Sixty Thousand Dollars She Did Not Need to Spend
Damon Day got off a call right before we recorded this week, and it put him in a mood I recognize because I get into it too.
A retired woman had been signed up for a debt settlement program. A thousand dollars a month, for five years. Sixty thousand dollars, with roughly twenty-odd thousand of it going to fees.
All of it coming out of her retirement account.
Here is the part that should make you sit up, and it is the reason I am writing this post instead of letting the episode stand on its own. The money she was spending was money her creditors had a very hard time reaching in the first place. She was retired. Her income and her retirement savings carried protections that unsecured creditors generally cannot get past. She was taking the safest money she had, converting it into payments, and handing it to the one category of creditor least able to come and take it.
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Nobody in that sales conversation told her that. I will explain in a moment why nobody was ever going to.
We are not naming the company, and Damon deliberately did not name it on the show either. Not to protect anyone — because the name is not the point. The structure is the point, and the structure is the same across the industry.
Nobody Selling You Debt Relief Owes You the Truth
This is the single most important thing I can tell you about that entire industry, and almost nobody says it plainly:
They have no fiduciary duty. They have no legal obligation to do what is best for you. Their only duty is to convince you to hire them.
A fiduciary is legally required to put your interests ahead of their own. Your financial advisor may be one. A debt settlement salesperson is not, and neither is the person answering the phone at a credit counseling agency. They are salespeople. That is not an insult — it is a job description, and you should hear it the way you would hear it from anyone selling anything.
Now add commission. If the fees on that retiree’s file were in the twenty-thousand range, the person selling it stood to earn some meaningful share of that. Ask yourself honestly what the odds are that this person opens the call by saying: “You are already retired, this money has to last the rest of your life, and there are options you should look at before committing to sixty thousand dollars.”
They are never going to say it. And it is worse than an omission — they will frequently argue against the option that would have helped, because they earn nothing when you take it. Fear of bankruptcy is not an accident in that conversation. It is a sales tool, and it is worth money to the person using it.
Damon’s position after two decades of this has hardened into something blunt: stop calling them. Mine is only slightly softer. I do not think everyone in that industry is a crook. I think the incentives are built so that even the honest ones cannot give you a straight answer, because a straight answer often costs them the sale.
What “Lower Interest, Same Payment” Actually Means
Two people came through my Ask Steve chat this same week being pitched a debt management plan by a nonprofit credit counseling agency. Both were being pushed hard. And in both cases the pitch had the same shape: your interest rate goes down, and your monthly payment stays about the same.
Stop and look at that for a second, because it sounds like a win and frequently is not one.
If the rate drops and the payment does not, the money has to be going somewhere. Usually it is going into a longer term, or into fees, or both. The number to ask for is not the rate and not the monthly payment. It is the total you will have paid when this is over, and how many months that takes. Get it in writing. If nobody will give you that number, you have learned something important about the offer.
I ran a credit counseling organization. I am not hostile to the concept. But “nonprofit” describes a tax status, not a promise about whose interests come first, and a debt management plan can quietly cost you years of retirement contributions you never get back.
Your “Moral Obligation” Was Already Priced In
This is the part of the show I most wanted to get in front of people, because it reframes the guilt that drives so many bad decisions.
I have been reading through SEC filings lately — it is where the honest disclosures live, because a company that will spin you in an advertisement has to tell its investors what is actually true. And one thing shows up in every consumer lender’s filing without exception.
They book an allowance for the loans they expect will not be repaid. Under current accounting rules, a lender has to estimate expected credit losses over the life of a loan and record that as a cost at the time the credit is extended. It is standard, required, and universal.
Read that again slowly. Before you ever missed a payment, before you ever got into trouble, your potential default was already estimated, budgeted for, and priced into what you were charged. It is baked into the cake. The interest rate you pay is high partly because some percentage of borrowers will not repay, and you were charged for that in advance.
The lender is not surprised. The lender is not wounded. The lender ran the math, decided the portfolio was profitable with those losses included, and lent anyway because the arithmetic worked.
So when someone tells you that you have a moral obligation to repay every dollar no matter what it costs your family or your retirement — understand that you are being asked to hold up your end of a bargain the other side already assumed you might not, and got paid for assuming.
You may still choose to repay. Plenty of people do and feel better for it, and I am not going to argue you out of your own conscience. What I object to is the guilt being used — turned into a lever by someone earning a commission on which way you jump.
The Money You Should Protect Hardest
Since this all started with a retirement account, let me be specific about why that money is different.
- Employer retirement plans — a 401(k) and similar ERISA-qualified plans are generally excluded from the bankruptcy estate entirely. The Supreme Court settled that in Patterson v. Shumate in 1992.
- IRAs — protected in bankruptcy up to a cap that adjusts every three years. As of the April 2025 adjustment it stands at $1,711,975, which is well above what most people have.
- Social Security — federal law at 42 U.S.C. § 407 makes those benefits generally unreachable by ordinary creditors.
Now hold that next to what was happening on Damon’s call. Money sitting in the most protected place available to her was being withdrawn — likely with a tax consequence on the way out — and paid to unsecured creditors who had limited ability to reach either that account or her income.
She was not solving a problem. She was moving money from a place creditors could not touch to a place they absolutely could, and paying fees for the privilege.
This is the most common expensive mistake I see, and it is almost always made by people trying hard to do the right thing. If you are considering draining retirement savings to pay unsecured debt, that decision deserves a conversation with someone who has no financial stake in your answer. Before the withdrawal, not after.
The Gap Is Usually Cash, Not Discipline
Damon went out and did gig work the night before we recorded, partly to film it for his channel. Four hours, a slow night, out of practice: $122, cashed out to his account the same night.
