I Have an Appointment With Chestnut Credit Counseling Service to Avoid Bankruptcy.

“Dear Steve,

I am in a mess for several reasons….myself, a big drop in income several years ago and because I trusted an unscrupulous mortgage broker. I will soon be losing more income when my child support stops. I am waiting on a possible loan modification. (all most a year now). I have about $45,000 in unsecured debt. I am not behind in anything but I have exhausted all savings and alot of that unsecured debt has been used to make monthly payments. I have an appointment next week with someone at Chestnut Credit Counseling Services based out of Bloomington,IL. I am hoping for a debt management program.

What are the chances I can get a DMP? Would Chapter 13 be better? I would much prefer the DMP…..thanks!”

Okay, time to take a deep breath and a step back here.

What has passed has passed and we can’t change it. My primary concern at this point is you’ve drained your savings and all it did was push the problem out into the future, rather than resolve it. It’s a common mistake people make. I wish it wasn’t.

I’m not confident that a debt management plan is going to be the best solution for you based on what you’ve shared. In a credit counseling program the monthly minimum payment is going to be just about the same as what the creditors want from you now. Since you’ve used up your savings trying to make the creditor payments, a payment in that range is neither sustainable not wise.

Additionally, entering into a debt management plan probably won’t give you the breathing room you need to get by and save money at the same time. And believe me, saving money when you are getting out of debt is important. Unless you start building your savings back up right now the next emergency you run into will be a tragedy. You won’t have credit to pay for it and no savings to use. What would you do then?

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Besides, we already know your household income is going to drop when the child support ends soon so any payment plan really isn’t sustainable at all. There is no logical reason for you to launch into a debt management plan that may be not affordable or sustainable over five years when you are making those payments.

As much as you might not want to admit or face the possibility of bankruptcy, you really must. To understand what bankruptcy would mean for you you can click here to find a local bankruptcy attorney you like. Make a free appointment to go talk to them and do it.

based on your statement you are in a mortgage you can’t afford, your child support is going to end soon and you have spent through your savings, handing the house back to the bank and bankruptcy would be the best choice to eliminate your debt and give you protection from your creditors and lawsuits for debt.


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.

Damon Day - Pro Debt Coach

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