I Was Researching Debt Relief Companies And Found You. I Talked to Dave Ramsey a Few Months Ago. – Deborah

“Dear Steve,

Hi. I was researching Dept relief companies and their validity and discovered your sight . I really appreciate what you are doing. It is a big, bad scary financial world out there.

Bottom Line….

My husband has been unemployed for 2 years. Got downsized right before the economy tanked and hasn’t been able to find full time work. We left The Big City one year ago and moved to the midwest and cut our expenses to LESS than 1/3 of what it cost to live in on the coast.

We have 6 kids. Are currently on food stamps/medicare.

We haven’t used our credit cards in the entire year since our move. Literally living hand to mouth each month with the part time job/s my husband has been able to find.

I’ve had some work, but with the kids I haven’t been able to bring in anything significant enough (although I was able to pay our rent for a bit last year by doing babysitting – which hasn’t been working out since 🙁

We panicked that first year and tried several (scam) businesses and drove our credit cards up to $84,000. In addition to that we have about 24,000 in student loans.

We own our cars and are renting our house ($850 month). We just were informed on Friday that the company my husband has been working for is closing down immediately.

We had EXCELLENT credit and had been able to pay minimum monthly payments through this past month (we missed Nov and now Dec). But now we are totally broke. The only creditor I still paid is the student loan.

Now the credit cards are calling.

I spoke to Dave Ramsey back in Oct.- he said to wait 3-6 months of not paying the credit cards and then settle. He didn’t seem to think I needed bankruptcy, and I didn’t know to ask him about going through the NFCC. I made an appointment with one company for tomorrow (Tues). Now I see on your sight that even these non profit places are not so straight forward.

My fear is “getting sued” by the credit card companies as well as having a clear way of getting out of this mess without getting “taken” again.

Thank you so much!

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Your Question 1) Is it realistic and preferable to deal directly with the credit card companies myself? Is that better than bankruptcy? I called a few of my credit card companies prior to not paying my minimums and they couldn’t work anything out that I could do in my budget.

Is there anything else besides bankruptcy?

Is bankruptcy necessary in my situation?


Dear Deborah,

Wow! Dave Ramsey gave you horrible advice. The only thing that did by waiting was allowing you to lose months of your life stuck in the mud. And some people wonder why I don’t talk about Dave. Here is the bottom line. Dave has a personal problem with bankruptcy. Ironically it was bankruptcy that saved Dave. See Dave Ramsey – Bankruptcy Bigot or Personal Finance Saint?

But bankruptcy is a legal and sanctioned solution for debt problems. Debt settlement is not. If you are prepared for a shock, read The Truth About The Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy.

While you have been current on your debts, I have to ask, at what cost? You are living hand to mouth, barely getting by, not able to save, and not able to create a safe financial environment for you and your kids.

Now let’s imagine how different your life would have been if you found me earlier and had gone bankrupt months ago. Instead of just making minimum payments, you would have been able to use that money to save and build an emergency fund.

Honestly, when I weigh the options, bankruptcy is the best course of action and here is why.

  1. There is no expectation that your income will stabilize to a point where you can agree to a monthly payment on your debts over a long period of time and have money to save to build an emergency fund.
  2. Your student loans are not dischargeable in bankruptcy or in a debt settlement program.
  3. If you decide to stop paying your debts and go the debt settlement route you can and will be sued. Collectors will call you, friends, and family and the pressure will be enormous.
  4. You don’t need more pressure at a time when life is stressful enough to get by.
  5. Nothing says that because you go bankrupt that you can’t repay your debt if you want to after your bankruptcy.
  6. The sooner you go bankrupt the quicker we can work to rebuild your credit,
  7. Debt settlement and bankruptcy will both hurt your credit and remain on your credit for essentially the same period of time.
  8. If you settle your debts you can be liable for a huge tax bill for the forgiven debt. You would then owe the IRS.

Deborah, I urge you to click here to find a local bankruptcy attorney you like. Make an appointment to go in and chat about what bankruptcy would mean for you. Don’t feel like you need to make a decision that day, just go home and think about what you learned.

So why is bankruptcy better in your situation.

