Ask The Get Out of Debt Experts Scam Articles

I Heard About a Government Program That Will Reduce Your Debt Without Hurting Your Credit. – Judy

“Dear Steve,

My partner and I started a small business in 2000 and used our credit cards for the start up and for cash flow when business was slow. At the peak of our indebtedness, we owed $103, 000 dollars in credit card debt. Now, my partner owes roughly 28k, I owe about 26k. In 2007 we decided to shift our business focus and are now making much better money, but I personally work from the minute I wake up, until I go to sleep, and since most of my work is on the phone, I am home bound. I very rarely get a day off. I am so stressed out and burned out, I just feel like I am at the brink of a breakdown.

I recently lost both of my grandparents in a house fire. And this event has caused me to really rethink the way I live. In short, I am ready to separate the chaff from the grain and spend more time doing meaningful things, like spending it with loved ones. My partner takes care of her elderly parents, and so she can’t work. I have looked into refinancing our home and cashing out
our equity to pay off the debt, but since we have a business, we don’t show much of an income (even though we gross about 92k a year as a business, once we deduct our business expenses, we only make like 18k each from the business). So, since you can’t do stated income on loans any longer, that option is out.

I am now looking into a home equity loan, but I have a feeling that, even though we would be using our home as collateral, we won’t qualify because of our low income. We have a friend who is looking to get more interest on her money than the banks offer, and she has offered to loan us the money. I am hesitant to mix friendship with money, but tough times call for tough measures and it could be a win-win for both parties. Oh, and one last thing, we both have excellent credit, in the high 700s, and, we are current on all of our bills and have been since we started using credit. So that’s our situation and those are some of the things we have simmering on the back burner.

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My question is this: is there any way to get some of the debt cleared so I don’t have to work so hard? I keep hearing about a new government plan that if you are more than 10k in debt, you can get it reduced without hurting your credit, but that sounds like a scam to me. Have you heard of this? Also, if you were in our shoes, what would you do? Thank you so much for this wonderful service you provide!


Dear Judy,

Let me address the government program first, yea, that’s a load of crap and a scam. There is no such program although there are plenty of people that try to sell you services under the guise of such programs. Here is one call I recorded of just such a sales pitch.

I completely agree with you that mixing debt and friendship is a slippery slope and for the most part does not seem to work out. What I recommend instead for people looking for a debt consolidation loan is, a person-to-person lending network that offers fixed rate unsecured debt consolidation loans.

I am concerned that any loan may put too much of a burden on you but you won’t know until you investigate the possible loan and review the proposed payment.

Based on your health condition, you may determine that with cutting back work to protect your health you are unable to afford the debt at all. In that case you should click here to find a local bankruptcy attorney and talk to them about how bankruptcy may allow you to keep your house but reduce your debt.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out 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.

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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.

1 Comment

  • Hi, I am 30 Yeras old and I have about 29K in debt. My credit score is 658. LendingClub just reported it to me. I was trying for a loan. I have never been behind on any of my credit but my balances are maxed out. I ran them up when I became unemployed in 2010 for 6 months. The 29k is not including my student loans of 19,911. I was just trying to find a bill consolidation that I can make 1 payment and not feel like im in a bind. I don’t want my credit impacted for whatever I choose. Do you have any suggetions. Thanks 🙂

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