Struggled With Mental Illness and Debt and Ready to Deal With It


Dear Steve,

I struggled with some mental illness and got lost in debt – I couldn’t face it, so I ignored it. I was sued by three creditors and didn’t show up for court. I know. I am an educated person, so I know what this looks like, making it worse.

Will the law firms settle for less even though I did not show, or should I file a chapter 13 I wouldn’t meet 7 requirements due to income?



Dear Kristen,

I never judge people. Thank you for reaching out to me.

Understandably, your mental health issues held you back from dealing with the debt situation at the time. It happens.

You have four primary choices you can make now, in no particular order:

  • Do Nothing
  • Settlement
  • Bankruptcy
  • Pay Them Off

Do Nothing

Not taking any action is always a choice in itself. But, on the other hand, sometimes not doing anything is the right thing to do as long as it is part of a bigger plan.

However, most of the time, not doing anything lets other people control your life, and you are just along for the ride. I think you can probably appreciate that from your experience.

But doing nothing can lead to wage garnishment or lien against a property. So let’s not let it get to that.

Settle the Debt

Settling the debt is always a possibility. However, it will depend on the individual creditor and what you can afford. They might take monthly payments or require a lumpsum amount. You won’t know until you try.

You are at a disadvantage in settling unless you talk to an experienced professional like my friend Damon Day for advice.

The creditors settle debt every day; debt settlement professionals do it regularly. So those are people who know what is realistic and reasonable to get the debt settled.

See also  My Mental Health Issues Are Keeping Me in Debt and I Can't Find My Way Out. - Greg

You have no experience doing this, so you are a babe standing in front of lions. You don’t know what a good deal is this month for a particular creditor. If you are going to think about settling your debt, get some professional advice.


An advantage of bankruptcy is it is the least expensive way out of debt. The minute you file, collection calls stop, you will be protected from wage garnishments and other nasty outcomes, your debt will be forgiven tax-free when it is discharged.

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

Bankruptcy brings you into the legal system with mostly orderly rules and procedures. Your bankruptcy attorney is your legal advocate and represents you in this process. You’ll have a knowledgeable lawyer on your side.

No matter what you do, talking to a bankruptcy attorney and getting a free consultation is a really smart thing to do.

You can find a good local bankruptcy attorney and have a free discussion about what bankruptcy would mean for you.

Pay Them Off

Suppose you had the money you’d probably have paid them anyway. I had to say it although it might feel obvious.

So What to Do?

The most crucial step here is to make sure you have the mental health situation under control first. That will allow you to create a good foundation for making better decisions about who to trust and what to do.

I need you to be engaged and use your logical power to make decisions that balance math and emotion so I can get you out of the other side of this and move ahead towards financial success.

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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