His normal is closer to $40 an hour when he is not stopping to shoot video. His honest framing, which I appreciate, is that he is better at it than average and you should not expect his best numbers. But the shape holds. Twenty hours a week at even a modest rate is a couple of thousand dollars a month, and it starts today rather than after you build something.
What makes this different from most “side hustle” advice is the absence of a runway. No capital, no inventory, no customers to find. A background check fee, a phone, a car, and you are working. The money is available the same night.
Two things he learned the hard way and passes on:
- The first few times will be bad. His first grocery shop took three hours and paid about $30. He is now doing comparable orders in under an hour. That gap is entirely learning which orders to accept and which to leave.
- You do not have to drive people. Food and grocery delivery generally pays better per mile than passenger rides, because you are being paid for the shopping rather than the distance, and it puts fewer miles and less wear on your car.
One of my own mottos fits here, and Damon quoted it back at me on the show: there is no sense wasting a perfectly good mistake — you might as well learn from it. The people who fail at this quit after the bad first night, having paid the tuition and collected none of the education.
But the Extra Money Is the Life Raft, Not the Plan
Here is where I want to be careful, because this is exactly where people go wrong with a windfall.
Do not take an extra two thousand a month and simply throw it at the bills. That is pouring more water into a boat with a hole in it. You still need to decide what you are doing about the debt — settle, file, restructure, pay it out — and then the extra money makes that plan work faster and more reliably.
Money without a plan gets absorbed. It vanishes into minimum payments and fees and you cannot point to what it bought you.
Long Plans Fail, and That Is a Design Problem
One more thing worth carrying away, because it applies to every option on the menu:
The longer a plan takes, the less likely it is to work.
Not because people are weak. Because a five-year plan requires an entire household to stay disciplined for five years and requires nothing to break during that time. Something always breaks. The transmission, the roof, the job, the diagnosis. A plan with no room in it for the ordinary catastrophes of life is not a conservative plan — it is a fragile one.
When you compare options, compare how long each one demands perfection from you. That is a real cost, and it never appears in the sales pitch.
While I Have You: Say No to the Extended Warranty
Damon called me genuinely offended because a store offered him a three-dollar extended protection plan on a thirty-dollar plastic elbow for the sewer hose on his trailer.
It is a small thing and it is worth two minutes, because the principle scales.
An extended warranty is priced by people who know, with considerable precision, what the repairs will cost them. They are not offering it because it is a good deal for you. They are offering it because on average, across everyone who buys it, they keep more than they pay out. That is the entire business model, and it is why the offer keeps appearing on smaller and smaller items — every yes is nearly pure margin.
Then add the friction. Claims are frequently designed to be tedious enough that you give up. You need the receipt, which you did not keep, and which may well have faded to a blank strip of thermal paper anyway.
Say no, and self-insure. If it worries you, put that same amount into savings instead. At the end of a year, count how often you actually had to reach into it. Almost everyone ends up ahead, and you keep the money you did not spend.
The same logic applies to the rebate you have to mail in and the credit that arrives in six weeks if you complete four steps correctly. Those offers are priced on the assumption that most people never finish. Do not be the intended customer.
What I Would Do This Week
1. Before you touch retirement money, get a second opinion from someone who is not selling
Anyone whose pay depends on your decision cannot give you a clean answer about it. That is not a character judgment, it is arithmetic.
2. Ask any program for the total, in writing
Total paid and total months. Not the interest rate, not the monthly payment. If they will not put it in writing, you have your answer.
3. Ask what happens if you do nothing
Sometimes it is bad. Sometimes — particularly if your income and assets are protected — it is much less bad than the program being sold to you. You cannot compare options if the do-nothing baseline was never on the table.
4. Separate the money problem from the debt problem
Raising more cash and deciding what to do about the debt are two different jobs. Do both. Doing only the first is how people work extra hours for years and end up no further ahead.
One Last Thing
Nothing here says the answer is bankruptcy, or settlement, or anything else. I do not know your numbers.
What I am telling you is that the people most eager to advise you are the ones with money riding on your answer, and that the guilt they lean on was priced into your loan before you ever signed it. Make the decision with the full menu in front of you, including the options nobody profits from recommending.
If this touches your situation, my article on whether you are automatically responsible for a spouse’s debt answers a question I get constantly, and the answer surprises most people.
Damon Day and I release a new episode weekly, and you can reach him at damonday.com. If you want to think out loud with somebody who is not selling you anything, ask me. It is free, it is private, and I sell nothing.
If you know someone about to sign up for a five-year program, send them this before they sign, not after.
This is my input, not instruction. Your situation has details I cannot see from here, and a decision this size deserves someone looking at your actual numbers.
Dealing With Debt? Understanding your options is the first step. See how all your debt relief options compare — including ones most sites won’t tell you about. The Find Your Path quiz gives a recommendation based on your actual numbers, and the Scam-O-Meter checks any company’s complaint history before you sign. Federal Reserve Bank of New York research shows bankruptcy filers recover faster than those who don’t file.
Free Tool — Contract Decoder: Have a contract from a debt relief company? The free Contract Decoder analyzes it for red flags, hidden fees, and problematic terms — before you sign anything. Decode My Contract →
Key Takeaways
- A debt relief or credit counseling salesperson has no fiduciary duty. They are not required to act in your interest — their job is to get you to hire them.
- They do not merely leave bankruptcy off the menu. They frequently argue against it, because they earn nothing when you choose it.
- Retirement savings are the worst money to spend on unsecured debt. ERISA plans are generally excluded from the bankruptcy estate, IRAs are protected to a cap, and Social Security is protected by federal law.
