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Our Expenses are High and So We Are in Debt. What Should We Do? – Scott

“Dear Steve,

We have around $37,000 in credit card debit that is becoming unmanageable – day care is a high cost but we have no other choices for that. We don’t want to use our 401k or 403 B and have a mini van with lots of miles that will not last much longer. We’ve been looking at debt settlements and our aware of all the negatives that go with it. All our bills are paid and paid on time, nothing is past due, please offer some suggestions, thanks

What should we do?


Dear Scott,

Before we run and jump for a solution we first must address the issues that brought you to this point. No debt solution is going to repair the underlying issues.

From what you said it seems you are saying your life expenses exceeded your income and the shortfall was bridged using credit card debt to the tune of now $37,000.

What I don’t understand is how you think you would be able to participate in a debt settlement program, default on your cards, make payments into the debt settlement program and get by.

It seems in that situation a debt settlement program would exacerbate the problem rather than alleviate it. For example, before you were probably paying $750 per month on your debt. You may have even been taking cash advances from the cards to make these payments or to get by.

So you enroll in a debt settlement program and pay $5,500 in fees and your monthly payment into the debt settlement program would probably be $350ish per month.

Since the majority or your monthly payments will initially go towards your debt settlement fees, and it would take another year or so to save sufficient funds to begin settling any debt, you are only digging a deeper hole for yourself. During that time your creditors are not getting paid, you are in collections, and you have a pretty good chance of getting sued.

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During that same period you will not have access to any credit cards, they will have been closed by the creditors, and while your monthly payment has been artificially cut in half, I am at a loss to understand how you would now be able to bridge the income gap without the cards since you have already said that payments of about $750 per month leave you stretched and unmanageable.

Based on what you said the logical solution here is to click here to find a local bankruptcy attorney and go talk to them. In bankruptcy your retirement funds would be protected, you could not be sued, you’d probably have all of your debt eliminated in months and it would only cost around $1,500.

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.

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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