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I’ve Consulted With Credit Counseling Agencies And They Can’t Help. – Raymond

“Dear Steve,

Most of my financial trouble is from not being responible with my finances. However I didn’t realize the severity of my situation until I had to have shoulder surgery and I wasn’t receiving a full pay check from my Employer. Now I realize I can’t continue with what I’ve been doing. My wife and I currently have $70,000 dollars of unsecured debt and it seems to be growing. $60,000 is credit card debt. My expenses per month not including my unsecured debt is about $5000 a month. This included 3 car payments, utilities, gas, food, insurance, and mortgage. My unsecured debt monthly cost is about $1300 a month. Prior to my being out of work my wife and I took home about $5500 a month and sometimes more with OT. Now with me being out of work we are only bringing in $4800 a month with no OT available because I’m not working.

Even when I’m at work, which I hope to return shortly, we still barely make it. I have consulted with credit counselling agencies and they say they can’t help us. Do you think I would qualify for chapter 7 bankruptcy or is their another alternative that you would suggest. Thanks for your help in advance.


Dear Raymond,

If you can’t afford the monthly minimum payment then credit counseling is just not going to work for you. In that case the most reasonable and logical solution is going to be bankruptcy.

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You’ve learned an important lesson and that’s that life is more fluid and dynamic than credit contracts. It sounds like you’ve discovered that you need to keep your financial obligations down to a point where you can afford to cover them with a reduction in income and never by counting on OT. In other words, don’t cut it so close.

Your situation seems to be clearly one in which you need to reduce your expenses to not only fit within your income but also give you room to save as well. Really the only way to do that is with bankruptcy.

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As far as if you’ll qualify for a Chapter 7 bankruptcy, it sounds like you may but you’ll need to talk that over with a local bankruptcy attorney to be sure.

Rather than viewing this as a cursed event, look at it instead as a life lesson learned and an opportunity to get your debt back in balance with your life. That might even involve handing back one of the cars as well in your bankruptcy if you only need two moving forward. If you are going to go bankrupt, which it sounds like you should, then maximize this opportunity to make the best use out of this difficult situation so you’ll have the best chance of financial success moving forward.

You can click here to find a local bankruptcy attorney and if you’d like a second opinion about your situation or a personal consultation by another debt coach, please feel free to contact Damon Day.

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 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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