- Your possible default was priced in before you borrowed. Lenders are required to book an allowance for expected credit losses at the time credit is extended.
- "Lower interest, same payment" usually means a longer term or higher fees. Ask for total paid and total months, in writing.
- Gig work is the fastest legal route to cash — no capital, no runway, money the same night. Expect the first few attempts to go badly while you learn which orders pay.
- Extra income is the life raft, not the plan. Decide what you are doing about the debt first, then let the money make that plan work faster.
- The longer a plan runs, the more likely it fails — it demands household discipline and requires that nothing breaks. Something always breaks.
Full Transcript
Click to expand transcript
Full transcript of the July 25, 2026 episode with Steve Rhode and Damon Day. Lightly cleaned for readability; the substance is unchanged.
Opening: SEC Filings Are Where the Truth Is Buried
Hey, you're back with the old and the new Get Out of Debt Guy. Here, I put them together that time for you, Damon. Sweet. Yeah, one's the Get Out of Debt Guy, one's the other guy, and I'm the other guy. I'm the guy.
We have established that last week. Yes. I'm Steve Rhode. Technically, it was this. The other guy, the original Get Out of Debt Guy, and with me as always is Damon Day.
You can find Damon at damonday.com for all your debt chitty chat needs. Chitty chat. So this is the ultimate show without a plan, because we just—not only are we late for Thursday, but it's late in the day on Friday, and my brain's about ready to check out. But I wanted to tell you this week, Damon, I started a new series of posts on the site. Now, like, I don't have enough boring stuff to read, now I'm going through SEC filings because it's always where the golden nuggets are buried, where the financial services companies have to disclose to investors what their liabilities and risks are.
Like, for example, I love it when Navient tells everybody that their private student loans are not dischargeable in bankruptcy, and SoFi says, Wait, wait, wait. But then they go on to tell the investors, Yeah, the loans, they're dischargeable in bankruptcy. So that's where the golden nuggets are buried. But so I was reading an SEC filing by Synchrony. Synchrony, yes.
Synchrony Bank. But real quick, before you get into that, good luck. The hardest part is going to be finding, even if they are potentially dischargeable, you got to find a freaking attorney that's willing to take it on. And there's some out there, but they're few and far between. Yeah, and the sad part about it is that, what is the latest number?
It's like 89 or 93 percent of those student loans where people actually push them through an adversary proceeding to be discharged are discharged. The hardest part is finding an attorney who understands all of that and is willing to take it on. But, so Synchrony Bank, in their SEC filing, you know,
Lenders Already Budget for Your Default
we always say that lenders account for some percentage of their loans as people aren't going to be able to pay it back. Well, Synchrony Bank, in their SEC filing, said, Yeah, we already count the 10 percent of the credit that we extend is not going to be paid back because people aren't going to be able to do it. Yeah, but if they're making 30 percent on the other 90 percent. Oh, yeah, yeah, yeah. They're still coming out ahead.
Yeah, but, you know, so if they've already—it comes back, I read it and in my mind I heard that old argument that we always talk about, the moral obligation. So if they've already said that 10 cents out of every dollar, that's not going to be repaid. It's already baked into the cake. Exactly. Yeah.
And not only that, it's even better for them because how often does somebody get a loan or a credit card and they just never pay it, right? They're usually paying for a while. So it's when they say, Oh, we have, you know, 10 percent default. Yeah, but there might be people that, you know, have been paying for a couple of years and then defaulted, so they didn't default on the whole thing. Oh, and their profit was still in the billions.
Last I seen every, you know, I travel all over the country for baseball and softball, Steve, as you know. And this year we did more flying than normal, but normally we take the trailer, so I drive through all these cities all over the country. The banks are always the biggest buildings. Yeah, that's right. You know, you want to know where a bank is?
Look for the tall buildings. That's where the banks are. Yeah, they're everywhere. Yeah, they're not hurting. And, you know, if you end up having to default on a credit card, Chase is going to be just fine without your money.
That's right. Pretty sure. They said, yeah, their interest and fees on loans increased $52 million in the last quarter to $5.4 billion. So the other thing that was interesting was they said that basically, I'm going to paraphrase it, but damn, we're all excited the CFPB eliminated that $8 late fee rule. Dude, it's the dog and pony show.
It's a whole thing. I know I'm getting old. Pretty soon I'm going to be the old Get Out of Debt guy because I'm getting so old that I'm cynical in everything. I know. But I'm right.
I know. You know, it's like, is it a conspiracy theory if it's true? I know.
Who Says Crime Doesn't Pay
It's hard to get all wound up when people go, you know, my lender just, or the debt relief company just screwed me over. Yeah, I mean, yeah, I know. That's the way it goes. You know, we've been covering this stuff for so many dang years, a couple of decades now, right? And we always, like every time you have a, oh yeah, so-and-so got shut down by the FTC or the CFPB, and there's a debt relief scam or this or that and the other thing or this bank.
It's always a scam. Always got away with millions of dollars, millions and millions and millions of dollars. And then, you know, they went after them and they caught them, and they, you know, had to pay a fine, but then it was dramatically reduced based on their inability to pay. They hit all the money. And so, yeah.
And then they don't go to jail. And so they just like, Oh, sorry, my bad. And then they, who knows what they do, you know, take the money and go or start something else up under a different corporation, different name, whatever. They do it all the time. And after a while, you start going, Who says crime doesn't pay?
Because clearly it does. All these guys, again, just make millions of dollars, get sued, Oh, that sucks. Oh, woe is me. I'm super poor. I, you know, I blew it all on a three-day cocaine bender or whatever the hell, right?
