I Lost Most of My Income. How Can I Get My Debts Reduced? – John

“Dear Steve,

The economic downturn really hurt me. I lost 4 of my 5 sources of income. It killed the equity in my house (it is now worth about $15K more than my remaining mortgage) and nearly wiped out my savings.

Right now, I have about $50K of credit card debt. If I pay the minimums for a year, it will cost $20K and I will barely reduce the debt. I have lost several sources of income making it improbable that I could come up with $20K this year to maintain the minimum payments. As the economy improves, my income should return putting me in a position to handle the debt. What I really need to do is find a way to ride out the downturn which would mean getting my payments reduced to about 1/3 of what they are for maybe a year and then slowly increase them as I gain more income. Is this even possible?

My FICO is somewhere in the 600s (depends on who you ask and when). I am actually current with all obligations right now.

What would be my best options for getting a my payments temporarily reduced? I could actually pay this off if the terms of the debt were something like 7% over 25 years today.


Dear John,

You might not be mentally prepared to hear this but you need to go bankrupt. There is no program that will reduce your payments, outside of a LendingClub.com loan which you probably don’t qualify for.

Please click here to find a local bankruptcy attorney and go talk to them. Bankruptcy will eliminate your debt, prevent you from being sued and allow you to move forward with your life. If you have a strong desire to repay your creditors there is nothing that prevents you from getting the protection bankruptcy offers you and repaying your creditors afterwards.

Please update me on your progress by

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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