“Dear Steve,

I am a working, single parent who owns a home (well, me and the bank). I am not behind in anything YET. I owe $147k on the home, it’s currently worth about $110k, so, no equity. A few months ago my company downsized. I kept my job by accepting a 10% pay reduction and taking on more responsibility from positions that were vacated and not re-filled. Total debt on cards is now up to $38k. I used to use the cards for extras but now I use them for the extras (like school supplies & uniforms, car or home maintenance & repairs, gifts for birthdays, weddings,etc., clothing & shoes for the kids…) and, at least once a month, for gas and groceries since the pay cut. I finally woke up one day and really saw where I am headed financially (I admit I had my head in the sand for a while). I am trying to put the brakes on the extras, budget better for groceries, gas, and everything else and not use the cards (I took them out of my wallet and it helps). I now make just enough to pay the bills for our monthly expenses, mortgage, and to cover the payments for the cards.

I get stuff in the mail all the time about refinancing my mortgage, debt consolidation, debt settlement, debt management, bankruptcy. I’ve checked into some of them. Once you get on the phone with banks and mortgage companies and they look you up the answer to refinancing the house is either “no” or they don’t have anything available that would reduce my house payment but would actually increase what I pay monthly (the benefit would be in the long term by reducing my interest rate over all but would not help me right now). Lending Club was a negative also. My income to debt ratio is the problem there. So, debt consolidation seems unlikely. I know the best way to do it would be to pay minimums on the lowest rate cards and put extra money toward the highest rate card and pay it down faster, but, there is no extra money to be able to do this. I know for debt settlement you actually have to be behind in your payments but I really don’t want t o go there. In essence, I am just really frightened of the downward spiral I’m in and I want to stop it and try to start working my way out. Do you have any advice for me?

Susan”

The Answer:

Dear Susan,

When you said you’ve had to use the cards to make ends meet, that tells me you have already tipped over the edge and unless you get a sudden increase in income it’s probably too late for a conventional solution like a LendingClub.com debt consolidation loan or a credit counseling program.

The problem is that right now your reality and your desires just are not going to match up. The current situation is not one people generally can pay their way out of. While you want to find a real way to dig yourself out of this hole, there really isn’t one with as tight as the budget is now.

It’s like this, while you might want to try to fix the past, that’s not as important as trying to fix tomorrow.

I suggest you face the reality of the situation head-on, accept it for what it is, learn from it, click here to find a local bankruptcy attorney, and go talk to them.

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’m An Attorney And Struggling to Pay My Bills. – Pamela
• Massive Credit Card Debt, Three Kids in College, and Getting Nowhere. – Mike
• Recent Law School Grad Struggling to Pay The Bills. – Lisa
• Can I Accept Responsibility and Pay Off My Debts Without My Husband’s Assistance? – Debt
• Personal Finance Struggle Universal. Many Dealing With Trying to Make Ends Meet.
• What is My Best Course of Action? – Patricia
• My Health Insurance Went Up and I Don’t Make Enough Money. – Diane
• An Experienced Mom Prepares for a Baby
• My Sons Went to College and Have Six Loans I Can Barely Afford. – Marcia
• My Credit Score Dropped and I Want to Get Out of Debt. – Renee

Read the full article at GetOutOfDebt.org, click here: I’m Stuck In The Middle Of My Debt And Don’t Know Where to Turn. – Susan

Blanca

“Dear Steve,

Can you give me more or less guidence on what I need to do. I take home about $1,900.00 single parent and Im in debt about $11,000.00 I make more then the min payments but I’m always broke currently I just fill overwhelmed with not being able to have money. Do you think bankruptcy is one of my options or what I need to do. I am current on all of my bills. Thank you so much for your assistance.

Blanca”

The Answer:

Dear Blanca,

The first two things I would look at would be to cut back to just the minimum payments and save the difference between those and what you have been paying. Building up your savings will take the edge off the stress and pressure you are feeling now.

Secondly, if you typically get a big tax refund check each year that tells me you having too much money withheld from your paycheck each month, when you need it most. Adjust your withholdings so you break even at the end of the year.

