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I Went to LSS Financial Counseling Service And They Suggested Bankruptcy. – Peggy

“Dear Steve,

Too much credit card debit due in part to helping niece and nephew out, then excessive repairs to my home, in an effort to make the necessary repairs, I practically lived off my credit cards. Now have nearly $50,000 in credit card debt and am short almost $600.00 a month to be able to make payments. I have consulted with LSS Financial Counseling and they are unable to help me because I would need $1142.00 a month to pay off my unsecured debts and that would make me $800 short. I am presently not behind on any secured debt. My only problems are with 3 credit card companies.

After talking with LSS Financial Counseling, they have pretty much said my only solution is Chapter 13, however, I am very reluctant to do that. Do you have any other solution? I have worked with my credit card companies to get lower payments, but I’m still short on cash every month. I would like some other solution besides bankruptcy.

Peggy”


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Dear Peggy,

LSS Financial Counseling Service gave you the right advice.

From the budget they prepared for you based on your conversation with them, even without your credit card payments you have about $592 a month left over and that’s not enough to repay your debt based on what creditors will accept. But looking at how light the budget was I would estimate that you really only have $200 left over once you factor in all of your out of pocket expenses and putting a bit in savings each month.

With your debt and residual income there is no reasonable expectation you would be able to both protect your financial future by saving money for emergencies and enter into a payment plan to resolve this problem.

I think the time has come for you to click here to find a local bankruptcy attorney and go talk to them. I hear your hesitation to consider bankruptcy but without talking to a bankruptcy attorney you don’t know if you might qualify for a Chapter 7 bankruptcy. If you do then your debt problems will be behind you in a matter of months.

It might be that you feel an intense desire to repay your creditors but there is no reason you can’t seek the legal protection bankruptcy offers and then repay your creditors latter as you can.

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.

Sincerly,
Steve

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.

4 Comments

  • Peggy,

    Thank you so much for checking back in. I’m so glad I was able to help but most importantly I’m proud of you for taking action to do better moving forward.

    Many people who file, me included, sometimes initially get stuck in the “what have I done” blues. But the reality is there was no other logical choice and you made the right decision.

    The absolute best thing you can do now is learn from the experience and I invite you to stick around the site and help others in the comments with emotional support and advice to help them get through the tough times as well. In fact, please subscribe to the site feed so you can see the latest questions posted.

    Now that you’ve been through the process it is time to embark on the rebuilding strategy, click here.

    Bless you for the update. It made my day.

    Steve

  • Dear Steve — I sent you the above email in September of last year and just wanted to up-date you on what I eventually did to solve my credit problems. I took your advice (after several months of procrastination) and contacted a bankruptcy attorney in Birmingham, and after talking with her determined that Chapter 7 was my best solution, that I would not lose my house or car but would get rid of the massive credit card debt. That was the best solution and I want to thank you from the bottom of my heart for steering me in that direction. I was very reluctant to make that decision because I have always paid my debt and filing bankruptcy seemed unfair to the creditor who gave me credit, but, I got over that!!! Anyway, I have been to my Meeting of Creditors, all went well and unless something from out in left field comes up, by June I will be out of bankruptcy and beginning a new chapter in my life. I am saving money every month, making extra payments on my line of credit on my house and doing what I should have been doing years ago, staying away from credit card debt. Your website is a lifesaver and I just want people who come across you with credit problems, to know that you offer sound and valuable advice. You certainly saved my butt!

    Thank you so much, Peggy Jones

  • Dear Steve — I sent you the above email in September of last year and just wanted to up-date you on what I eventually did to solve my credit problems. I took your advice (after several months of procrastination) and contacted a bankruptcy attorney in Birmingham, and after talking with her determined that Chapter 7 was my best solution, that I would not lose my house or car but would get rid of the massive credit card debt. That was the best solution and I want to thank you from the bottom of my heart for steering me in that direction. I was very reluctant to make that decision because I have always paid my debt and filing bankruptcy seemed unfair to the creditor who gave me credit, but, I got over that!!! Anyway, I have been to my Meeting of Creditors, all went well and unless something from out in left field comes up, by June I will be out of bankruptcy and beginning a new chapter in my life. I am saving money every month, making extra payments on my line of credit on my house and doing what I should have been doing years ago, staying away from credit card debt. Your website is a lifesaver and I just want people who come across you with credit problems, to know that you offer sound and valuable advice. You certainly saved my butt!

    Thank you so much, Peggy Jones

    • Peggy,

      Thank you so much for checking back in. I’m so glad I was able to help but most importantly I’m proud of you for taking action to do better moving forward.

      Many people who file, me included, sometimes initially get stuck in the “what have I done” blues. But the reality is there was no other logical choice and you made the right decision.

      The absolute best thing you can do now is learn from the experience and I invite you to stick around the site and help others in the comments with emotional support and advice to help them get through the tough times as well. In fact, please subscribe to the site feed so you can see the latest questions posted.

      Now that you’ve been through the process it is time to embark on the rebuilding strategy, click here.

      Bless you for the update. It made my day.

      Steve

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