I have no job. I don’t even own a car or house that i could use as collateral for a loan. The only income that i receive is cash benefits from DCF every month. And that is only $300 that is supposed to last myself as well as my two kids. YEAH RIGHT! But I don’t want to be stuck with debt that will pill up. I had a bank account that was charged out because it was in the negative thanks to a fake check that I had recieved. That was for $850. the rest is from a school loan that i never intended to take out. I withdrew myself from school but it wasn’t before they charged me with a portion of the loan, about $3500.

Is there any way that i could possible consolidate all this debt into a few payments spread out over a few years? I don’t want to be dramatic and try to file bankruptcy because it’s not at that point i don’t think, but then again, I’m no expert. Would it be possible for me to get a loan to pay the debt entirely and the just pay small payments over time? I have even considered trying to get a cedit card but i have no idea what my credit looks like or what my score is. Please help point me in the right direction.

Jerrica”

The Answer:

Dear Jerrica,

The underlying issue here is the lack of income. It just isn’t possible to qualify for a real loan without sufficient income and good credit. There will be lots of people that will try to tell you they can get a loan but they will charge you a fee for the imaginary loan and vanish with your money.

Is the student loan from a private student loan or a government student loan? That’s an important item to know.

But based on your current income and situation one possibility is to do nothing and stop making payments you can’t afford. Your creditors will sue you and you will lose but they will not be able to garnish your benefit income.

Then, once you get a job and begin to earn income we can revisit the lingering debt and come up with a plan to deal with it then.

But right now I’d suggest you visit the government site Benefits.gov and find out what additional benefit program you are eligible for.

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

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

• My Husband is in Prison and I Need Financial Help. – Georgia
• We Can Only Afford to Eat Once a Day. How Can We Get By? – Brenda
• Do You Know of Any Super Rich People That Would Bail Me Out of Debt? – Mark
• Former Accountant, Single Mom, and Tapped Out. – Cathy
• I Have No Income and My Disabled Sister is Living in My House. – Steven
• James in the UK is Feeling Horrible About His Situation.
• I Have No Job. Should We Consolidate Our Debt or Go Bankrupt? – David
• I Had a Baby, Lost My Job, and Can’t Pay My Credit Cards. – Amanda
• I Am Completely Broke and Need to Make Money Now. – Jackie
• Thu Wrote Me And Said “I’m Really Struggling, My Husband is Disabled, How Can I Get Out Of Debt?”

Read the full article at GetOutOfDebt.org, click here: I’m 22 And Already Deep in Debt. What Should I Do? – Jerrica

“Dear Steve,

Have been an accountant for 40 years. A single mom of two boys who had mental health issues which translated to criminal issues and all the expenses meant I saved nothing. I used credit cards to start and keep a business afloat. It folded a couple of years ago. I took a new job which promised many perks and a nice way to work into my late 70′s but they waited until I bought a HUD home (with the 8K Obama bonus) to “go in a different direction” and laid me off. I have been unemployed for 18 months now and because of my age (61) and the distance to a major city I have had only two interviews. During this time I pared down my outgo to food, electricity, water,mortgage,car insurance (required) house insurance,cell phone, and two car payments. (one I am upside down on and owe about $3800 on the other. I told several CC providers I would pay when I could and closed most accounts. They called me for months and months but I had sold everything I could find, cleared out my 401K, my life insurance and a small scottrade account. I have written a book that was just turned down by a publisher and my on-line efforts have yielded nothing so far.

I was sued today by Capital One. They want $5500 plus all fees, etc. I have really been trying to avoid filing bankruptcy but this puts the squeeze on me. I have 30 days to court appearance. Since I owe about $40K total to credit cards at this point, own nothing, have no equity in my home (upside down by 30K there) and have no job and will run out of unemployment in about two months. I now owe all of my October “must pay” expenses and have about $800 to my name.

Any suggestions other than doing a “Thelma and Louise”? My family and friends are tapped out.

Thanks for listening.

Cathy”

The Answer:

Dear Cathy,

It is said that the role of a consultant is the person that gets paid to tell you what time it is by borrowing your own watch. Meaning, the answer is often right in front of you. You may see it but not want to see it, if you know what I mean. As an accountant you may not want to see the clarity that measuring your dollars and cents provides.

In this case the answer is dead obvious and I wish you had come to me before you had raided your retirement accounts. It is of little comfort now but we could have protected those.

Borrowing from friends and family is a dead end route as well. The problem hinges not on your current obligations, but on your future income. Without any replacement income, making payments is akin to throwing money away.

All that I’ve said above is bad news and is geared more for other readers to learn those lessons, you’ve already painfully learned them probably.

Now I need to get you focused on the real issue here, the income. Money problems are never about the money. They are the symptom of underlying issues and the debt is the byproduct of those issues. In your case the loss of the income is what we need to focus on at the moment. That’s the real issue, not Capital One.

You have a few choices when it come to the income issue.

1. You could move to where jobs are.
2. You could take any job, even a much lower paying one.
3. You could apply at every temp agency around and take every assignment they can give you.

Along with the income issue that we need to change there is another issue which we can’t change and that’s your age. I mention it because your income earning years are diminishing and from this very moment forward I need for you to think about saving for retirement. Your physical life will outlive your income life and we absolutely must get you focused on saving for that event which is coming no matter how much we wish otherwise.

My opinion, based on what you’ve shared, is that you need to focus all your efforts on replacing income and you could actually stop paying your credit cards, one of the car payments and mortgage payment. This will help what’s left a little bit longer. You also don’t need to worry a whole lot about being sued by Capital One or the other cards. You have no money to pay so you instantly lose anyway.

Once you can get income coming back in again then we can clean up the whole mess with bankruptcy. Bankruptcy will kill the judgments, the car repossession and mortgage default. You might actually lose the home but you are upside down on it now and can’t afford it. They won’t take your house for six months to years so you’ll get to stay there rent free. I know people that have remained in their homes for years now and have not made a mortgage payment.

Now is the time to focus on survival and if a friend or family member can help, ask them for help to pay the electric bill, not the mortgage. You also sound like you qualify for government benefits so if you have not done so already apply for food stamps (now called SNAP), medicaid, and visit your local food pantry.

Swallowing your pride is just flat out tastier than being homeless and hungry.

You can click here to find a local bankruptcy attorney and if you’d like a second opinion about your situation or a personal consultation by another debt coach, please feel free to contact Damon Day.

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 Lost My Job Two Months Ago and Have $19,000 in Credit Card Debt. – Steve
• My Husband is Going to Be Laid Off This Friday. – Lori
• I’m 22 And Already Deep in Debt. What Should I Do? – Jerrica
• 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
• I Have No Income and My Disabled Sister is Living in My House. – Steven
• James in the UK is Feeling Horrible About His Situation.
• I’ve Been Out of Work For a Year and I’m Running Out of Cash. – Linda
• Credit Consultant Said They Would Charge Us Up to 25% of The Debt. – David

Read the full article at GetOutOfDebt.org, click here: Former Accountant, Single Mom, and Tapped Out. – Cathy

“Dear Steve,

I’ve been unemployed since September 12, 2008, the day of Hurricane Ike. I’m about to recieve my final Emergency Unemployment beneft within 2 weeks. I have absolutely no other income, nor job prospects.

I have a home which is rented out to my sister whom is disablef and unable to ever work. Those payments are current, but I have $15,000 dollars in credit card debt and over $3,000 in medical expenses.

My vehicle is current but will not be able to make my July’s payment or insurance and thereafter. The remainder balance is just over $15k. Umeployment was barely keeping me afloat for the time, but have no ideal what to do.

I cannot get my meds nor qualify for assistance, since I made over the required limit back in 2007. I don’t understand why most agencies want to know what I made 2 years ago to make a decision.

I have no savings, and only $12.52 in my checking acount.

Can I file Chapter 7 and do I need to include my home, which is rented out to my sister. I”m not making any money on it and I did it out of the kindness of my heart so she would have a place for her and the kids.

