I Need an Honest and Straightforward Answer. – Andra

“Dear Steve,

Three years ago my husband and I moved back to Los Angeles for me to pursue my dream of owning my own clothing business (with a partner). We sold our home in 2003 and make 200K. Moved to Colorado bought a bigger house for 380K disliked CO sold it for the same amount, moved to NV bought a house for 390K and sold it in 2005 for the same amount to move to Los Angeles. In which during that time we had excellant credit and many credit cards with high limits.

Starting 2006 we weren’t able to keep up with the credit card debt which made us default on all the cards and eventually now they are in collections about 75K. We just moved back to Las Vegas to live with family because we couldn’t afford living in Los Angeles and not to mention both my husband and I lost our jobs. we have no idea what to do now I think most of the debts are 3 years old no judgments as of yet, just a lot of collection agency calls. We honestly can barely survive on what my husband makes about 3K a month.

What shoud we do? Should I try to negotiate with the creditors (however we can afford so little to pay each month I doubt they will accept the offers. Or file bankruptcy? At a loss trying to find work which has been very difficult in this economy. Would love an honest straightforward answer please. We need to get out of this debt before it ruins us!


Dear Andra,

I really can’t see any point in ‘negotiating’ with your creditors. The underlying problem is that you have no financial bedrock at the moment. If you think you could afford to make payments of about $1,500 each month, give it a shot.

The reality is that your life has wildly altered the path it was on when you were incurring this debt. You are faced with two divergent paths. One path would involve years of sacrifice, living a marginal existence and putting your life on hold to try and satisfy the debt you have now.

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The other path involves you accepting there is no reasonable expectation you can repay this debt in your current situation. In that case bankruptcy is a legal and logical course to follow.

You are not harmed by finding a local bankruptcy lawyer you like and going to see them to discuss your situation. Out of that appointment you will gain knowledge and with that knowledge you will be able to make an informed decision if bankruptcy is for you.

Please update me on your progress by The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

Damon Day - Pro Debt Coach

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