“Dear Steve,
My husband and I separated about 3 years ago, with that in mind we both did the most selfish thing- we spent on our credit cards. We racked up so much on our credit cards, that we did not even realize how bad we had put ourselves in debt.
Fortunately we got back together and decided to get a handle on our finances only to come to my husband getting laid off and eventually myself. We had no other choice but to turn to a credit counseling agency which required us to pay over 800 dollars a month to them. We just simply could not afford it, so we turned to a debt settling agency.
Since then, the debt settling agency has taken over 9000 of our money and have only settled 3 bills which doesn’t even amount to the money we have given them. They have told us that the money we have given them goes to attorney and negotiation fees. I do no trust them.
We have been summoned by courts and creditors have taken money out of our savings with little remouce or compassion from the company, they have basically said we are SOL. I am wondering what the best decision is from here as I need to be able to afford the monthly payments and also decrease the risk of anyone taking money from us or suring us. I do not want to declare bankruptcy. I think we can make payments towards our bills, but it needs to be affordable and it needs to reduce this legal risk of geting sued by these companies.
What should I do? I want to take myself out of this debt settling program and perhaps go to credit counseling, however, I need a monthly payment that will be affordable. I’m unsure how bankruptcy works and I need to know what my options are.
Sue”
Dear Sue,
In reading your situation and question I’m left worrying about you. I’m worried you are traveling down a bumpy path, inflicting more damage and pain to yourself, simply because you have an emotional reaction to bankruptcy.
Think about this, if you had explored bankruptcy when things first went bad you’d be totally out of debt by now, no lawsuits, no massive fees to debt relief companies, and you’d already be on the way to rebuilding your credit.
It seems an article I wrote recently fits your situation almost perfectly. Please take a few minutes and read “Are You Really Ready to Get Out of Debt? Can You Handle the Truth?”
Once you read the article you’ll understand what I’m about to tell you, you need to let your sacred cows move over to let your solution arrive.
Bankruptcy will end this situation, put it behind you without a tax liability, will stop all lawsuits, will prevent money to be taken from your account, will stop collection calls and let you start rebuilding your life right now.
If you stay on the current path you are simply trying to fix yesterday without preparing for tomorrow.
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
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Chapter 13 is perfect for you.
Your credit is already ruined a few times over. You may have been depleting retirement funds that were completely exempt in bankruptcy.
You WANT to pay some of your creditors because it is the right thing to do. You have tried two forms, and it didn’t work.
Well, chapter 13 is the perfect debt management. A 36 or 60 month repayment plan based on affordability. Creditors get some money back, the rest is wiped away at the end, and you get the protection of the court from garnishments, lawsuits, etc as long as you stay in the plan.
You will feel better knowing that you paid as mush as possible towards your debts – that is the best anyone can do.
Chapter 13 is perfect for you.
Your credit is already ruined a few times over. You may have been depleting retirement funds that were completely exempt in bankruptcy.
You WANT to pay some of your creditors because it is the right thing to do. You have tried two forms, and it didn’t work.
Well, chapter 13 is the perfect debt management. A 36 or 60 month repayment plan based on affordability. Creditors get some money back, the rest is wiped away at the end, and you get the protection of the court from garnishments, lawsuits, etc as long as you stay in the plan.
You will feel better knowing that you paid as mush as possible towards your debts – that is the best anyone can do.
I don’t understand why anyone is against bankruptcy except the debt consolidation companies who stand to make a bundle on you. There may ba a stigma to filing, for those who care what the Jone’s think about you, and some insurance companies will drop you if given the opportunity. The interest rates you’ll pay for a yr or more may be extreme, but they’ll come down. The debt you have w/out filing will only give you great stress and your credit rating is thru the gutter anyway as well as not having the ability to pay any new loans. Bankruptcy solved my money problem. I had about $100k in debt w/credit cards, and 2nd mortgage. I filed chap 13, I now pay $150 a mo. for the next 3 yrs, and all that debt is forgiven, I keep the house and in 7 yrs it off my record. Think about it….what makes more sense? Suffering stress for many yrs and possibly never getting out of debt, or just filing bankruptcy, learning how to deal with your finances and having a clean slate to work with? It’s a no-brainer to me.
I don’t understand why anyone is against bankruptcy except the debt consolidation companies who stand to make a bundle on you. There may ba a stigma to filing, for those who care what the Jone’s think about you, and some insurance companies will drop you if given the opportunity. The interest rates you’ll pay for a yr or more may be extreme, but they’ll come down. The debt you have w/out filing will only give you great stress and your credit rating is thru the gutter anyway as well as not having the ability to pay any new loans. Bankruptcy solved my money problem. I had about $100k in debt w/credit cards, and 2nd mortgage. I filed chap 13, I now pay $150 a mo. for the next 3 yrs, and all that debt is forgiven, I keep the house and in 7 yrs it off my record. Think about it….what makes more sense? Suffering stress for many yrs and possibly never getting out of debt, or just filing bankruptcy, learning how to deal with your finances and having a clean slate to work with? It’s a no-brainer to me.