I feel so ashamed, and mad at the same time. It’s unfair that CEO’s are protecting their pockets and I get the shaft.

Please advise,

Steven”

The Answer:

Dear Steven,

Fairness, you’re looking for fairness in an economic downturn. You will be grossly disappointed if fairness is the yardstick.

As far as specific Texas laws or regulations, you’ll have to speak to a Texas bankruptcy lawyer. Make some local calls and find a local bankruptcy attorney to go and meet with. Most offer a free bankruptcy consultation appointment so it won’t cost you anything.

It is unfortunate that you are down to the last check and just now searching for a solution. When you are up against a wall like you really have few, if any, good choices.

I certainly understand your desire to keep the house for your sister but it is your asset she is living in and that creates a problem. I can’t imagine that the law looks at her presence as anything more than a tenant. But maybe you an the Texas bankruptcy attorney can come up with something clever.

Big Hug!

@GetOutOfDebtGuy

Other Related Articles to Read

• My Husband is Going to Be Laid Off This Friday. – Lori
• I Was Injured and Can’t Work. – Bill
• I’m a Retired Disabled Veteran And Student Loan Collectors Are Coming After Me. – Francis
• I’m So Embarrassed About My Financial Situation. – Frances
• Financial Hardship Installment Loan. – Tracy
• Are Their Free Grants I Can Use to Go Back to School? – Gayle
• Is Bank Of America Taking Advantage Of The Unemployed With Debit Card Fees?
• I’m a Disabled Air Force Veteran and Can’t Afford My Car. – Deborah
• Economic Birth Control : Steady Decline In Births Since Start Of Recession
• Federal Government Job Scam Halted

Read the full article at GetOutOfDebt.org, click here: I Have No Income and My Disabled Sister is Living in My House. – Steven

“Dear Steve,

I’m a student going into my second year and have got myself into a lot of debt.

I owe
£350 to a payday loan company (who are threatening me with bailifs)
£244 phone bill (contract monthly £35)
£240 for my first months rent on house
I have no income whatsoever till I get my student loan in septemeber or october.
I have a £1250 overdraft (interest free) which is maxxed out and have nearly maxed out my £500 credit card.

I need to get the rent by the 21st of next month otherwise i wont be able to go back to university and will be alot worse of then I am now.

What can I do to get myself out of this mess? I feel very suicidal and getting to breaking point.

James”

The Answer:

Dear James,

The answer might be obvious but you can’t see it. James, you can’t afford to go to school. You might just have to drop out and go get a job to repay your debts. Once you get that under control you can go back to school.

The stress and pressure is making you desperate and feeling suicidal but if you take action to address the underlying problem, no income, you will begin to feel better quickly.

This is the same situation millions of people around the world find themselves in every single year. It is unfortunate, but not insurmountable.

Big Hug!

@GetOutOfDebtGuy

Other Related Articles to Read

• Is Bankruptcy the Best Option for Us in the UK? – Hayley
• I Have Been Sent A Statutory Demand in the UK What Happens Next?
• Will I Be Arrested for a Debt in the UK if I Return to the UK?
• Can I Go Bankrupt After Being In An IVA in the UK?
• Will Past Due UK Phone Bills Prevent Me From Becoming a Lawyer
• Will I Get Arrested in the UK Because of a Past Due NatWest Debt? – Marina
• My mum recently added my name to her account in the UK, does this make her liable for my debts? – Ella
• Will the UK Bank Chase Me Back to My Country When I Can’t Pay?
• I’m Studying in London But Owe 10K GBP And May Have to Leave the Country. – Danny
• I Studied at South Bank University in London And Got a Credit Card. – Nor

Read the full article at GetOutOfDebt.org, click here: James in the UK is Feeling Horrible About His Situation.

“Dear Steve,

I lost my job a little over two years ago and have not been able to find more than sporadic freelance work since. My wife is the sole income as of now. The problem was like a perfect storm, in that COBRA ate through our savings, and we racked up between $30,000 to $40,000 in debt (a good chunk of which was medical).

With no immediate job prospects in my future, how do we tackle our debt? Should we consolidate, go for bankruptcy? We can’t go on like this for much longer.

Thank you for your advice!

David”

The Answer:

Dear David,

Unless you have a crystal ball it would be best to make a decision based on what we know for a fact or for damn near certain.

What we know is that you have spent through your savings and used credit to overcome some obstacles. We also know that you do not have a reasonable expectation of making sufficient money to satisfy your debt.

You are left with two logical options.

1. Do Nothing – Stop paying your bills, wind up in collections and as long as the debts are in your name alone the most a creditor will probably do is sue you and attempt to garnish your wages. However, since you are doing freelance work it’s a moving target for them. Once you get back on your feet you can file bankruptcy and kill the suits and garnishments.
2. File Bankruptcy – Filing bankruptcy will close the door on the old debt but what’s the plan moving forward? Unless you resolve the underlying income problem you will still not be able to make ends meet and run up more debt you can’t pay. I think you should click here to find a local bankruptcy attorney and go talk to them for free to learn what bankruptcy would mean for you.

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 Had a Baby, Lost My Job, and Can’t Pay My Credit Cards. – Amanda
• I Have No Job, No House, No Car and No Way of Paying Back My Debt. – Diana
• I Lost My Job Two Months Ago and Have $19,000 in Credit Card Debt. – Steve
• My 19 Year Old Daughter Owes $5,000 on a TD Bank Credit Card. Does She Have to Pay?- Marion
• I Don’t Have a Job to Pay My Debts. What Should I Do? – Reanna
• I’m Unemployed, No Job, Can’t Afford to Pay My Credit Cards, and I Need a Job. – Kim
• Lost Job, Reduced Income, Medical Bills and We’ve Depleted Our Savings. – Shelly
• I’m 22 And Already Deep in Debt. What Should I Do? – Jerrica
• Former Accountant, Single Mom, and Tapped Out. – Cathy
• I Have No Income and My Disabled Sister is Living in My House. – Steven

Read the full article at GetOutOfDebt.org, click here: I Have No Job. Should We Consolidate Our Debt or Go Bankrupt? – David

“Dear Steve,

In October 2008 I lost my job. I have 2 credit cards through Capital One and could not afford to make any type of payments on them bacause I had to pay for food and housing and a baby. I am single so no support from a spouse either to at least pay a little towards card.

I have received my phone calls and I have informed them I was unable to make any type of payment as I do not have any type of income. I have now receieved a letter from a Lawyers office and they are telling me I must pay account in full which both together is only 3,000 dollars which isn’t near as much as some peoples debt I canunderstand. I however have no way to pay at all.

They informed me if I do not pay that legal action will be taken and I will be sued.

I called the office and told them what are my options that I have no income at this time and the man I spoke with told me it didn’t matter if I did not pay, Capital One will sue me for the monies owed and that was it.

What can I do? I own nothing, no home, car, no pensions, 401k, I have nothing to my name at all.
What can I do should I just file bankruptcy and be ruined which my credit already is, so what is the difference, I know there is money to pay for bankruptcy also, do you have any suggestions.
I am actively searching for a job , currently my parents have been helping me, but they are barely helping thierselves so I can’t ask them to pay my bad debt and they are my only famly.

Thank you,

Amanda”

The Answer:

Dear Amanda,

There is a huge difference between owing a debt and logic.

Logically you have no way to pay this debt at this time. But Capital One had dumped you in their massive collection hopper of people that owe them money. They are not going to treat you as an individual, but grind you along with everyone else in the hopper.

For them, that process will involve suing you. While you don’t have anything now, they are betting that you will in the future so they are going to stake their claim in you now for a future payoff.

No matter why or how you got in this situation, the facts now are that you are barely making it, you are actively looking for a job and you have no family financial support network. It is what it is.

At this point the only way to legally end this debt and claim against you would be to file bankruptcy. It is not a judgment about if it is right or wrong, but like the debt, it just is what it is. Going bankrupt and ending this debt might just be the most responsible thing you can do right now.

