April Writes And Asks “Is There A Debt Program That Can Help Me And Protect My Credit?”

“Dear Steve,

I am married with three children 11, 4 and 3, I also have an 11 year old step son. We live in Jersey. My husband is a disabled vet (from the first gulf war). He gets a pension and I work at home so I can take care of the kids our income is less then $50,000 per year, our money is very limited. Since everything cost double it’s been harder and harder to pay bills. I am on time with everything. I am very concerned with my credit score. I’ve been flirting with debt consolidation but am a bit leery to what it will do to my credit. Plus their fees almost equal what I’d be saving in interest. I’ve tried calling my credit cards to have my interest lowered and they won’t budge (I really don’t think they have a soul charging over 23%, it should be against the law). I’ve tried borrowing money and no one is lending even with a score close to 700. What’s the point of having good credit? I want to pay my bills but they are chocking me and my family. Do I pay my bills or feed my kids? Even PB and J is getting expensive with a loaf of bread over $3.

Is there a program that can help me that will keep my credit intact?

I will appreciate any advice!

Thanks in advance,


Dear April,

I’m so sorry that you are living through this right now. I know it is stressful but I think I have some advice that will help.

First, let me get right to answering your question if there is a debt consolidation program that will help you keep your credit intact. No, there is not. The only way to get out of debt without hurting your credit is to pay the debt in full or as agreed in monthly payments.

Credit agreements are “take no prisoner” contracts. They don’t make room or allowances for people to pay what they can afford. Instead they ask you to make firm promises to repay the loan in full or with regular payments. Anything outside of those payments is an exception and reported to the credit bureaus.

If you send less than you owe, it will be reported. If you go into a credit counseling program, footprints will appear on your credit report. If you sign up with a debt settlement company, you’ll fall behind on your debts and that negative information will be reported. If you go bankrupt, that will be reported for sure.

But the issue here is twofold. First, you can’t live a life you can’t afford to preserve a credit score. While your score is good, the consequences to living for that score are not so good.

Second, while you may be current on your bills, you won’t be for long. You are living so close to the edge that all it will take is one unforeseen event and your budget will be shot. Besides a safe monthly budget needs to include some money set aside in a savings account to build an emergency fund. If you can’t do that, you really are not making it from month to month now.

I am hopeful that you are receiving all the VA benefits you can for your husband. If not, here is a quick list of special loan programs for VA eligible members.

I know you’ve tried to call your credit card companies to lower your interest and they won’t budge, I’m not surprised. The issue here is that you are current on your bills and the customer service reps that talk to you when you are current don’t have access to those special programs to adjust your interest or payment. The irony is that to reach those customer service reps you’ll have to go past due on your bills and that will hurt your credit score. Creditors don’t reward people for being proactive.

Another question you had was do you feed the kids or pay the bills. The 100% honest and moral response is that you fee your kids first. You need to put the priorities in the right order. They should be:

  • Food
  • Shelter
  • Utilities
  • Clothing
  • Car or Truck Payments
  • Other Needed Utilities (Reasonable mobile phone, cable TV, saving for an emergency, an occasional fun thing for the kids)
  • Creditors

Do you have an obligation to repay what you borrowed? Yes you do, but if prices have gone up and you can no longer meet the bills under your current day-to-day reality, then what has actually happened is that the loan agreements remained the same but your life changed around them. That happens, that’s normal.

Are creditors soulless who charge 23% interest? You made that statement as well. Just yesterday I wrote about an account at 36.5% interest. In Europe the interest rates on a credit card can be even higher.

I’m afraid you’ll have to shoulder the 23% interest argument. The interest rate calculations are covered in the terms and conditions that come with each card. If you did not want to be subject to them increasing the rate then your options are to not take out the credit card to begin with or pay the balance off in full. That is the only way for you to gain your freedom from the terms you agreed to when you took the card out.

Let’s change a few things here.

  1. Read my article about getting cheap bread. You should not be paying $3 for a loaf.
  2. Read my article about where to buy cheap food. Doing that will help lower expenses.
  3. Come to terms with the fact that your credit score is probably not going to be sustainable and loosen your grip on that.
  4. You can try a debt management or credit counseling program if you want and see if they can come up with a monthly payment you can afford over a five to seven year period. But before you do that I want you to read what I said about credit counseling programs in this article.
  5. If you take a good honest look at what you can afford to repay each month and it does not meet the creditor minimum payments then you might consider bankruptcy. If so, speak to a bankruptcy attorney for a free bankruptcy review and get the facts.

April, let me talk to the mother in you for a moment. Your children are young an impressionable. Please be sure to sit them down and have an honest conversation about the struggle that are going on. They need to understand that the reason you might say no to stuff they might want is not them, but the budget. They need to understand that it is the financial situation that makes things tough at times but no matter what, you love them with all your heart and soul.

Big Hug! Here is an extra hug for the kids.


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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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1 thought on “April Writes And Asks “Is There A Debt Program That Can Help Me And Protect My Credit?””

  1. Dear Steve,

    I wanted to thank you for your suggestions.

    A little history, in 2001 I filed bankrupcy because a divorce. I worked really hard to get my credit score up again, that is why I have such a tight grip on it. As for paying the bills or feeding my kids, of course I’d feed my kids before I even paid my morgage (if it came down to that). It’s just come down to pasta every night, I can’t remember the last time we ordered pizza! Our menu is down to the basics.

    My 11 yr olds in sports (right now football, that can be expensive too). Plus he’s starting to eat like a horse. My 4 year old will be starting baseball in the spring so registration will be double next year. So that’s as far as it goes for entertainment!

    My husband is 70% disabled through the VA (and his right arm is paralyzed). We don’t have a VA mortgage (our debt to income is to high to qualify for that), but I was hoping that there was some kind of other loan program that would work.

    I do have a school loan, I called and had a month differed to try to catch up. You have to qualify for it and of course I did. You have to show financial hardship. So that might be helpful information for anyone who might have student loans.

    Thanks again,



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