  1. You will get immediate legal protection from your creditors.
  2. Debt collectors may no longer contact you or call anyone else.
  3. You can not be sued for your debts.
  4. You will not make any more payments towards the debts.
  5. The debt will be forgiven with no tax liability.
  6. You will get an opportunity at a fresh start right now, not four years from now.

Please update me on your progress by

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‘.

Damon Day - Pro Debt Coach

5 thoughts on “I Was Researching Debt Relief Companies And Found You. I Talked to Dave Ramsey a Few Months Ago. – Deborah”

  1. Followed your advice, saw a bankruptcy attorney and just filed yesterday. (Husband out of work 2.5 years, 84,ooo in credit card debt and 6 kids….) Haven’t been to court yet, but hopeful about the future.

    We have 22,000 in old SallieMae student loans. Our lawyer explained that normally student loans are not covered in bankruptcy, but we have 90 days to ask the judge for bankruptcy relief because of undue hardship of this loan due to number of kids and lack of income. He says it will cost $4000 in his fees to argue this to the judge, but feels we have a case an this too may be forgiven in court. I don’t have the $4,000 right now. Current payments to Sallie Mae are $236 month. Is it worth it to push and raise the $4 grand, or just pay the loan out monthly. Or are there any other options you know?
    Thank you so much for your guidance until now. It is more appreciated than you know.

    • Deborah,

      First, thanks for the pat on the back. It means a lot to me.

      I know of no other option to get rid of the private student loans. It is not a guaranteed approach but it really comes down to the experience your lawyer has making this argument and his/her confidence in your case to go ahead with it.

      I wish I had a better and more definitive answer for you on this but I’m afraid I don’t. Good news is that I’ve seen this actually discharge student loan debt for some.


  2. Ok. processing….I already spoke with one attorney and will follow through with another one and will let you know.

    Thank you for the straight talk.

    Big hug right back at ya’ for being there.


  3. Steve,
    Deep sigh. Ok. I hear you. I have put in calls to some lawyers and am making appts.
    In all fairness to Dave, I called him when I was at the end of being able to continue to pay my minimums. I don’t think I could have even mentally considered bankruptcy when I still had a penny to my name.

    Just cuz you’re listening…I’m going to ask…

    1)You really make bankruptcy seem rosy. Honestly, what are the CONSEQUENCES I am going to have to suffer (I will weigh those against the awful bill collectors). It carries such a stigma. We don’t own our home, and fear that we won’t ever have that option for another 10 years (if/when we do start making money).

    2)Now online, I’m finding a whole host of techniques of not giving information to debt collectors calls as a way of them just not continuing to call because it falls under harassment. Sort of reverse threatening them. Is this legal to do to the actual credit card companies I owe, or just to the debt collection agencies that the debt has been passed to. In the end – does this work?

    Bottom line. I have to concentrate on getting money into this household to keep a roof over our heads and basic expenses, and some kind of safety net for when life “happens”. I have to deal with these debts quickly and correctly.

    What sayest thou?

    • Deborah,

      1. Bankruptcy is rosy when compared to the other solutions available like credit counseling or debt settlement. There was a time when I founded and ran a credit counseling agency but that was back when credit counseling had some real benefits for consumers in trouble. Not any more. That’s why I got out.

      Is bankruptcy the thing you want to grow up to do, not really. I no more wanted to go bankrupt than drive a nail in my foot but you do what you have to do to protect your family. The reality is that it is in the creditors best interest to scare people about bankruptcy and tell people it is a bad thing. As if lending way more money than anyone can afford to repay isn’t a bad thing. Funny, no stigma associated with that.

      I can show you how to start rebuilding your credit immediately after bankruptcy. When you start making money, within two years you’ll get a car loan, within three a mortgage. In fact you’ll start getting new credit card offers immediately.

      2. Let me speak bluntly and candidly, those techniques are bullshit. They suck down life energy, create stress, and draw the process out and do nothing to address the underlying issue or prevent you from being sued by your creditors. If you want to hide from your collectors for a bit to get a break, heck even I show you how to do that, but I also say it is not a solution, it is a temporary fix. “Avoiding the debt collector does not change the reality of your financial situation and like time, it will march on no matter if you want it to or not.”

      I sayest if thou follow my advice you will findth peace quickly.



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