I would suggest that you contact a local bankruptcy attorney and call to schedule a free bankruptcy consultation appointment to go in and discuss the situation.

Big Hug!

@GetOutOfDebtGuy

Other Related Articles to Read

• I’m in College and Getting Sued by CapitalOne. What Do I Do? – John
• Thanks for This Website! – Rocio
• I Have No Job. Should We Consolidate Our Debt or Go Bankrupt? – David
• I’m a Low Income Single Mother With a Disabled Son and Collectors are Chasing Me. – Milla
• I Was Scammed By a Debt Consolidation Company in New York. – Maria
• Capital One is Suing Me and I’m Really Depressed. – Genie
• I’ve Made an Appointment With a Credit Counselor But What Should I Do? – Mary
• I’m Doing Debt Settlement and Getting Sued by Chase Bank. – Darlene
• Capital One is Calling Me Every Day Even Though I Am Disabled. – Debra
• Capital One Sued Me And Got a Judgment After the Case Was Dismissed. – Linda

Read the full article at GetOutOfDebt.org, click here: I Had a Baby, Lost My Job, and Can’t Pay My Credit Cards. – Amanda

Jackie

“Dear Steve,

Lost Job. Car not working I am completly broke, Cant get anyone to wortk on car so I can apply for jobs. If I do get a job it will be 3 weeks before I can get a pay check.

Do You know of anything I can do? Waitressing will provide a lil instant Money, But Places are to far to walk to apply but I did aapply today down the block but it will be 2 weeks befor I could start.

Jackie”

The Answer:

Dear Jackie,

There are lots of things you can do to make some money. All of them require the application of manual labor but can result in immediate income. And if you have a ladder or a bucket you can start right now. These ideas are in no particular order.

• Go door to door and offer to wash windows.
• If you have a lawnmower, canvas the neighborhood and offer to mow lawns.
• Got a bucket, see if people in your area would like for you to wash their car or truck.
• Do laundry and fold it for people. You can take it to the laundromat and do it at once there.
• Look around for neighbors that might like for you to walk their dogs.
• Collect aluminum cans and turn them in for cash.
• Scoop poop for people in your area with dogs.
• Go apply for SNAP/Food Stamps.
• See if anybody in the area would like for you to clean their house for them?

Big Hug!

@GetOutOfDebtGuy

P.S. If you have an idea of something Jackie can do, leave her your idea in the comments.

Other Related Articles to Read

• 10 Ways to Sell Your Used Stuff to Raise Money
• I’m 22 And Already Deep in Debt. What Should I Do? – Jerrica
• Former Accountant, Single Mom, and Tapped Out. – Cathy
• I Have No Income and My Disabled Sister is Living in My House. – Steven
• James in the UK is Feeling Horrible About His Situation.
• I Have No Job. Should We Consolidate Our Debt or Go Bankrupt? – David
• I Had a Baby, Lost My Job, and Can’t Pay My Credit Cards. – Amanda
• I Have No Job, No House, No Car and No Way of Paying Back My Debt. – Diana
• I’m in College and Getting Sued by CapitalOne. What Do I Do? – John
• Can I Go Bankrupt Even Though I Used the Credit Cards to Get By? – Lee

Read the full article at GetOutOfDebt.org, click here: I Am Completely Broke and Need to Make Money Now. – Jackie

“Dear Steve,

Hi. I have about 9-10 credit cards and about $25,000-$30,000 in debt. I have no job, no house, no car and no way of paying it off. I can’t predict when I will be able to find a job. I just recently been late on my payments. I really don’t know what to do.

Would bankruptcy be the best option for me? What happens when I file for bankruptcy? What are the procedures? Please get back to me. Thank you!

Diana”

The Answer:

Dear Diana,

Yes, bankruptcy is a legal tool to allow you to put an end to a financial situation which has no reasonable expectation of being able to resolve itself.

The process works like this.

1. You find a local bankruptcy attorney you want to work with.
2. Once you pay the attorney to represent you the process starts.
3. You’ll fill out a bunch of information pages and/or give the bankruptcy office copies of your bills.
4. Your case is filed with the court and your creditors are notified.
5. No further collection activity is permitted.
6. A meeting with the bankruptcy trustee will be scheduled.
7. In a Chapter 7 bankruptcy you will receive a notice that your debt has been erased.

It is not a complicated process but in a time of stress and depression it is just a pain in the ass. The ease of the bankruptcy really hinges with the office you pick to do your bankruptcy with. Good communication with the office and confidence in the attorney will go a long way to making this a less painful process.

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

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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 Have No Job. Should We Consolidate Our Debt or Go Bankrupt? – David
• I Lost My Job Two Months Ago and Have $19,000 in Credit Card Debt. – Steve
• My 19 Year Old Daughter Owes $5,000 on a TD Bank Credit Card. Does She Have to Pay?- Marion
• I Don’t Have a Job to Pay My Debts. What Should I Do? – Reanna
• I’m Unemployed, No Job, Can’t Afford to Pay My Credit Cards, and I Need a Job. – Kim
• I’m 22 And Already Deep in Debt. What Should I Do? – Jerrica
• Former Accountant, Single Mom, and Tapped Out. – Cathy
• I Have No Income and My Disabled Sister is Living in My House. – Steven
• James in the UK is Feeling Horrible About His Situation.
• I Had a Baby, Lost My Job, and Can’t Pay My Credit Cards. – Amanda

Read the full article at GetOutOfDebt.org, click here: I Have No Job, No House, No Car and No Way of Paying Back My Debt. – Diana

“Dear Steve,

Full time college student with debt from credit cards and past balance for a college in California.

I’m a 21 year old college student (about a year left of school) My student loans are all deferred until I graduate, but I have two credit cards and a balance from a college I used to attend in California. The total that I owe is about $3500 and all three of the creditors have collection agencies and attorneys harrassing me. I was served by capitolone and told that they are filing a judgement against me.

I attend the Culinary Inst. of America full time, so I am unable to work enough to pay these debts. I pretty much just make enough money to live on and my mom pays most of the misc. college expenses to help me. I would like to try and settle these debts but don’t know where to start. Might you be able to offer advice?

John”

The Answer:

Dear John,

Where do you start; with income. Until you get out of school it does not sound like you can make much, if any, money to begin to resolve these debts.

I’d just wait till you graduate, get a job, and start earning some money before you do anything. Otherwise, what’s the conversation going to be?

“Hi Capital One, it’s me John. I just wanted to call you and tell you I don’t have any money.”

Save the time and bake me a batch of snickerdoodles.

If they are going to sue you, they win. Like I said, it can all be dealt with latter.

Big Hug!

@GetOutOfDebtGuy

Other Related Articles to Read

• Capital One is Suing Me and I Have 30 Days to Respond. – Sue
• I Had a Baby, Lost My Job, and Can’t Pay My Credit Cards. – Amanda
• Capital One is Suing Me and I’m Really Depressed. – Genie
• I’m Doing Debt Settlement and Getting Sued by Chase Bank. – Darlene
• Credit Card Debt Lawsuit – Consequences of Settlement Done Wrong
• My Apartment Complex is Suing Me for Money I Do Not Owe. What Should I Do? – Michael
• I Got Sued by Capital One. What Do I Do Now? – Leslie
• I Want Out of Debt Without a Chance of Being Sued. – Mary
• Thanks for This Website! – Rocio
• I’m Being Sued By Capital One. Should I Go Bankrupt? – Laura

Read the full article at GetOutOfDebt.org, click here: I’m in College and Getting Sued by CapitalOne. What Do I Do? – John

“Dear Steve,

Since last March, I have charged $30,000.00 in Credit Card purchases. The bulk of this was March thru May 2008. In May My hours were reduced (At that point I was using my credit card for survival. I.E. Groceries, Gas, Utilities, Car Repairs and needs).

