Ask The Get Out of Debt Experts Unemployed

Is Credit Counseling Worth It? – Ross

“Dear Steve,

We have about 60K in secured and unsecured debt. Credit cards are about 40K, student loan 10K, and the rest is a timeshare loan at 10K. We also have a tax debt and will owe taxes again this year. I work on a temporary contract basis making 70K/year, but that will end later this year and there’s no guarantee that I will have work coming in after that. My spouse does some work at home, but it is only $800/month.

We’ve attempted to consildate, but keep getting dinged because of our high debt to income ration. We are currently making payments and trying to pay off debts, but it leaves us with so little to live on and I’m nervous about the potential loss of income later this year. When I was not working, we were going to look at bankruptcy, but then I got this job. I’d like to prevent dings to our credit, but we are being so squeezed we just need to find a way to get out of debt ASAP.

In addition, I’m curious if you think debt management plans or credit counseling is woth it. What do you reccomend we do to get this debt paid off. I want to do something now while I have work if possible.


Dear Ross,

Dings to your credit are the least of your worries here. If you are fairly confident you will lose your job and you can’t see any definitive replacement of that income then rather than worry about debt repayment you need to get yourself prepared for unemployment.

You can click here for credit counseling information but entering into a payment plan now would only rob you of money you could save to help you through a period of unemployment. With bankruptcy you could get your debt down to just the student loan debt and then you’d be in better shape to ride out an income outage.

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My advice would be for you to also click here to meet with a local bankruptcy attorney, make a free appointment and go talk to them about your situation. See if what they have to say makes sense to you and then from what you learned from the credit counseling group and the appointment with the bankruptcy attorney you’ll be better prepared to make an informed and educated decision about what path is best for you.


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.

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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