I Got Divorced Three Years Ago and I’m Drowning in Debt. – Mary

“Dear Steve,

I live in North Carolina and have several payday loans that I stupidly took out. Now I can’t pay them. I know you have heard this story many times. Paramount Recovery Services is collecting for one of the payday loan companies and wants to charge me $200/month for 6 months. What can these payday loan companies do in my state to collect these loans? Take me to court – garnish my wages? Would it be better for me to declare Chapter 13 bankruptcy? I have unpaid medical bills and other financial issues from a divorce that have ruined my credit. I am 55 and need to get my financial life straightened out. What do you advise?

I bring home $1400/month. I am barely getting by at this time.
Rent – $500
Car payment $290 (current)
car Insurance $90
Utilities $250
medicines $75

This is the basic – not including food and monthly incidentals (clothing, insurance co-pays if need a doctor, personal needs, car repairs….)

I owe Paramount Recovery Services $1120 – they want $200/monthly for 6 months. I have about $5000 in unpaid medical bills. A old landlord has a judgement out against me (from 1999-2000) for $570 with interest. I had a car repossessed a year ago when I was out on medical leave from surgery – I had asked them to refiance and lower the payment which they declined to do. Their is another old payday loan basic amount $400 and a current one of $500 with interest of $140 monthly. If I pay that one off I immediately have to get another one to pay my bills.

I hope this gives you a idea of the problems. I must gain control & don’t know how. I divorced 3 years ago, my ex husband & I had a house together -(his old family home left to him by his mother)> There was a mortgage on the home -we refianced together to put home in our names) he defaulted on the payments and I found out about the auction of the home through the newspaper. He also had a car repossed that we had financed together and didn’t let me know about that one either.

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Dear Mary,

The time has come to break this downward spiral of debt. But in doing so we must also set our sites towards a better future as well. After looking over your information I don’t think there is a reasonable expectation you will be able to break free from the debt you are dragging forward with you from your marriage and past life. The best solution will be for you to click here to find a local bankruptcy attorney and discuss bankruptcy with them. You may also be eligible for free attorney service for bankruptcy, although you’d still have to pay court fees. Check this list to find a local provider and see if you qualify.

The issue really isn’t about a failure of control of the current debt. No matter how much control you might have, you can’t repay $10,000 of debt with $100. That doesn’t make you a bad person, it’s just an impossible situation that will never be resolved with better math or more control. Action is needed to break this cycle. Think about bankruptcy like a financial intervention.

But now that we’ve closed the door on the old debt, how are we going to handle issues moving forward? If at all possible it would be prudent for you to contact local social services and inquire what public benefits you may be eligible for. If any benefits are available and they can supplement your life, that would be great. You might also want to check with access to your local food bank to help cut back on food expenses as well.

The goal I’d like to see you achieve is to discharge the past debt and get yourself in a position where you can get by and still have some cash each month to save to protect you from a future financial need.


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.

Do you have a question you'd like to ask me for free? Go ahead and click here.

P.S. Please update me on your progress by 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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