And then they have to pay a couple hundred thousand dollars or whatever it is. That's all they can afford. And then they go do something else. And it's like, so what's the disincentive for these guys to just rip people off and just take all this money? There's never any, like, actual consequence other than maybe they're a little bit embarrassed in their social circle now because they're going through a— And of course they're not even embarrassed about that, because the other people that are doing it with them, they're like high-fiving each other.
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The Retiree Sold a $60,000 Program
Dude, and I actually just got off the phone with a listener. She's probably listening to this podcast, so I'm not going to give out, you know, any details or any names or anything like that. But I just got off the phone with her, and it's one of these debt relief programs, and we don't say the name and we don't need to say the name because it doesn't matter the name. They all do the same. Bullshit.
Right. And, yeah, they convinced her, you know, because, you know, she's, you know, burning through her retirement right now trying to resolve the debt, trying to do the right thing, like so many of us are, what, you know, quote unquote, the right thing is. Whatever, yeah. And, yeah, this debt relief group got a hold of her, and she's retired right now. She protected retirement income, and they got her, you know, signed up for this program to settle her debt and pay a thousand dollars a month.
Yeah. And again, I'm not going to get into specifics, but they're a thousand bucks a month for five freaking years in a situation where she doesn't need to be doing that. And it's just, it's all the time. It's just, this is why I get so cynical with this stuff, because it's like, you know, I used to try to toe the line and be like, well, yeah, call a debt settlement company, talk to them and see. No, fuck that.
Stop calling them. They just, they suck. They all suck. I'm at that point now where I'm just like, no, they suck. You don't want to be the guy yelling at the TV, but I understand.
Get off my lawn! But after 20 years of them doing the same stuff to people over and over and over, and it all comes down to, and I'm not saying the individual that you're talking to is a bad person, because maybe they are, but probably they're not. They're probably just doing their job. Either inexperienced or ill-informed. Because, yeah, they're ignorant about it.
Yeah, we've talked to so many debt settlement or debt relief salespeople over the years that have come in hot and heavy and pissed off, like, You don't know what you're talking about. Now, actually, you weren't told the truth. Yeah. Yeah. And it's just, it's at that point, and the problem is, you know, this is the perfect example in this situation.
Commissions, and Why They Argue Against Bankruptcy
The salesperson is there to make a commission. In this case, it was probably, I don't know, the fees for this client were going to be about twenty-some-odd thousand dollars, ridiculous amount of money, all coming from her retirement account, by the way, that she didn't have and that she didn't need to pay and would have been protected. And so I don't know what that salesperson's commission is going to be. I don't know the ins and outs, maybe at four thousand bucks, five thousand bucks, I don't know, six thousand bucks. Yeah, but like last week we talked about— That's a huge incentive.
Last week we talked about a salesperson that was scrambling to meet their quota so they didn't get fired. They didn't care what they were doing. Yeah. Yeah, but so even if they did, it was like, you know, do you think that person is going to, you know, go through—that salesperson is going to be like, you know what, based on your situation, you're already retired, you know, this money that you do have is going to have to last the rest of your life. There's some other options that you should look at before you commit yourself to this, what is essentially sixty thousand dollars over the next five years.
You should look at some other options. They're never going to say that. In fact, they're going to do worse than not mention it. They're going to actively argue against a strategy like a bankruptcy. Yeah, because they don't make any money when you file bankruptcy.
Well, but they might—that guy might make five thousand dollars if he can play your fears up on bankruptcy and convince you that, yeah, it's horrible, it's the devil, yeah, I got to do this, it sounds good. And it's like they ruin people's lives every day. Did you mention what kind of company that was? What kind of company? Yeah, what kind of debt relief company.
I said it was a debt settlement company. Okay, so I didn't want to out you if you hadn't said that. But
Credit Counseling Sells a Different Widget
so on the AI Steve chat on the website, there were two people this week that came in and said they were being pitched a debt management program from a nonprofit credit counselor. And they were being sold hard on this thing. But the only problem was, while their interest rate was going to be cut, their payment was going to be just about the same. Yeah. And I mean, but debt management companies do the same thing.
Oh, we're credit counselors. And that always made me laugh. There's no counseling. But they do the same thing. They sell a different widget.
The credit counseling program is different than the debt settlement program. And I'm doing air quotes because debt settlement doesn't have a program. That's just a work of fiction. At least credit counseling has a program, kind of, and there's some agreements in place. Yeah.
But at the end of the day, they're still there. Their job is not to counsel you on what to do. Their job is to convince you that all other options suck, and their option is the optimal option. Yeah, you need to buy our widget. Better than everything else.
Yeah. So anyway, when Steve came on and said the ultimate, you know, show without a plan, what he meant by that was I called him up right before we were doing this show because I've been on calls all day. Because, you know, one of us has to actually help people. Steve just reads SEC filings and kicks back, has AI do all the heavy lifting for him. But yeah, he earned it.
He put in his dues back in the day. So I called him up and I was like, Oh, I had this idea of what I wanted to talk about, but I can't remember. And he goes, Who cares? Let's just do the call. We'll figure it out.
And I'm racking my brain. I'm like, I had a really good idea, but that whole debt relief thing, I know we hammer it all the time. This is why I was a good search and rescue pilot, because it didn't matter what kind of emergency I had in the air, we're going to figure it out. Well, but I just get hammered with this. I mean, most people, by the time they find our podcast, it's because they are about to enroll in a debt relief program or have signed up in a debt relief program and then start looking into it a little bit more and then go, What the hell?
Like that. And then they're like, Maybe I shouldn't be doing this. And then they start Googling things, and then our podcast or your website might come up or something, and then they listen to a couple episodes and they go, Oh, shit, man, I definitely probably shouldn't be doing this. I should talk to these guys. And then that's how they find me.
