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I’m in Debt, on Benefits, Have Kids, and Not Much Money. – Alicia

“Dear Steve,

I am in debt and need help. I have 6300 debt with 10 companies. I am on benefit with two kids and not much money. The debt manager wants 40 of my 100 each month and says it will take me 8 years to pay it off. But is that the best way. I offered everybody 5 to 10 per month and wanted to do snowball theorie but they want much more money. I am moving now and dont know if i should tell them where to and if i should pay off say 2 companies in 3 month and then pay other ones. Please answer me.

Thanks.

Alicia”

Dear Alicia,

My primary concern is the $5 a month strategy really doesn’t resolve anything. Paying that taken payment will neither reduce your debt nor prevent a creditor from taking legal action.

Honestly, in your situation the best course of action is to talk to a local bankruptcy attorney and find out about discharging your debt and getting a fresh start, or using the debt snowball approach to repaying your debt.

I just think that making payments with the few dollars you have left is not a wise idea. I’d rather see you put those dollars into a savings account or emergency fund to give you a little financial protection when the next surprise happens. And it will.

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.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

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

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About the author

Steve Rhode

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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