In August I was laid off and still am. In Mid December I stopped using my credit cards all together. Right now I am considering Bankruptcy with $52,000.00 in Credit Card debt. For the last year I have strung Nine cards along with minimum payments while using the cards as described above.

My wife also took 5 new cards in her name in April 2008 and they combined have a balance of $16,000.00. (This is part of the $30,000.00 in charges). My Wife as of this month is unemployed from a job she had for a year and a half. My unemployment will run out in April 2009 ($320.00 per week).

Based on my story above, would I run into problems filing a Chapter Seven BK in March 2009? All my debts are Credit Card and my Assets are minimal with a home that had lost all of its equity due to the housing market.

Lee”

The Answer:

Dear Lee,

I am not an attorney so I can’t give you legal advice. But I can share my experiences about this issue with you. I would strongly advise you to speak to a bankruptcy attorney and you can get a free bankruptcy consultation if you click on that link.

Your situation is one I see a lot. In a perfect world people would not use their cards to pay for things they could not afford. And I think it could be easily argued that using credit to buy things you know you can’t afford is a problem.

The reality is that unless the cards have been really abused in lavish purchases or vacations prior to bankruptcy it seems to almost never create a problem. People that have intentionally run the cards up with the intention of filing bankruptcy to discharge the debt, seem to get caught.

The typical credit card bankruptcy fraud case looks like this:

Credit Card Bustouts: Individuals contemplating bankruptcy run up large consumer credit card debt and then file bankruptcy. The purchases and cash advances occur within a short period of time. Frequently, the same individual files bankruptcy several times, using false social security numbers and aliases. Or the fraudulent perpetrator assumes another person’s name or social security number. False statements are usually made on credit applications, and the assets acquired from the fraud are concealed when the bankruptcy is filed.

Here are some 2008 examples of bankruptcy fraud cases. See how many appear similar to your situation.

Lou Pearlman Sentenced to 25 Years in Prison

On May 21, 2008, in Orlando, Fla., Lou Pearlman was sentenced to 25 years in prison, to be followed by three years of supervised release, and ordered to pay a $400 assessment. In addition, a restitution hearing will be held on July 16, 2008. Pearlman was also required to forfeit to the United States assets and property, including a $200 million money judgment, a $25,000 bank check, several high-end vehicles, and any assets to be discovered in the future to satisfy the $200 million money judgment. Pearlman pleaded guilty to charges of conspiracy to commit an offense against the United States, money laundering, and presenting or using a false claim in a bankruptcy proceeding on March 4, 2008. According to his plea agreement, for more than 20 years, Pearlman was successful in raising millions of dollars based on false representations about two companies affiliated with him – Transcontinental Airlines Travel Services, Inc. and Transcontinental Airlines, Inc. Pearlman represented to thousands of investors and several federally insured financial institutions that those two companies were successful companies in the airline business and that Pearlman’s ownership interest in those companies was worth millions of dollars. To the contrary, Transcontinental Airlines Travel Services, Inc. and Transcontinental Airlines, Inc. existed only on paper. Those companies had minimal employees, business operations, and revenue. This case involves three conspiracies and schemes perpetrated by Pearlman and others: (1) a “Ponzi” scheme based on fraudulent investments offered in connection with Transcontinental Airlines Travel Services, Inc. and Transcontinental Airlines, Inc., (2) a bank fraud scheme involving misrepresentations about the financial condition of Pearlman and his companies, and (3) a bankruptcy fraud scheme. The amount of loss for these three schemes is currently estimated at over $300 million.

Financial Planner Sentenced for Tax Evasion and False Statements on a Bankruptcy Petition

On April 11, 2008, in Columbia, S.C., Charles E. Atwell, a financial planner, was sentenced to 51 months in prison, to be followed by three years of supervised release, and ordered to pay a $50,000 fine. He was also ordered to cooperate with the Internal Revenue Service in the assessment, filing, and paying of back taxes. Atwell was convicted by at a jury trial in February 2008 on four counts of tax evasion and one count of making false statements in a bankruptcy petition. Evidence presented at trial revealed that during the years 2000 through 2003, Atwell made more than $2 million in commissions for selling financial products such as insurance policies, annuities, and mutual funds. The evidence also revealed that Atwell did not file tax returns or pay any income taxes during any of the years in question. In fact, Atwell had not filed personal tax returns since 1995; however, he had used bogus tax returns to attach to loan applications and other financial dealings. To help hide his income, Atwell used the bank accounts of several entities that he controlled, such as Professional Planning Inc. of Greenville, T and E Associates, and the Atwell Family Trust. In March 2003, Atwell signed and filed a bankruptcy petition claiming that his income in 2001 was only approximately $17,000, when in fact, it was approximately $800,000. The petition also alleged that Atwell’s 2002 income was approximately $41,000, when in fact it was approximately $400,000.

Virginia Man Sentenced to 46 Months in Prison on Tax Evasion and Bankruptcy Fraud Charges

On April 7, 2008 in Norfolk, Va., Charles Eugene Lancaster, of Virginia Beach, Va., was sentenced to 46 months of in prison and ordered to pay $444,435 in restitution. Lancaster pleaded guilty on November 29, 2006, to bankruptcy fraud and tax evasion. According to court records, Lancaster was the general manager of Auto Sport and Imperial Motors, two used car dealerships located in Virginia Beach. In 1998 and again in 1999, Lancaster formed two shell corporations, naming his ex-spouse as the owner of the first corporation and his girlfriend the owner of the second. Thereafter, Lancaster received all of his income owing to him as the general manager from the two dealerships through these two new corporate entities. By employing this scheme, Lancaster was able to disguise his earnings from the IRS because the income earned by the corporations was not subject to a 1099 or W-2 filing requirement. At the end of each year, Lancaster issued himself W-2 forms which vastly under-reported his true income. After 1999, neither of Lancaster’s two corporations filed any tax returns. Lancaster filed personal tax returns for tax years 1999 through 2002 which reflected only his W-2 earnings rather than his true income. In 2003 and 2004, however, Lancaster did not file any tax returns, personal or corporate. During this time period of 1999-2004, Lancaster evaded paying $337,407 in federal taxes. In addition, Lancaster filed for personal bankruptcy in July 2001. As a result of his fraudulent bankruptcy filings, Lancaster was able to discharge $107,028 in back taxes owed to the Internal Revenue Service.

Ex-Restaurant Owner Sentenced to Prison for Tax & Bankruptcy Fraud

On February 15, 2008 in San Diego, Calif., Karl James, the former owner and operator of more than 50 Taco Bell franchises in southern California and Arizona, was sentenced to serve 36 months in prison and ordered to pay $1.12 million in restitution to the victims of his bankruptcy fraud and $1.17 in restitution to the Internal Revenue Service (IRS) for unpaid taxes. James pleaded guilty on October 19, 2005 to bankruptcy fraud and tax evasion. In his plea agreement, James, who at that time was the president and chief executive officer of Golden West Tacos Inc. (GWT), admitted that from May 2, 1998, through June 5, 2001, he fraudulently diverted more than $3 million in GWT income and assets for his personal use, including beverage and food supplier rebate checks issued to GWT and expensive residences purchased with the company’s funds. James admitted to hiding the scheme by transferring GWT assets to “off book” company accounts and accounts in the name of others, including his late father, his stepmother, and Sea Horse Enterprises LLC, a limited liability company that James owned and controlled. He further admitted that he transferred residences in Rancho Santa Fe and Palm Springs, Calif., to his nominees and concealed these transfers by making false entries in GWT’s books and records. In pleading guilty, James admitted that in filing Chapter 11 bankruptcy petitions, he concealed the existence and fraudulent diversion of approximately $2 million. James also admitted that he filed fraudulent individual income tax returns for the tax years 1998, 1999 and 2000 and failed to report more than $3 million in diverted GWT funds. In doing so, James evaded more than $1.1 million in personal income taxes for the three years.