Yeah, so that's, that's, you know, you're kind of like, what's the word I'm looking for? You're like a product of what you're involved in every day. So it's like I'm seeing this stuff every day and why I get so worked up about it, because it's every day I'm talking to people and it's like, oh, this person's getting screwed by this company or that. And it's just, it sets me off. But I'm really, I'm at that point where it's like, don't even call them anymore.
I mean, I'm not saying that they're all horrible, but they're all not good. They're not all scams, but they're all not good. And they're not good for the simple fact that they're not there to be good. They're there to convince you to hire them.
They Have No Fiduciary Duty
They don't have a fiduciary duty. They don't have any legal duty to do what's best for you. Their only duty is to duty on you. Their duty, their only duty is duty. Their duty, duty on you.
But— Go. What? We don't have a red light. Don't talk. He's talking.
I forgot. It's the theme of today's show. Well, I remembered something. Oh, did you remember something? We suck, Steve.
It's like we've never done this before. You think after, like, how many years we've been doing this actual podcast? Can you hear me now? So it's been over 10 years, hasn't it? We've been doing this podcast longer than 10 years for sure, right?
Yeah. So after 10 years, we still can't figure it out. Here's the problem. I know what I was going to say was I've been doing this so long and chasing and investigating companies and digging into whatever the truth is, I have seen so much stuff on the other side, like— The debt relief company where the president of the company was having his drugs delivered at work and doing cocaine, and they threw a party at work and hired a stripper midget to come in. You think I'm making up this stuff?
Or the company president that was packing money in a suitcase and then taking it overseas to hide it. I mean, that's what I was talking about earlier. That's how they get away with this crap. Like, Oh, I'm destitute. I don't have any money.
Don't dig up the begonias. I mean, they'll take their luxury sports car and their watch and stuff, but there's no record of where the crypto is. Yeah. Yeah. No, so I—this wasn't the other thing I remember, but this was the one thing I wanted to bring up today because we've talked about it before, but not lately.
And Steve doesn't even know this, but
Damon Goes Back Out for Gig Work
Steve, last night I actually went out and did some gig work for the first time in several months. I don't know how long it's been. Did you remember how to do it? Dude, yes and no. I have all the raw footage.
There may or may not be a video on my YouTube channel, but given my track record, don't hold your breath. I try to get those videos out. That was the reason why I went and did it, because, man, I haven't put a video out on my YouTube channel at Penny Stupid. Just go to YouTube and you can Google—just put in Penny Stupid, and our YouTube channel will come up, that's Steve and I do, where we talk about side hustles and things like that. Or you can see the video where Damon talks about the narcoleptic sex phone worker.
Yeah, that was an Uber ride I did a couple years ago. Spoiler alert: she did not fall asleep in the back of my car. She did fall asleep on the phone. Yeah, not when I was calling her. Right.
No. So, but no, the other night I got done with my calls, it was like five o'clock, and I was like, I haven't gone out and, you know, I've been traveling and all this kind of stuff. I was like, I haven't done a video on my channel for like five months, so I'll go do it and film it. And, you know, I went out and, yeah, it felt a little—I've been out of practice. You know, I accepted like an Instacart shop, and it took longer than it used to take because I'm out of practice.
But it still, I mean, it wasn't a great night. It was a slow night, but I was gone—I went out four hours and I made $122. And for me, that's not a great night if I was going to go drive. I usually make about 40 bucks an hour, but it was like, I don't know, 27 bucks, 28 bucks. I didn't add it up specifically, but it just reminded me back to, like, this was so easy to do.
I did some Instacart, did some Spark, I did one DoorDash, one Uber Eats. I didn't, no people delivery, just food delivery and groceries. I don't really do people delivery that much anymore because you have to wash the car, you know, that sucks. But honestly, I just, you can make more per hour usually with food delivery. But I went out there and it's just like, you know, I went out for four hours after the normal day, had a slow day, and I still made 120 bucks.
Why Gig Work Is the Fastest Money
And I know I talk about this gig work stuff, and people are like, Oh, I'm not going to do DoorDash. I'm not going to do this. But find a way to make extra money. And I know that's like, Oh yeah, no shit, you know, Sherlock. But what I love about those gig apps is they're so easy to do.
And unlike starting a little side hustle business, if you're already in debt and you don't have the capital, a lot of businesses either take capital or they take time. Or they take both. You do one of these delivery apps, you're in business today. Yeah, I went out there, I come home, I have $122. I could literally take that one, like right there in that moment when I pull in the garage, I can go to each of those apps and I can cash them out.
And that money is in my account instantly. Like literally, if you have a bill due tomorrow, you can go out and drive, you make your hundred bucks, 150 bucks, whatever, money is in your account that night. Like it's instant money. And it might not seem like a lot, but it was so easy to do. And, you know, if you go out there a couple hours after work, maybe some on the weekends, and you just make a goal, I'm going to drive until I make 50 bucks.
I'm going to drive until I make 100 bucks. You go out there 100 bucks a couple hours a night, Monday through Friday, or make some up on the weekends, about 20 hours a week, whatever, that's still $2,000 a month. And if you're listening to this, you probably have debt. If I said, Hey, how would you like an extra $2,000? You could do a lot with $2,000 a month.
You can pay off a lot of debt. You could raise that money to settle the debt. You could use that money to do your Dave Ramsey snowball, whatever you wanted to do. But so many people, there's, I don't want to do that. I don't want to drive.
I don't want to do that. I thought the same thing for years. And then I finally was like, Damn it, I'm a financial consultant. I got to advise people. Is there anything to this stuff?
