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My Husband and I Both Work for a Construction Company That Has No Work. – Susan

“Dear Steve,

I hope you can help me decide. My husband and I both work for a consturction company that has no work. They have not laid us off yet, but have cut our hours to 32 per week.

I have not been able to get a nights sleep for worring how we are going to keep up with the credit card payments. We have a very good credit score but I am not that concerned with that as I am trying to decide if I should go to one of the credit card services that say they will get the debt reduced and only have to pay a percentage of whats owed.

Some of the cards I have had for years and have probably paid more in interest than I have charged on them. I don’t know why I feel so bad about doing this, but I do. Also there are so many different companies and I would like to know who you think I could contact to find out if this is something I can do. Like I said I have been agonizing over this so any help you could give me would be appreciated. Currently we owe 20k plus. Thank you again.

Susan”

Dear Susan,

What you are describing, where your balance would be reduced, sounds like a debt settlement company. Based on all the research I’ve done about them I am now convinced most just over-promise what they can do and under-deliver, leaving clients credit ruined, being sued, and out thousands of dollars on fees that never resolved the overall problem.

If I look at your situation by putting you first, the most logical approach would be for you to discharge your debt with bankruptcy and that gets you loads of legal protections from creditors. Next you start saving money and rebuild your credit and hope for a better economy.

Here’s why. You should not quit to improve income right now unless you think you can find a lot better job. If the company goes under or has to lay you off you can collect unemployment. However, if one of you can get out of that company to reduce your unemployment exposure, only one at the same place, if the company fails entirely, that would be worth considering also. While I am very confident the economy will rebound in the medium-term I am not so confident in the short-term. If I was to look into my crystal ball today I’d say it makes more sense to get yourselves organized to face possible bad financial times at home.

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Realistically the best way to get yourself protected for a financial tsunami would be for you to discharge your debt and use the money that would have gone towards bills to place into savings to live on if one or both of you lost your jobs and income.

Does that seem to make sense to you?

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About the author

Steve Rhode

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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