New Jersey Man Sentenced to 48 Months in Federal Prison for Cash Structuring and Bankruptcy Fraud

On February 8, 2008, in Camden, N.J., Moty Rosenkrantz, aka Michael Rosenkrantz, was sentenced to 48 months in prison, three years of supervised release upon completion of his prison term, and ordered to pay a $10,000 fine. According to court documents, Rosenkrantz, who owned a business named B & W Motor Cars, pleaded guilty on February 5, 2007, to one count of structuring bank transactions to evade reporting requirements and one count of bankruptcy fraud. In pleading guilty, Rosenkrantz admitted that from late February 2003 through March 2003, he structured at least 38 bank withdrawals, totaling approximately $368,100. Furthermore, Rosenkrantz admitted that in July 2003 he filed a voluntary petition for bankruptcy, in which he falsely represented that no financial accounts in his name were closed, sold or otherwise transferred within one year preceding the bankruptcy filing date, when in fact, he had closed at least seven bank accounts in March 2003.

Lubbock, Texas Cotton Broker Sentenced to Federal Prison

On December 28, 2007, in Lubbock, Texas, Billie Wayne Spradling, Jr., a Lubbock businessman who pleaded guilty to a federal felony charge related to a bankruptcy matter, was sentenced to 24 months in prison. In October, Spradling, pleaded guilty to one count of false account in a bankruptcy case. Spradling was also ordered to pay $196,787 restitution for disbursement to the U.S. Bankruptcy Trustee in Lubbock. According to court documents, Billie Wayne Spradling Jr. admitted that he fraudulently failed to disclose $196,786 in assets and income from his cotton brokerage business, ACSI II, in documents filed in a pending involuntary Chapter 7 bankruptcy case against him. The schedules Spradling and his bankruptcy attorneys filed relied on false business and personal income information. Spradling falsely represented his financial affairs in those schedules to officers of the bankruptcy court, the creditors, the trustee, and the U.S. Trustee. Spradling further admitted that he conducted his business with no distinction between the corporate and personal businesses.

Former Owners of San Francisco Clothing Factories Sentenced for Concealing Millions of Dollars from Bankruptcy Court

On November 30, 2007, in San Francisco, Calif., Toha “Jimmy” Quan was sentenced to 48 months in prison and his wife, Anna Wong, was sentenced to 14 months in prison in bankruptcy fraud case. Both defendants will serve three years of supervised release after their individual prison terms. Also, the court will hold further proceedings in January 2008, to determine the amount that the defendants will be ordered to pay in restitution. Both Quan and Wong were convicted on May 23, 2007, on various federal charges including conspiracy to conceal assets, concealment of assets, bankruptcy fraud, the making of false statements on documents submitted to the Bankruptcy Court, and money laundering. According to evidence at trial, from 1997 through 2003, Quan and Wong placed three of their companies into Chapter 11 reorganization bankruptcy. Two of the companies – Win Fashion Inc. and Wins of California, Inc. – were clothing manufacturing companies operating in the South of Market area of San Francisco. The third, Tomi LLC, was a property management company. By placing the three companies into Chapter 11, the numerous creditors of the companies could not collect money due them. Evidence showed that both before and after filing bankruptcy, Quan and Wong deliberately transferred approximately $6 million in assets out of the bankrupt companies so that those funds would not be available to pay creditors. They moved the funds into other companies that they owned, and thereby placed the assets out of the reach of the creditors of the bankrupt companies and the Bankruptcy Court. The evidence further showed that they failed to disclose these transfers to the Bankruptcy Court, as is required by law. Additionally, evidence showed that Quan and Wong stopped paying its hourly workers in the clothing factory. By the time Quan and Wong put Wins of California in bankruptcy in August 2001, they owed over $800,000 in wages to their employees. The state of California, through the State Department of Labor Standards Enforcement, stepped in on behalf of the employees and was able to pay them out of a state fund maintained for the benefit of garment workers.

Civil Rights Attorney Sentenced to 36 Months in Prison for Attempted Tax Evasion and Bankruptcy Fraud

On November 27, 2007, in Los Angeles, Calif., Stephen G. Yagman, a civil rights attorney, was sentenced to 36 months in prison for his conviction in June 2007 on charges of attempting to evade the payment of more than $100,000 in federal income taxes and committing bankruptcy fraud. According to evidence presented at trial, Yagman filed federal income tax returns for the tax years 1994 through 1997, but paid only a small portion of the taxes that, according to his own returns, were owed to the Internal Revenue Service (IRS). As a result of the underpayment, Yagman accumulated federal income tax liabilities for those four years that, with interest and penalties, totaled more than $158,000. During the four years, Yagman also failed to pay significant amounts of federal payroll taxes owed by his law firm, which was then called Yagman & Yagman, P.C. Instead of paying these overdue federal taxes, Yagman engaged in a scheme to conceal his assets and to impede the collection efforts of the IRS. As part of the scheme, Yagman deposited hundreds of thousands of dollars into various bank and brokerage accounts in his girlfriend’s name to disguise his personal assets. Yagman used the accounts to pay for personal purchases and to conduct the majority of his personal financial transactions. In 1999, Yagman attempted to subvert the IRS’s collection efforts by filing for both personal and corporate bankruptcy. He made numerous misrepresentations and omissions in his bankruptcy petitions and in court proceedings relating to those petitions. Yagman failed to disclose in his bankruptcy proceedings various personal bank and brokerage accounts that he controlled, but were in his girlfriend’s name, as well as hundreds of thousands of dollars in legal settlements, client payments and attorney’s fees that he received in 1999 and 2000.

So Lee, my advice is to speak to a bankruptcy attorney, be honest with your attorney and a solution will be found. Oh yes, please stop using the cards.

Steve

Other Related Articles to Read

• I Am in a Debt Management Plan With Only $100 a Month to Spare. – Lynn
• My Husband is Going to Be Laid Off This Friday. – Lori
• Which Debt Settlement Company Do You Recommend? – Laura
• I’m 22 And Already Deep in Debt. What Should I Do? – Jerrica
• I Need Help Fast. They Want to Take Me to Court. – Luke
• Gamecock and Former New England Patriot NFL Pro-Bowler Pleads Guilty to Bankruptcy Fraud
• Former Accountant, Single Mom, and Tapped Out. – Cathy
• I Have No Income and My Disabled Sister is Living in My House. – Steven
• James in the UK is Feeling Horrible About His Situation.
• Do I Wait for the Court to Dismiss My Chapter 13 Bankruptcy? – Asia

Read the full article at GetOutOfDebt.org, click here: Can I Go Bankrupt Even Though I Used the Credit Cards to Get By? – Lee

URGENT QUESTION!

Renee

“Dear Steve,

My husband and I have both been unemployed since the first of November. We have two small children, two mortgages (total exceeds current market value), and several unsecured debts (nearly $20000). We are currently unable to even pay minimums.

The mortgage company will begin foreclosure if we don’t pay them $1500 within the week. We are on an intense hunt for work, but we haven’t found anything yet. I believe that we can see our way through this, but the phone rings incessantly and my husband’s negativity makes it hard to remain positive. He is certain that we’ll never get out of this and we should pack up and return to his home country.

I can’t change my husband’s attitude, but if I could get the phone to stop ringing, it would help to restore some of my sanity and help me to retain my positive focus. How do I get the phone to stop? And what should I be looking into? Credit counseling? Debt reduction? Bankruptcy? I get so many mixed messages online about what is the best avenue to pursue to see our way through this mess. Any suggestions would be appreciated.

Renee”

The Answer:

Dear Renee,

Let’s break down this situation into what it is. Your husbands reaction is understandable but not necessarily logical. Right now his fight or flight autonomic nervous system is working overtime. This part of our nervous system is supposed to protect us from real danger but it can also lead to panic, anxiety, depression, and mental fatigue. Does that sound like your husband right now?

Previously I wrote “How to Hide From Debt Collection, the Debt Collector, and Creditors“. If you follow the suggestions in that article it will help to make the calls stop almost instantly.