You know, maybe you can make money. And you can make some freaking money. And it's just part-time stuff. So anyway, go to the YouTube channel, Penny Stupid. Check it out.
I do some ride-along videos. We talk about different things, different ways to make money. But you could very easily make an extra thousand, two thousand bucks a month instantly just by signing up on these stupid apps that you think are beneath you. But, I mean, I actually like going out and doing it because it gets me out of the house. Dude, it was like 114 degrees yesterday when I was doing it.
Yeah, but it's dry heat. Yeah, but that's why I go back to, I love having the Tesla because I just leave the AC on in the Tesla when I'm in the store shopping and stuff like that. So I'm only in the 114 from when I'm walking from my car to the store or my car to the front porch or whatever, dropping the groceries off. So most of the time I'm just sitting in a 63-degree car. Not a big deal.
Well, but here's the difference is that when you started that, that was right around the same time where my assignment in this testing the side hustle thing was start selling on Amazon. And I don't know how many years it's been now, but I'm still doing it. You started in 2023. Okay, so three years. Three years.
I'm still doing it. The Amazon business is going great. But the difference is you were made for the whole side hustle thing. I was probably built for the Amazon thing. But in either regard, there is lots of opportunity out there for you.
But the initial slog sucks. Like just figuring out what to do on the delivery apps or which one to sign up or when do I do it or what kind of job should I do? All that stuff. You just gotta just persevere and power your way through it. There was a contractor that told me a story about this high school kid that was desperate to make some extra money.
It's hard for high school kids to get summer jobs these days because all the old farts are taking them. Well, dude, I had a paper route in third grade. Now kids can't get paper routes anymore. It only goes to adults with cars. I had a bike repair shop when I was 14.
But so this kid shows up. He's getting paid 20 or 25 dollars under the table to work for this contractor, and the contractor hands him a shovel, and the kid says, I don't do shovels, hands it back and walks off. I mean, I don't care what you're doing, at what age, when you start something new, you're just gonna have to slog through it and figure it out. Yeah. Yeah.
Well, I know a lot of people shy away from, they think Uber and I don't want strangers, I don't want this, I don't want that. Then don't do that. If you give it a chance, though, if you give this gig work a chance, what's awesome about it, especially if you're just trying to get some extra—you can't make a full-time living, I mean, you can try. I've had months where I've made five or six thousand dollars part-time, but I'm better than the average bear, so don't expect to do that. But if you're in debt, you just need some extra money.
What's great about it is you can work it completely around whatever your obligations are in life, work, family, whatever. You can just turn these apps on and turn them off whenever. Once you get them set up and you kind of learn how they work, which is what Steve was talking about, you gotta kind of slog through at the beginning, figure it out, you know, kiss the frogs, basically. You know, learn that taking five-dollar orders are probably not a good idea because you don't really make much money. But you gotta learn that.
You gotta take them, and then you gotta go, Huh. I didn't like that very much. I spent, you know, 30 minutes and I made $5. I don't think I'm going to do that again. And then that's how you learn, and you learn how to find the good orders.
But you can work these things throughout your day where I have plenty of times I'll call Steve, I'll be talking to him, like, Oh, I had to shoot down to Walmart to grab something, you know, for the house or whatever. Flipped on my app and got a $30 delivery at the Walmart while I was going there anyway. Yeah. And then I was like, Okay, I'm in here anyway. Okay, I'll grab these groceries, boom, drop them off and then go home.
I was going to Walmart anyway. I remember one time you called me and said, I'm at Walmart, turned my app on, and somebody needs a TV delivered like a mile away. Yeah. And I got like 50 bucks for grabbing a TV, throwing it in my car, driving it a mile away, which was right by my house, giving it to them, and drove home. Now, is that going to happen every day?
No, but that's what I'm saying. You know, this is not a full-time job, but you can work this kind of stuff. And trust me, if I can do it, you can do it. You don't have to be like, Oh, that's beneath me or whatever. You know, in most places, every city is different, but in most places, a little bit of effort and not a lot of time, and you can make an extra $2,000 a month to help you get ahead or help you get through a rough patch or overtime is not, you know, coming through as much as it did or whatever.
Go to my channel. I kind of explain how to do all this stuff, how to get signed up in these apps. And it's just, I don't know, we haven't talked about it in a while because I haven't had time to do it, but just going out last night and coming home, I'm like, You know what? I just made $120, and it was a slow night. Normally I usually make about $40 an hour, like I said, so that was definitely less than I normally make.
But I didn't stack a single order. I wasn't trying to hustle. You know, when I'm shooting the footage for the videos, it's like it slows me down anyway, but— So I was just kind of cruising, you know, one thing at a time, and I was never sitting, and it was easy. And it was like, I spent 120 bucks. If you got a credit card bill due, boom, you go out and you drive.
I mean, that's like three grand a month. Yeah, if you've got a couple, you're married, maybe one of you works, the other one doesn't, perfect for the stay-at-home spouse, where it's like, you know, one spouse is at work all day, the kids go to school. Stay-at-home spouse might have four or five hours, no kids in the house, and could go out and do some grocery delivery and, like, make it simple. Okay, I'm just going to drive till I make 100 bucks, I'm going to come home. Yeah, you do that five days a week, and that's two grand.
Pam and I got an Uber ride once from a hotel by a woman. She picked us up in her Jeep Cherokee, and the back was all filled with grocery bags. And she goes, Yeah, I was at the grocery store. This popped up. It's on my way home, so I'm picking you up.
Pick us up, drop us off. And I know everybody's knee-jerk reaction: I don't want strangers in my car. I don't want to pick up people. I'm a female. It's too dangerous.