As far as bankruptcy goes, it might just be a real and valid solution for you. I would suggest that you find a local bankruptcy attorney that you like and go in and talk to them. Lay out the entire situation and let’s see what they say. Going in to talk it over does not mean you are going to file bankruptcy. It means you are seeking advice and information so you can make a good decision for you.

By the way, people that are current on their bills go bankrupt all the time. Being current right now does not mean that you can sustain that level of repayment for the future.

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‘.

Other Related Articles to Read

• Debt Free! And You Can Be Too
• We Can Make the Minimum Payments But Can’t Get Ahead. – Andy
• How Do I Get the Credit Card Company to Lower My Payment to What I Want? – Sally
• I’m Stuck In The Middle Of My Debt And Don’t Know Where to Turn. – Susan
• I Supported Someone for Three Years That Completely Drained Me. – Jessica
• My Wife and I Are Both Maxed Out on Credit Cards. Where Can We Go? – Alvaro
• How Do You Value Your Quality of Life? Debt Solutions to Fix The Future
• I Lost Most of My Income. How Can I Get My Debts Reduced? – John
• I’m Barely Making My Minimum Payments. What Can I Do? – Pete
• I Want to Get Out of Debt Without Bankruptcy. – Kristy

Read the full article at GetOutOfDebt.org, click here: I’m Always Broke. What Can I Do? – Blanca

Jeanie

“Dear Steve,

I have already gone to bankruptcy five years ago. I am currently in credit counseling, however, I do not have enough money to provide food and clothing for my child. I am a single parent not receiving child support, I have no child support judgment. Long story, but I felt it was in the best interest of both of us to cut off contact.

If I filed chapter 7 in 2003, can I file chapter 13 in 2008? Will that be better for me than the CCCS (Consumer Credit Counseling Service) debt management program?

Jeannie”

The Answer:

Dear Jeannie,

I think in a way you’ve answered your own question. The debt management plan you are on with CCCS, a non-profit credit counseling group, does not leave you enough money to properly care for you and your child.

It is understandable and admirable that you want to do everything you can to take care of your family and I recognize that it is a struggle and burden. But at this point you need to think about the fact that you probably have a greater responsibility to properly care for your child moving forward than trying to repay bills that you can’t afford to pay from the past.

I think your instincts are on target and that you should go talk to a bankruptcy attorney for a free bankruptcy review. And you are right, since it has only been five years since the last bankruptcy a Chapter 13 bankruptcy is probably the solution at this time.

In a perfect world your daughter’s father would be paying child support and you would not have to be in this position and struggling to care for your precious daughter and your debts. But then again it’s not a perfect world and we have to do the best with what we’ve got. The best you can do right now is take care of the past bills with bankruptcy and get yourself in a financial position where you can properly care for you and your daughter by feeding and clothing your child.

Don’t let your guilt about the situation and the pain of your previous bankruptcy hold you back from making the right choice this time. I think if you talk to your CCCS counselor and tell them the same thing you’ve told me that they would, or at least should, agree with my advice to look at bankruptcy again as the logical solution.

Now, please make sure that you were not using credit up till this point to help make ends meet because going bankrupt again will not solve that problem. Hopefully with your second bankruptcy you will be able to find a way to live within your income without any dependence on outside credit.

Big Hug!

@GetOutOfDebtGuy

The Answer:

Other Related Articles to Read

• April Wants To Know “As A Single Mom, How Do I Get Out Of Debt?”
• Eva Has Heard Negative Things About CCCS
• Crys Writes In And Asks “We’ve Been to Credit Counseling But Should We File For Bankruptcy?”
• All About Bankruptcy – Chapter 7 Bankruptcy – Chapter 13 Bankruptcy
• How to Shop for a Good Debt Management Program
• Lauren is Searching For Ways to Get Out Of Debt And Make Her Bad Credit Go Away
• I Am in a Debt Management Plan With Only $100 a Month to Spare. – Lynn
• Kayte Has Drained Her Savings And Can’t Pay The Bills Anymore
• The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy.
• What Do You Think of the CCCS company Money Management International? – Carol

Read the full article at GetOutOfDebt.org, click here: Jeannie Already Went Bankrupt And Is Now With CCCS But Can’t Afford to Feed Her Daughter