Stopping the calls will be good respite but it is not a solution to the overall problem. The critical core issue here is income. Without any income you have few options and could in fact wind up homeless and hungry. Income, any income, is going to be the key to a resolution.

I would suggest contacting all the temporary companies in your area. I just helped a very nice young man find a job in two days, it is not his dream job, but it is income at a time when he had none. While it is a difficult financial time right now, there are still jobs available.

Until you solve the income issue there is no need or reason to pursue any solution. Even bankruptcy will require you to pay some money so all solutions are unavailable to you till you can get money coming in.

Once you do begin to earn money again I suspect that your current situation is so far gone that any hope of catching up would be an unrealistic expectation. In that case, it makes not sense to enter any credit counseling or debt management program. You’d probably just throw good money after bad if you followed that route.

I think you will probably need a fresh start and bankruptcy would be the route to go. In bankruptcy you will give the house and your other debt would be eliminated. You will have an opportunity to start again.

I am not convinced that fleeing back home to your country is going to create a better situation. The current economic problems are being experienced by people all over the world. I believe that economic recovery will come first to the United States so if you are here now, keep fighting for work and to stay.

Since you are not making any money right now, be sure that you take advantage of all the benefits that you are eligible for. Read this article for specific details, “Holy, Divorced, Disabled and Desperately in Debt“. I think you’ll need to look at rent assistance, food assistance and the job directories linked. If you aren’t getting unemployment benefits at the moment, you should be. Look into applying for unemployment assistance also.

Big Hug!

@GetOutOfDebtGuy

Other Related Articles to Read

• I’m Frantic and Don’t Know Where to Turn – Karen
• My Husband is Going to Be Laid Off This Friday. – Lori
• Billion Dollar Foreclosure Settlement Money Goes Elsewhere
• How Can We Refinance Our Mortgage While I’m Unemployed? – Nicole
• What is the Best Way to Stay in Our Home; Foreclosure or Short Sale? – Marc
• Foreclosure in America. The All Too Common Story of How Dreams Turn to Dirt.
• Republican Presidential Candidates Not Specific on Help for Struggling Homeowners
• My Girlfriend and Friends Used My Credit Cards and Left Me Deep in Debt. – Sean
• Were You Foreclosed on in 2009 or 2010? Get a Free Independent Foreclosure Review
• Filed chapter 13 bankruptcy but mortgage company did not foreclose…house still in my name and is now a public nuisance. – JC

Read the full article at GetOutOfDebt.org, click here: How Do I Get The Phone to Stop Ringing With Debt Collectors? – Renee

“Dear Steve,

I am being sued by a debt collector/attorney’s office on an old WMU credit card account which was closed over 2 years ago. I’ve told them in writing that I have no income other than unemployment and no assets. My court date is scheduled end of January. This week I got a letter from them “subpeoning” me to come to their office and swear out answers to their list of questions as to whether I truly owe the debt. Is this something I am obligated legally to do or is it a ploy to put pressure on me to sign their paperwork before court?

Can a debt collector/attorney “subpeona” you to their office to swear out that you owe a debt to them?

Martha”

The Answer:

Dear Martha,

Depending on where you live, yes they can.

I asked an attorney friend about your question and here is what they said. “Sounds like standard discovery procedures, and my guess is that yes they can do that, just like the consumer is free to do to them. But I don’t know what state it’s in, or what evidence the collector might have, so I would suggest that the consumer either contact a lawyer in their state, or try to look up the state rules of civil procedures on their own, which they will likely have to do since they have no money.”

There is no substitute for good legal advice. Please find a licensed attorney in your state and seek their advice.

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’m 22 And Already Deep in Debt. What Should I Do? – Jerrica
• I’m in a Debt Settlement Program But Just Received a Civil Summons. – Isadore
• I’m Working With a Debt Settlement Company But My Creditors are Suing Me. – Jean
• Can a Default Judgement Be Awarded if I Am Not Served? – Michael
• The Chase Legal Department Says They WIll Sue Me. – Jacqueline
• Former Accountant, Single Mom, and Tapped Out. – Cathy
• I Have No Income and My Disabled Sister is Living in My House. – Steven
• James in the UK is Feeling Horrible About His Situation.
• I Have No Job. Should We Consolidate Our Debt or Go Bankrupt? – David
• I Had a Baby, Lost My Job, and Can’t Pay My Credit Cards. – Amanda

Read the full article at GetOutOfDebt.org, click here: I Had a Western Michigan University Credit Card. I’m Now Getting Sued On It. – Martha

“Dear Steve,

I’m frantic and don’t know where to turn. My husband of 20+ years informed me recently that he hasn’t been generating income through his business, so he has been taking out cash advances on credit cards, running up lines of credit on our home and other rental property, and depleted all his 401(k) accounts.

He’s done all this without telling me, and most of the debt is in our joint names. I am over 50, have not worked fulltime since our marriage and have a disabled child who needs 24-hour care. We are ready to file bankruptcy, and soon after that will face foreclosure. What can I do to move forward and provide for my child?

Karen”

The Answer:

Dear Karen,

Wow, well that was an utter mistake that will lead to your profound financial downfall. But as I always say, “No sense wasting a perfectly good mistake.” And it sounds like he has a lot to learn from his actions.

I’m going to assume that he did all of this in order to care for you and your child. I’ll give him the benefit of the doubt that his intentions were good.

But all of that aside we need to deal with the reality in front of us right now. You are busted broke. The only way out of this is going to be to close the door on all of this mess with bankruptcy. I suggest you click here to find a local bankruptcy attorney you like. It is important you find one to talk to ASAP so you can gain some comfort knowing you will be legally protected and represented. And by the way, don’t leave the home until the actual foreclosure, you’ve got some time. You will want the house to be foreclosed on first so the debt from that can be included in your bankruptcy.

While bankruptcy will put a stop to the legal and financial mess that is headed your way from the bad financial decisions he made that nuked your financial life, it will not help you to move forward, for that you need income.

The second step in the two stage plan is to have a game plan on how you will earn money as a family to care for your son, put a roof over your heads, and feed yourselves.

So let’s instead turn our focus to that, the bigger concern I have, the income. What is the plan? Have you spoken to your husband about his income intentions?

Your husband may feel absolutely horrible for what he has done behind your back in all of this. If his intentions were good and you feel you can move forward together, if you can find a way to forgive him, and move forward, that would be beneficial. He must have some skills to earn money and has done so in the past.

Forgiveness is hard, if not impossible for a lot of people, but the more you beat him up over this, the more depressed he is over this, the less likely your opportunities will improve moving forward.

So Karen, where do you stand now and what’s the income plan moving forward?

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

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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

• Boyfriend Cheats Me Out Of Money To Feed His Debt Habit
• How Do I Get The Phone to Stop Ringing With Debt Collectors? – Renee
• Our Friends Cashed Out Their 401K And Now Need to Walk Away From Their House. – Jody
• Billion Dollar Foreclosure Settlement Money Goes Elsewhere
• What is the Best Way to Stay in Our Home; Foreclosure or Short Sale? – Marc
• Foreclosure in America. The All Too Common Story of How Dreams Turn to Dirt.
• Should I Take Out a Loan from My 401k to Payoff Credit Cards? – Terry
• I’ve Got a 401(k) Just Sitting Stagnant. – Steve
• Republican Presidential Candidates Not Specific on Help for Struggling Homeowners
• Were You Foreclosed on in 2009 or 2010? Get a Free Independent Foreclosure Review

Read the full article at GetOutOfDebt.org, click here: I’m Frantic and Don’t Know Where to Turn – Karen

“Dear Steve,

I am a college student who has over 10 grand in personal credit card debt and I am getting chased by Barclay Card for a DirectTV Rewards Visa and Chase Bank for an Amazon and Amtrack credit card. This week I got a letter from Chase saying they were going to take me to court over the money I owe them. I have no income and my parents will not help. I am getting married next November and I do not know what to do.