And I totally get that, but you don't have to drive people. You know, I drive people very— I started off only driving people because I enjoyed it, like talking to them, like meeting them, like an experiment. It's not just because of that. It was also because in the beginning you said, There is no fucking way I'm doing any shopping. Well, yeah, but that's the same thing as saying, I enjoyed people.
I enjoyed people more than shopping. But it flipped. It flip-flopped. I got the reverse Uno card, and finally you convinced me. It's like, you're doing this YouTube experiment.
You have to try the other stuff. And you hated the first couple times you tried it. Oh, I totally hated it. The first time I went in to an Instacart order, it was like, it paid me like 30 dollars. No, it took three hours.
When I made $30, and I even had my wife there with me helping me, because I was like, Babe, you're better at stores than I am. Can you come help me? She left before we were done. She drove separately, and she had to go pick up the kids. I mean, it was such a disaster.
But if I would have went, F this, this sucks, that would have been— Kathy's never done it with me again. She's like, That is the stupidest thing. She's never done it again, because she's like, This is ridiculous. Go get a job at McDonald's. But I learned, right?
I learned, okay, why did I only make $30, and why did it take me so long? And then I figured it out. Okay, well now I just went last night and I did a $37 Instacart that only took me an hour, and that was actually longer than it should have taken me because I was out of practice, but it only took me an hour. And normally if I was doing this more often, that probably would have taken me like 45 minutes. But I learned.
I learned what are good orders and what are not good orders. You also learned things like Walmart Spark, because the Walmart app is perfect. It tells you what row and shelf number and everything else. You don't have to go look. Yeah, I also did a Walmart shop last night.
It paid $27, and it was like 22 items, and it took me 30 minutes. And the delivery was only three miles from my actual house, and it was the end of the night. The last thing I was going to do put me up over $100, which was what I wanted to do for the video that I was doing. The whole point of the video was, Can I go make $100? And so I took it and got the stuff, dropped it off, and went home.
It was 28 bucks, you know? And it's like, it's so much easier than picking somebody up for Uber or something like that. So it went from, I don't ever want to do the shopping, to I figured it out, and then I figured out I can make more money per hour if I was going to shop in stores and less wear and tear, less expense on my car. So you can make more money per hour and more money per mile, because that delivery might only be going four miles from the store, but I'm not getting paid necessarily for the four miles like you would with Uber delivering to a person. You're getting paid for the fact that you're getting— Thirty items at the grocery store.
It's not costing me any money. My car is sitting in the parking lot. It's not burning up miles. Burning—well, my car doesn't burn through gas, but you get, you know what I mean, burning through the expense. So I figured out I can make twice as much per mile doing food and grocery delivery than I could people delivery.
So then I got to the point where I'm like, well, if I'm trying to maximize my earnings, if I go out, why would I pick up people? Right. So, you know, so if you don't like driving people, you don't have to. Burritos don't talk back, and they let you listen to whatever you want. In fact, you can listen to our podcast every week delivering burritos.
They don't care. And they don't leave cheek juice on the back seat. Cheek juice. I have had some cheek— Well, one of the first times I remember you went out, you had to set off a stink bomb or something in the— Oh, we did a video that got like over 20,000 views where it's just, yeah, I had to stop and go to Walmart and get one of those Raid—not Raid, but, you know, those cans that just, like, bombs the car and just, like—yeah, and you just, like, shut—you know, turn it on and it's like, like shooting out, and you shut all the doors and you leave it for like 20 minutes. Yeah, it was bad.
But, yeah. Doesn't happen with food. No, it doesn't. But like I said, if you're curious about it, you can make some money. You can get yourself out of debt.
I'm not saying you have to go be a delivery driver, but it's one of the fastest ways to instant money. You don't have to—I think you got to invest like 20 bucks or 25 bucks to pay for the background check. But after you're approved, you got your phone, you got your car, you have an hour, go make 20 bucks, go make 30 bucks, right? And it doesn't seem like a lot, but it all adds up.
Learning Which Orders Are Worth Taking
Well, and as I said, you know, the first couple assignments— A handful of assignments are going to really suck, but one of my life mottos is, there's no sense wasting a perfectly good mistake. So you might as well learn from it. And go watch the videos on Penny Stupid because, trust me, my first experience was less than stellar. Steve, do you remember what my very first Lyft ride was? It was when you showed up with the cops.
The cops were there, yeah. And I stopped five houses down, saw the flashing lights. I'm counting houses, like, that's where I'm supposed to pick this person up. I sat there contemplating life choices in that moment, and I had to make a decision. Do I carry through with this experiment, because it's what it was for the YouTube channel, or do I say, F it, I'm out.
This is dumb. And for all of you that could maybe enjoy the videos in the future, I persevered. Yeah. Why can I say that word? Persevered.
Persevered. Got it. Persevered for you. I swallowed whatever I had to swallow and drove up to the cop and was like, I'm here for my ride. I'm the Lyft guy.
Do I need to be worried? Yeah. And whoa, what an interesting ride it was. But that was my very first experience. I persevered, and that first month I ended up making over $6,000 driving Lyft, and I went, This is a viable way to make money on the side if you need to make some extra money.
Not a full time. Don't try to do it full time. It's not going to work out well. Yeah, you're going to ruin it. But you got some spare time, you can maximize your per-hour returns, and you can make a couple thousand dollars a month fairly easily in most areas of the country.
If you live out in the boondocks, it's going to be a lot more difficult, but it is.
