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We’ve Been Following the Dave Ramsey Plan But It’s Not Working For Us. – Sara

“Dear Steve,

My husband lost his job last year. I also found out he was hiding some credit cards. After all was said and done I found out we were 100K in cc debt.

He now has a great job – makes 200K/ year. But we had to move to Manhattan where the cost of living/taxes are so high. We can’t make minimum payments on all the cards anymore. Also, our home (back in another state) is now in foreclosure. We owed about 480K on the home. I’m assuming our mortgage company is going to sue us for the difference. It’s all overwhelming. We’ve been trying to follow Dave Ramsey plan. That has helped us get off credit cards completely. We use cash only for the past year. But the debt is still there and it keeps us from ever having savings. We are mid 40s.

Wondering if bankruptcy is a valid option. My husband’s income is high, but cost of living is high where we live. We live paycheck to paycheck and do nothing extravagant. Can we even file bankruptcy with a high income level?


Dear Sara,

First, for specific questions regarding bankruptcy you can click here to find a local bankruptcy attorney. You may want to contact Jay Fleischman in New York City for bankruptcy advice. He’s a bankruptcy attorney. If you do contact Jay tell him I said hello. His site is

While you have done a good job struggling to work down your debt over the last year I wonder how successful the approach really was now that $100K of hidden credit card debt has come to light.

There are two issues as I see it. The first is to speak to a bankruptcy attorney about your situation. The income is only a problem when calculating the type of bankruptcy you will need to file, not if you can file bankruptcy.

Secondly, I’m more concerned over the hidden debt. I’m worried what that was spent on and if the underlying issue of hiding that debt and what it was spent on has been dealt with and resolved.

Bankruptcy is a valid option. it is a legal option and Dave Ramsey isn’t always straight with the information he delivers about bankruptcy. Read Dave Ramsey and His Un-Truth About Bankruptcy as an example. Don’t forget, Dave went bankrupt himself.

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.

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About Steve Rhode

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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