Are there any organizations or groups where I can get a loan to pay for the settlements being offered by the Credit Card Companies and be able to repay them after I graduate this May. I am looking to get a job as soon as possible. I am desperate I will be getting served around November 20th.

Yonaton”

The Answer:

Dear Yonaton,

The only possible place I can think of, LendingClub.com, probably won’t lend to you because your credit score is damaged by your recent delinquent payments and collection accounts.

If you have no income then you won’t be able to do anything. You’ll just have to wait to be served, go to court for the case, you will probably lose and then have a judgment against you. That will appear on your credit report. But it is what it is.

When you start to make money again you can either pay off the judgements you’ll have or proceed to bankruptcy to wipe them out.

The underlying issue here is you incurred debt but appear to have no way to repay it. Now, unfortunately, you’ll just have to face the consequences.

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

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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’m in College and Getting Sued by CapitalOne. What Do I Do? – John
• I’m a Drowning College Student. Should I Use Money Management International? – Glenn
• I’m 22 And Already Deep in Debt. What Should I Do? – Jerrica
• I’m Looking for Information on the Obama Program to Cut My Debt in Half. – Chris
• Former Accountant, Single Mom, and Tapped Out. – Cathy
• I Have No Income and My Disabled Sister is Living in My House. – Steven
• I Am a College Student. How Bad Is It to Pay My Bills Late? – Zaria
• James in the UK is Feeling Horrible About His Situation.
• I Have No Job. Should We Consolidate Our Debt or Go Bankrupt? – David
• I Had a Baby, Lost My Job, and Can’t Pay My Credit Cards. – Amanda

Read the full article at GetOutOfDebt.org, click here: Where Can I Get a Loan to Pay For Debt Settlements? – Yonaton

Because of the volume of submitted questions, I am behind in personally answering every single one. I need your help. I am publishing the question below for you to answer. Please help this person by adding your response and advice in the comments section of the original question. Click here.

“Dear Steve,

Have a total of 19,000 in credit card debts, lost my job 2 monts ago called credit card companys they said their is realy nothing they could do to help me, I can pay my mortgage and basic bills but that is it, I have not paid the credit card companys in 2 months they keep calling , should I file bankrupcy or just not pay them?

Steve”

Read the full article at GetOutOfDebt.org, click here: I Lost My Job Two Months Ago and Have $19,000 in Credit Card Debt. – Steve

Marion

“Dear Steve,

My daughter was is 19 years old was offered a credit card at TD Bank, when she went in to take some money out of her savings account. She was told that it was a great time to get a card, and that they get commission/points for how many people they can sign up for a credit card. My daughter Liana was also asked if she had a job, and she specifically told them “no”, that she was a full time student. She was approved for the card anyway, with a $6000 limit, and now tells me that she owes more than $5,000 on the card, with no way to pay for it. What can we do??

What are her rights since I believe that this card was pushed on her, and approved through irresponsible and unethical practices. How can someone be approved for a credit card who has no viable way of paying for the card?

Marion”

The Answer:

Dear Marion,

Liana was 18 or older when she legally entered into the contract for the credit card, that makes it binding. Additionally, the lender is not required to qualify new cardholders to see if they can actually afford to make the payments. Being approved for a credit card does not mean you can afford it. It means that the lender is willing to trap you on the card.

Credit card companies and lenders go for young people because they know that once they hook them with a card, the person is going to hold onto it for a long time. One reason is that the young person has no means to pay it off.

Liana was not screened for the card, by her own admission she accepted the card in order to help a bank employee to meet a sales quota or target. That bank employee has now saddled your daughter with either bankruptcy, debt settlement, bad credit or years of debt repayment. Nothing good will happen from this point except that hopefully Liana has learned an early and painful lesson about the realities of credit and debt. Truly, this is the opportunity for the teachable moment.

If you are unable or unwilling to make her payment or pay off the card for her then you might want to make an investment in bankruptcy for her. That will cost around $1,800. And while she does not have a lot of debt compared to others, it’s more than she can handle. Other option is to drop out of school and force her to work to pay this off.

If you doubt anything I’m saying to you here, ask a local attorney for specific legal advice.

Big Hug!

@GetOutOfDebtGuy

Other Related Articles to Read

• I Have No Job. Should We Consolidate Our Debt or Go Bankrupt? – David
• I Have No Job, No House, No Car and No Way of Paying Back My Debt. – Diana
• I Lost My Job Two Months Ago and Have $19,000 in Credit Card Debt. – Steve
• I Don’t Have a Job to Pay My Debts. What Should I Do? – Reanna
• Elaborate Scheme Leaves 180 With Over $1 Million In Fraudulent Purchases
• Be Smart and Find the Best Credit Card That’s Right for You
• New Computer Virus Commits Post Transaction Attacks On Your Bank Account
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• University of Georgia Ph.D. Student Sentenced For Fraud And Identity Theft
• East Coast Credit Card Fraud Ringleader Gets 12 Years In Prison

Read the full article at GetOutOfDebt.org, click here: My 19 Year Old Daughter Owes $5,000 on a TD Bank Credit Card. Does She Have to Pay?- Marion

Linda

“Dear Steve,

I am recently separated from my husband in 2007, I had to run to another state for protection, and without a job i started charging and charging. So now I have $25,000. in debt and no job. I am 1/2 owner of the condo i am in, but cant take a home equity cuz I am not divorced totally yet. I cant afford the $700. a month payments….what should I do.

I cant afford the $700. per month payment……..can i negotiate it down, since i will have to default if i dont get it reduced.

Linda”

The Answer:

Dear Linda,

I certainly understand how you got in this situation and I’m sorry about it. Getting out of this debt situation isn’t going to be pretty but once it’s over, it’s over.

My biggest concern before we tackle the debt is that you have no job. Once the credit cards are cut off, and they will be, how are you going to care for yourself? What’s the income plan?

Historically situations such as your own often wind up in bankruptcy. Without any reasonable expectation that you will be able to repay and with income only sufficient to take care of yourself, it is doubtful that any money will be leftover to repay this debt.

These accounts will continue to build the balance up as long as you can’t pay at least the minimum payment and creditors are not interested in reducing your balance to give you a chance.

If you are not able to pay these credit card bills you will wind up in collections. I want you to know that is coming but don’t make any payment promise you can’t keep. If you have to say that you can’t make a payment right now, that’s fine. It is what it is.

Instead of using energy worrying about the debt, take that energy and try to find a job first. Income is the critical component in your solution.

Big Hug!

@GetOutOfDebtGuy

Other Related Articles to Read

• Is Bankruptcy After Divorce and Option? – Mandy
• I’m the Primary Wage Earner, Getting Divorced, and Upside Down in My Mortgage. – Anne
• My Husband Doesn’t Know About My Cheating. What Should I Do? – Lynn
• Out of My Divorce I Was Left With a Lot of Business Debt. – Lucy
• My House is Paid Off. My Husband and I Are in Deep Debt. – Debbie
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• ChevGirl Writes In And Says “My Marriage is Suffering Because of Our Debt”
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• I Have to File Bankruptcy But My Husband Says He Won’t Support It And Will Leave Me. – Julie
• Karen Writes In “Ex-Husband Isn’t Paying The Bills and He’s Trashed My Credit. What Can I Do to Repair It?”

Read the full article at GetOutOfDebt.org, click here: I Ran From My Husband For Protection But Now I’m in Deep Debt. – Linda

“Dear Steve,

I’ve been married for 4 years to my husband. We have a home, car, and one credit card in both of our names. We also have credit cards in just my name.

Our credit card debt has gotten out of control; to the tune of $93 thousand dollars. $75 thousand is in my name only.

I’m a stay at home Mom to a 22 mo old, and my husband works full time, bringing home $3000/mo after taxes. I know we have lived beyond our means, and am trying to start a budget, and not use the cards. We aren’t behind on payments yet, but are getting close to not making all of the credit card payments. I have made an appt. with a credit counselor to discuss a debt repayment plan, but wonder if bankruptcy is our only option, and if I should just do it in my name since I have no income and the debt is mostly in my name?

