Ask The Get Out of Debt Experts Real Estate

Do You Think Credit Counseling Can Help? – Frank

“Dear Steve,

Enjoy, your site, been reading it a lot the last few weeks.

I have about $70, 000 in unsecured debt. Owe $22,000 on the car. House that was worth $240,000 is down to $205,000, but I owe $198,000. I got a ARM, loan about 4 yr ago, sounded to good to be true. It had a 3 yr penalty for early payoff. First year of on-line payments, system issues and it would only let you make the “mininum” payment. Before I knew it, balance of $200,000 was up to $210,000. 2nd year the min. payment jumped up to $2000. a month. However, when your net pay is about $2200 a month, doesn’t leave much. I have tapped into my 401K. Owe that $18,000.

Do you think Counseling can help or should in throw in the towel and start over.

Frank”

Dear Frank,

Credit counseling can help in certain situations but not all. You might want to first read this previous article for some insight. See The Honest and Unvarnished Truth About How to Get Out of Debt.

Right now the situation appears to be one where no matter what you do about the other debt, the mortgage payment is simply not going to fit within your income and leave you enough for your necessities.

You’ve probably been making ends meet by taping the retirement money and using the cards to get by. The reality of the situation is you are probably very negative each month.

Based on what you’ve shared it sounds like the house is simply too much of an obligation for you to handle on your income. It might be time to start thinking about selling the house or handing it back to the bank. Then you might want to think about bankruptcy to discharge your other debt and get a fresh start.

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.

READ  We Split and Now I Can't Afford the House. But I Want to Keep It. - Nick

Please post your responses and follow-up messages to me on this in the comments section below.

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.

2 Comments

  • Steve: Happy New Year.

    Frank: It sounds like you are in over your head. Steve mentioned some good options for you above. It may benefit you to find a local bankruptcy attorney and get his/her opinion on your situation. The 30-min consultations are usually free, and the attorney can provide you with a lot of insight – as to which route would be best for you.

    Good luck.

  • Steve: Happy New Year.

    Frank: It sounds like you are in over your head. Steve mentioned some good options for you above. It may benefit you to find a local bankruptcy attorney and get his/her opinion on your situation. The 30-min consultations are usually free, and the attorney can provide you with a lot of insight – as to which route would be best for you.

    Good luck.

Leave a Comment

Scroll to Top