My 74-yr-old mother has approx. $20K in unsecured debt, spread over numerous Visa/MC and store credit cards. She lives in a Seniors’ mobile home park (I purchased the structure in which she lives; it is titled in my and my husband’s Trust); her monthly space rent is <$500. I'm estimating her monthly income at approx $2K, from her retirement (she was a Fed employee) and Social Security. She has no assets to speak of. She is not a shopaholic; she lost her job at age 50, was unemployed for two years and lived off her credit cards, which snowballed out of control. We live in the San Francisco East Bay area. I am doing the research on CCS vs. DMP and any other options that you might suggest. She will not likely consider bankruptcy (she and my step-father filed in the 1970's and it devastated her); she will still want to have access to one or two credit cards, (with low limits). Do you recommend the NFCC's Debt Management Program or could you suggest another viable alternative? Our local NFCC branch offers free Credit Counseling, but charges $85 in fees for setting up a Debt Management Plan. Nancie"
Thank you so much for contacting me. It is a very interesting situation and one that surrounds emotion rather than logic.
I can understand your mother’s desire to repay her debts but at this point there is no logical reason for her to do so. Her income producing days are far behind her and the debt is now 24 years old, really?
I can understand how a repayment strategy seems attractive and a credit counseling program can be a good thing in the right situation, but this is not the right situation.
The burning question I have for the two of you is if you feel you have a greater responsibility to repair the past or the future?
Statistically your mother is nearing the end of her life. Is it your desire for her to spend the potential last few years of her life making monthly payments into a debt management program using the little income she has?
From my position as a debt coach I feel that while she had a traumatic experience with bankruptcy in the 1970s I’d like for you and your mother to go talk to a bankruptcy attorney before you do anything.
Here is what I’m thinking.
Your mother’s situation is pretty straightforward. While she could probably stop paying her debt and the creditors could not garnish her wages, it would just me better to close the door on the debt quickly to minimize collection activity and avoid intensive stress. From what you’ve described your mother would be eligible to file for a Chapter 7 bankruptcy, it would cost about $1,600 and her debt would be eliminated in a few months rather than over the next five years.
My overwhelming concern for your mother right now is that she spend, what may be, her last years of life having the best chance of enjoying it. Even criminals get paroled. Let’s free your mother from her jail of debt and let her enjoy the rest of her life.
There is an article I wrote you should read as well, “The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy.”
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
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.