I’m Living in Las Vegas, 41, and Ready to Get Out of Debt. – Jimmy

“Dear Steve,

Hello Steve. I’ll get right to it. I’m a 41 year old single male living in Las Vegas. I earn 72K a year. I have accumulated a little over 41K in credit card debt over the past 10-15 years. I have no assets. My credit rating is fairly good – in the high 600’s. I am not, and have not, been late on any payments. I purchased my home in 2005 for $255K. There is an identical house exactly like my model down the street from me on the market right now for $91K – so you can see how upside down I am on my house. I couldn’t move even if I had to! I have two mortgages on the house (had to take out 2 when I bought the house to avoid PMI) – my 1st is 6% and the 2nd is 9%. I have no car payment. Here’s the deal – I’m able to make all my payments! The problem is I’m paying the minimum amount due on my credit cards so I have some extra money every month as I have very little saved for retirement or emergencies. I’ve attached a list of my debts that include the balances, interest rates, monthly minimums, etc. I’ve also attached my budget. When you look at my budget you might say “Gee Jimmy – you still have an extra $700/month to pay off those cards”. It doesn’t always work out that way. Emergencies and unexpected expenses always seem to dwindle it down to a few hundred dollars. I know I need to budget better to anticipate these unexpected expenses and I am working on that now, but it’s still difficult.

I have a feeling you’re going to recommend consumer credit counseling (debt management). I’m still considering this but have a few concerns. First, I was told I would have to cancel all my credit cards – which I understand. But, they said I can’t even keep one for emergencies, travel, and car rentals when a credit card is required. Second, I’ve received conflicting information as to how quickly it comes off your credit record after I’ve paid everything off. Some people say they’ve never been able to get everything off their record even after paying all the cards off. Lastly (and a big one) – my job is secure right now. If I were to lose my job I would never get a job that pays this well again. If I enter into a 3 year commitment with the CCC agency and lose my job after a year what happens? I was told if you agree to the commitment and fail to finish it – your credit is screwed and they send you right back over to the credit card companies where you’re in worse shape than when you started. While I know CCC may be my best option, do you have any other suggestions to help get me debt-free?

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I’ve used my cards very seldom over the past several years. I mainly use my debit card. I just don’t see how I’ll ever be able to pay these cards off. These debts are my responsibility. I used the credit knowing I had to pay it back. What ticks me off is they keep changing the terms (mainly the APR) which they know just keeps me in debt with them even longer – that’s what they want.

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


Dear Jimmy,

You’ve given me a lot of good information. Thanks. But before I begin we first need to talk about the house situation. Do you want to be buried under that house or would you consider handing the house back to the bank and starting over?

We could tackle the other issues but the elephant in the room is you stuck in a mortgage that may take 15 years for property values to rise again just to break even on the thing. Would you rather pay on that mortgage or save for your future and retirement?

Please post your answer in the comments section below.

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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