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Robert Wrote “I Do Not Know Where To Start Other Than I Am in Debt”

“Dear Steve,

I do not know where to start other that I’m in debt. I want to pay all of my credit card debt starting with my lowest and working my way to the last but I can not accomplish this while I’m paying everyone and can not make any headway. Can I just send something to the others and concentrate on one credit till it’s paid for and move on to another?

On a good note I do own my home, so should I get a loan to pay off this cards. I could probably settle for less money that I owe but I also know that this will hurt my credit.

What do you suggest?

Thank You,


Dear Robert,

Thank you for the question.

When I read your question to me I was filled with hope. There appears to be a clear and fairly painless way out of debt for you without hurting your credit. In fact I think it will help your credit.

Since you can probably get a mortgage against your home or refinance your current mortgage to take some cash out I would suggest that you think about doing that and if you can’t take out enough to repay all your debt, then take out enough to pay, in full, your highest interest rate debts. Don’t settle them. You are right, that will hurt your credit.

Once you pay off the highest interest rate debts with the cash from the house, that will give you the breathing room you need to focus on paying off the remaining debts using the debt snowball approach.

By paying all your debts off in full, it will improve your credit report and credit score. While debt settlement can be a good and valuable tool to use to eliminate debt in some situations, it is not a magic wand for all. Debt settlement will wound your credit report and lower your credit score.

Think of that new mortgage you are going to get just like a debt consolidation loan for credit card debt. After you’ve used the debt snowball approach to pay off your other debts, focus your efforts to pay off that debt consolidation mortgage that you took out for that credit card debt. Before you know it, you’ll have that paid off early as well.

If you execute this plan, you should be just fine, it will involve little pain, and as long as you don’t rush back into debt you will have a brand new financial future.


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.

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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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