The Navy Tells Jonathan to Contact Me For Advice

Dear Steve,

I’m a 30-year-old married man, 2 children. My wife lost her six-figure-a-year job in real estate. Since then, we have lost two homes to foreclosure, 1 vehicle repossessed, and 15 major credit cards maxed out and not paid for 2 yrs+. Everything is in the collection.

We have about $1.2 million in unpaid debt. I want to file for chapter 7 bankruptcy and keep what little good debt I have active. Navy/military attorneys told me to talk to you before seeing a bankruptcy lawyer.

The current budget leaves me with nothing extra month to month after paying the debt I can afford.

What is the next step in pursuing bankruptcy?




Dear Jonathan,

In a way, your story is very similar to one I heard on the radio the other day about a woman, who lost her mortgage broker job and is now in terrible financial shape.

Based on my years of experience in helping others and after living through financial problems myself, I can offer you this frank and unvarnished assessment of your situation; the bad news is, you’re screwed.

There is no reasonable expectation that you’ll be able to crawl out of this deep and dark hole. Putting your past financial life and the wreckage it has left behind to rest is the best thing you can do at the moment.

The good news is that since the car has been repoed, the homes foreclosed on, and all the bills past due, bankruptcy should be the final chapter in that part of your life.

So let me give you some good basic advice about what to do next. While your situation feels like a real mess, it seems fairly straightforward from a bankruptcy attorney’s point of view. This should be a case any bankruptcy attorney can handle.

You can find a good local bankruptcy attorney and have a free discussion about what bankruptcy would mean for you. Bankruptcy is the fastest way to get a fresh start for the least amount of money.

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The key for you to select a bankruptcy lawyer should be communication.

You want to make sure you are working with a bankruptcy attorney and their office that you feel comfortable communicating with, you feel like they take the time to answer your questions, and you are not treated like a number.

The paperwork for your bankruptcy will be what it is, just data gathering and court forms. The actual process of going bankrupt will be fairly easy and clear, and before you know it, you can close that chapter of your life.

At this point, the most responsible thing you can do is to go bankrupt as quickly as possible so you can begin to rebuild your new financial life.

And rebuilding your financial life will be important. Otherwise, your credit reports will end with a string of bad debts followed by bankruptcy. To rebuild your credit report and credit score, you’ll have to get back into the credit game.

I know it sounds silly to talk about such things even now, but you will find that you will start getting new offers for credit in your mailbox even before the final discharge of your bankruptcy.

However, you can rebuild your credit report and credit score starting with secured credit cards that report to the major credit bureaus.

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

With a secured credit card, you get a credit line equal to the deposit you place in a savings account with the bank. In case something happens, the deposit will pay off the account, so you can rest easy knowing that you can’t get into debt with that card.

As you use the card, your credit report will start to show responsible use of credit again, and time will pass from your bankruptcy. Those factors will help to bring your credit score back up, and in a couple of years, your credit score will probably be as good as it ever was.

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A good credit score is important as you look into the future and think about a new mortgage in the future, a car loan, or maybe even private student loans.

I’m certainly sorry that you’ve had to live through these dark issues and the pain that goes with all of this financial uncertainty, but if you look at the bankruptcy as the final stage in your misfortune and immediately start to rebuild, you will be able to get a better life back for you and your family.

When I went bankrupt in 1990, it created some of the worst days in my life. I don’t feel like that. You have a bright future to look forward to. Use what you have learned from this experience, and maybe, just maybe, you’ll do what I did, take that experience and help others. Pay it forward, my friend.

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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