Should I file for bankruptcy or try debt repayment plan, and should I do it with my spouse or in my name only?

Mary”

The Answer:

Dear Mary,

When you go to see the credit counselor they will probably try to sell you into a debt management plan by telling you how scary and bad bankruptcy is. Don’t fall for the sales pitch, and that’s what it is. I don’t care if it says non-profit next to their name, in the credit counseling world that does not mean they have your best interest at heart.

I suspect that you’ve been using cards to either pay for routine expenses or taking cash advances to stay current on your other cards. With your level of income I really can’t see any realistic way for you to reasonably afford a repayment plan through a debt management program for the next five or six years.

If we take your debt out of the equation then you are left with $18,000 of debt in your husband’s name and that would be about $360 a month on minimum payments.

It seems more logical for you to fall on the sword and file bankruptcy yourself with the debt in your name only. Don’t enroll your husband in an credit counseling debt management program. Make at least the minimum payments on his debts and let his credit shine.

If you feel great regret over not repaying your creditors, just becuase you go bankrupt doesn’t mean that you can’t repay them latter, when you can, on your terms.

Call a local bankruptcy attorney or two, find one that you like and go into to see them before you say yes to anything with the credit counselor.

Let me know what you decide to do.

Big Hug!

@GetOutOfDebtGuy

Other Related Articles to Read

• I Had a Baby, Lost My Job, and Can’t Pay My Credit Cards. – Amanda
• I’m a Stay At Home Mom With Student Loans. – Chelsea
• I’m 22 And Already Deep in Debt. What Should I Do? – Jerrica
• We Can’t Keep Up Our Credit and Medical Payments. I’m a Stay at Home Mom Who Works Part Time. – Martha
• Former Accountant, Single Mom, and Tapped Out. – Cathy
• I Have No Income and My Disabled Sister is Living in My House. – Steven
• James in the UK is Feeling Horrible About His Situation.
• We Are Not Even Treading Water. Should We File Bankruptcy? – Rachel
• Can the Credit Card Company Take Our Home? – Carlie
• I Have No Job. Should We Consolidate Our Debt or Go Bankrupt? – David

Read the full article at GetOutOfDebt.org, click here: I’ve Made an Appointment With a Credit Counselor But What Should I Do? – Mary

Lori

“Dear Steve,

My husband is going to be unemployed Friday. We aren’t in dire straights just yet however there are only so many hours I can work.

He is making the radar but with 9 interviews underfoot and 2 more scheduled he still has found no work. We have submitted over 50 applications to still have no job.

The plant he works for is closing which is predicted to increase the areas unemployment by about 2%.

Debtwise- I have visited with a bankruptcy attorney and because the items we stand to loose are the items we need most- house (house payment is cheaper than rent would be), automobiles (need reliable transportation since live in rural areas and commuting is a must) we don’t stand to really benefit by bankruptcy.

I made the mistake of paying down credit cards instead of car loans. We have about $5,000 in credit cards between 2 cards. The automobile loan is what is going to kill us. We have 2 houses- 1 of which we rent out. (Couldn’t sell the house for the loan value when we moved.) The other house we live in.

I’m working all the hours I possibly can and actually more than I physically can. At some point in time it is going to have to stop.

Once unemployment kicks in we won’t be sitting as bad however for right now things are looking fairly grim. Any other suggestions. We have looked at our budget and cut expenses. About the only additional solutions anyone has is for me to quit working and live off the system.

I make too much for public assistance and it is simply going to get overwhelming in about 1-2 months. This option isn’t one that I relish since I have the physical ability to work I really don’t feel this is the honest and fair thing to do.

We have 3 kids- and although they are helping out where they can getting kid type jobs in the area is very difficult if not impossible. It is a poor rural area. People don’t have money to pay to have lawns mowed, babysitting etc.

Relocation/temporary separation is something we are considering so he can gain employment.

What is your suggestion to do besides just keep looking for work.

Lori”

The Answer:

Dear Lori,

While the situation is bad, and feels horrible, it could always be worse. I know it sounds crazy but seriously, rather than look at what is broken, find something each day to be grateful for.

I’m a bit confused why the bankruptcy attorney might have said that bankruptcy is not for you. It seems that if you can make at least your regular mortgage and car payment that under a chapter 13 bankruptcy you could rein in your other debts and still keep the home and car. It might be worth a follow-up call or visit to the bankruptcy attorney and ask about that.

At some point all you can do is all you can do. You can only work so hard for so long. I don’t want you to kill yourself trying to fix a situation that is impossible to fix on one income alone.

As far as relocating goes, it is always a consideration. When the dust bowel hit the midwest, farmers moved on because it was not raining, no matter how much they wanted it to. No matter how much you want new jobs to be available where you live, if there are no jobs available, there just aren’t.

In that situation you have two options, move, or start your own business and create your own income stream. Some people are naturals at stating their own business, other people are not.

If you did decide to relocate then that might give you the fresh start you so desperately need right now. It’s worth careful consideration.

Your situation highlights what I’ve been saying about the need for a savings account or an emergency fund in these difficult times. Once you find your way through these difficult times I want you to focus on slowly building a savings account that you can fall back on in case another unforeseen situation develops in the future.

Big Hug!

@GetOutOfDebtGuy

Other Related Articles to Read

• What It’s Like to Be Unemployed – Video
• How to Survive a Job Loss
• I Can’t Find Any Work to Pay My Bills. What Should I Do? – Bob
• I Just Got Fired From My Job. What Should I Do? – Marie
• What’s the Best Way to Keep Our Credit But Reduce Our Debt Payments? – Susan
• Should I Just Let the Truck Get Repossessed? – Beck
• I’m So Embarrassed About My Financial Situation. – Frances
• Federal Government Job Scam Halted
• I’m Using Stock Sales and Cash Value from Life Insurance to Pay my Credit Cards. – Thomas
• I’m Panicing About My Debt Situation. – Walter

Read the full article at GetOutOfDebt.org, click here: My Husband is Going to Be Laid Off This Friday. – Lori

Reanna

“Dear Steve,

I don’t have a job and I am currently 1,000 dollars in debt with my bank and credit card. I owe 500 dollars to each.

What should I do?

Reanna”

The Answer:

Dear Reanna,

I’m thinking that getting a job would be the right answer here. If you were making an effort and still not able to repay your debts then maybe I’d suggest a different option. Or if you were disabled and unable to work then that’s a different story.

But is you are simply unemployed then no solution is going to work until you either apply for public benefits, unemployment or find some income.

Even bankruptcy costs money so the irony here is that no income equals no options.

Try my job bank page and see if there is anything there for you.

One thing that you absolutely should not do is make any promise to pay that you can’t actually make. Collectors will then see that as a lie and be harder on you.

Big Hug!

@GetOutOfDebtGuy

Other Related Articles to Read

• I Have No Job. Should We Consolidate Our Debt or Go Bankrupt? – David
• I Have No Job, No House, No Car and No Way of Paying Back My Debt. – Diana
• I Lost My Job Two Months Ago and Have $19,000 in Credit Card Debt. – Steve
• My 19 Year Old Daughter Owes $5,000 on a TD Bank Credit Card. Does She Have to Pay?- Marion
• I’m Unemployed, No Job, Can’t Afford to Pay My Credit Cards, and I Need a Job. – Kim
• I’m 22 And Already Deep in Debt. What Should I Do? – Jerrica
• Former Accountant, Single Mom, and Tapped Out. – Cathy
• I Have No Income and My Disabled Sister is Living in My House. – Steven
• James in the UK is Feeling Horrible About His Situation.
• I’ve Been Out of Work For a Year and I’m Running Out of Cash. – Linda

Read the full article at GetOutOfDebt.org, click here: I Don’t Have a Job to Pay My Debts. What Should I Do? – Reanna