Is Bankruptcy the Only Answer? – Diane


Dear Steve,

I retired over a year ago. I began using credit cards to continue to support the lifestyle I had been living. MISTAKE NUMBER ONE.

I have spent all my retirement savings to continue to pay the cc’s on time. I now have no savings and no money. I am not ignorant. I know how this happened and I know who to blame.

I need help yesterday. For the first time I am unable to pay my debt on time. That’s today 11/30/16

Is it too late for me to get a handle on this situation?

Is bankruptcy the only answer?



Dear Diane,

Thank you for writing me and sending me your spreadsheet that showed you have 19 credit card accounts and owe $84,120.


Somehow I need to convince you to get ahead of this issue instead of the constantly trailing behind and reacting. It’s time to be proactive and stop being reactive.

The situation you face is both tragic and common in my world of helping people with money problems. Yes, you used credit cards to support a lifestyle you could not afford. But that wasn’t the mistake that concerns me.

The real tragedy was to use of retirement money to prolong the inevitable. I’m less concerned about you filing bankruptcy now than the amount of time and retirement money lost because you didn’t file bankruptcy sooner.

Appropriate debt solutions are often addressed first by many as an emotional decision. They avoid facing their debt and avoid things like bankruptcy because of how they feel about bankruptcy.

But dealing with financial problems is actually best dealt with by putting emotions aside and reviewing the math first. The math is pure and does not lie. Math is not judgmental.

And I think it is very clear from what you have described that the income is just not there to support continued payment on the debt. Nor are their any more retirement funds to siphon off to keep up the show. The jig is up.

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Of the $84,120 in credit card debt you have your data shows that there is only $4,891 left in available credit. You are clearly out of available credit and out of time.

It is at this point that people start to mentally shut down, fall into a funk, wind up with depression, and feel as if they are failures and losers. Again, those are emotional responses and not reality.

Reality is you made some mistakes. But rather than wallow in pity, let’s use those as lessons not to do again and get this mess fixed. You’ve just received a graduate degree in what not to do and you will use those lessons to do better moving forward.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

The major hurdle is not going to be dealing with the debt. It’s going to be adjusting your life to fit within your new financial reality. The lifestyle you supported on credit you can’t afford is gone. A new lifestyle of much less is the future. How you uncover your happiness in your new lifestyle is going to be the challenge. And that new lifestyle might mean you’ll have to go back to work.

It does not sound as if you have much remaining in the way of assets and you’ve already said your retirement money is gone. Based on that the logical answer is not that bankruptcy is the only answer. It is the best answer.

A consumer bankruptcy filing is a legal fresh start. It is the fastest way out of a horrible situation in the least amount of time for the smallest amount of money and the most protection under the law. Bankruptcy isn’t a funeral in situations like this, it is a blessing. You should read “So You Are Going to File Bankruptcy. That’s Good News. Congratulations.”

I would implore you to find a few local bankruptcy attorneys who are licensed in your state and make some appointments to go in and discuss your situation for free. They won’t bite.

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Post an update for me in the comments and let me know how it goes.

If anyone is going to judge you for this situation it will be yourself. I certainly don’t judge you and in fact wish you many days of happiness and new opportunity ahead.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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