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Which is the Best Way to Tackle Our Credit Card Debt? – Erica

“Dear Steve,

We have always had pretty good credit and always paid our bills on time.

My parents had some hard times so when we didn’t have enough we used credit to help them get out of binds.

Still we managed to pay all our bills on time. Then the economy took a dive and my husband went to 3-day work weeks. We had to drop all payments but 2 credit cards, which were the ones willing to work with us.

My husband found a 15hr/wk job to help make bills. Wanting to keep our credit in good standing we enrolled in a debt program that put us on a lower monthly plan that would help us pay the creditors one by one within 4yrs. We still struggled and had that payment lowered to better fit our budget but with no avail because we still could not make the payment. That is when we lost our car and had it repossessed as well.

My husband finally started working full time again March 2010 and we were saving everything extra we had to hopefully pay lump sums with creditors who were willing to settle personally with us only to lose his second job June 2010.

We have gotten rid of everything from car payments to cable to where all we pay are necessities and are still have little left over. I was finally able to start working this year due to my little boy going to pre-school, yet due to unforeseen health problems I am unable to do so. My husband is currently looking for a second job to help us breath a little. The plan is next year, hopefully I can work and we can use some of our tax return to help us get out of debt by debt consolidation or bankruptcy, not sure what to do. Any suggestions would be very helpful so that we can plan accordingly.

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Which is the best way to tackle our credit card debt?


Dear Erica,

It sounds like you started off on a debt settlement plan where you were sending reduced monthly payments to the debt settlement company instead of your creditors. From what you shared it sounds like that is what led to the loss of the car since payments were being sent to the settlement company instead of the car finance company.

The big problem is that the debt settlement company gave you a payment plan they thought they could sell you on, not one your creditors would accept.

Based on your current situation I think you need to drop that debt settlement approach and ask for a refund of fees paid by you but not earned by the debt settlement company. Instead you need to strongly consider bankruptcy. With bankruptcy you would have been able to keep your car but your debt would have been discharged.

I suggest you click here to find a local bankruptcy attorney as soon as possible and not send one more penny to the debt settlement company you are working with.

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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