The Extra Money Is a Life Raft, Not a Plan
Now, the worst part is, you know, don't take that extra couple thousand dollars a month. And then just, like, throw it at your bills. Two separate things. You need a plan on how you're going to deal with your debt, and that's why you contact Damon. And then the second thing is the two grand is your life raft.
It's not, you know, more money you pour in a boat with a hole in it. Yeah, you still need to have a plan to get rid of the debt. The extra money just allows us to accelerate that plan and make it work faster, right, and make it more likely it's going to succeed. I cannot speak today. Maybe because we're doing this in the afternoon after I've done all my calls and I'm exhausted like you, versus we normally do this in the morning when my lips are working, apparently, right?
But no, you have to have, no matter what you do, you have to have a plan. And what we've learned over the years is the longer a plan takes to get executed, the less likely it is to work, right? The longer you have to be disciplined, the less likely it is to work. So doing this five-year Dave Ramsey program, not saying it can't work, but having to keep your entire family disciplined for five years, it's not that easy. No, and hope that nothing breaks.
Yeah, because everything always breaks.
The Extended Warranty Rant
So I have a little rant. You actually brought it up earlier this week, which is about the extended warranties. You know, everybody's always asking you— I'm calling about your used car warranty. No, you know, whenever you buy something online or even at the store these days, they always ask you— Yeah, I bought that shitter elbow. Do you want to get the warranty, the extra warranty on this item?
And it's like you're checking out on Amazon, you're buying a USB cable. Do you want the warranty? No. Now, let me be frank here. Always no.
Yeah, always, always no. The only way that warranties make any sense— Is the company that is warranting that thing, or insuring it, whatever you want to call it, knows—warranty, yeah—knows that whatever they're charging you for that is going to be more than the actual cost that's going to be repaired. If you, instead of saying yes to any one of those things, like you buy a TV on Amazon or something, and they ask you, Do you want the extended warranty, the extra protection? Say no. Now, say no, and if you're worried about that kind of stuff, just put that amount of money into a savings account.
And I guarantee you that at the end of a year, if you looked at how often you had to dip into that savings account, you're going to end up with a whole lot more money than if you had said yes to those extended warranties. Yeah. Well, yeah, it came up when I was traveling. I had to buy—I forgot my sewer accessories, you know, for the stinky slinky on the trailer when you got to dump the poo, right? The doo-doo.
Well, that's us in the know, us RVers, that's what we call it, the stinky slinky. So I had the stinky slinky in a tube underneath the trailer, but what I did not have is the connections for it because I was an idiot when we packed up and left for some reason. I did not have— You didn't have the affluent elbow for the stinky slinky? Yeah, I did not have— So the connection that goes into the ground. So my only, I had two options: go buy one or fire hose that thing and just try to aim for the hole in the ground manually, right?
I decided I'm not a fire hose type of guy when it comes—the stakes were too high on that one, right? I'm not Cousin Eddie. So I went to Walmart and I had to get this basically a plastic elbow that connects to the Stinky Slinky and then goes into the ground. A, I was pissed off because they only had a fancy one with an air lock that I didn't need, and it was $30. Shame on me for leaving the stuff at home.
So I get the thing, I go to check out. That's all. That's the only thing I bought. It's 30 bucks. I go to check out, and Walmart's like, Plastic elbow for my shitter.
Do you want the $2.99 extended protection for two years? And I just like, Are you serious? Like, I'm used to getting that crap for electronics and stuff like that. I always say no, of course, but I'm—I kind of understand it or whatever because it's electronic or it's expensive. It's $1,000 or whatever.
But a $30 plastic elbow for my poop hose, and it wants to know if I want to pay another $3 to insure it for what? Like, what is the event that's going to happen that's going to cause me to go, Gee, I'm glad I saved the receipt for the shitter elbow because now I can take it back to Walmart and get what? I couldn't even wrap my head around. But what I could wrap my head around is the more they ask for shit like this, the more people are going to say yes. So they just ask, and inevitably people will just, Oh yeah, protection.
Protection sounds good. I want protection. Wait till you try to make a claim and remember where the receipt was or when you bought it or whatever. Oh, you mean you don't think I'm going to save the receipt for my stinky, slinky elbow? No.
Like, of course not. I'm not going to save that receipt. And here's my favorite. Do you know that receipts fucking disappear? The ink disappears automatically after about a year.
That's my favorite. I'm not a conspiracy theorist, but what the hell? Here's your warranty receipt. Don't lose that. Two years later, you need it.
You go to your box and you got a blank fucking… Like, what the fuck? They're like, Oh, you're supposed to scan it in. Like, yeah, but how many people actually get their receipt, then go scan it in, save it in a folder? No, they throw receipts in a box.
Like, that is a conspiracy if I ever heard one, of receipts that you're supposed to keep for proof of purchase start, like, doing the Back to the Future thing where it's slowly disappearing after a… I mean, did you ever, before you knew any better—I can't remember before I knew any better—if I ever had a claim on anything that I fell for that on. You might as well stab a fork in your eye. I mean, your credit card gives you extended protection on—a lot of them do. Yeah, but good luck.
I mean, if you have, like, a legit, like an Amex card or one of the bigger cards, a smaller card that's just trying to get fees from you, no. But any kind of warranty claim, I don't care what it is, most of the time they make it on purpose so you don't ever even want to try to claim the warranty, because there's so many hoops they're going to want you to jump through before they'll even consider it. The warranty thing for me is like when you're buying some piece of food… And they do the, Hey, let me flip this around. I've got a couple questions for you.
Oh, you know, you give me a tip for, you know, boop, boop, boop, boop, boop. Yeah. Yeah, and then they kind of, like, stare off to the ceiling like they're not looking. Like, I'm not going to look. Yeah, but you're going to see it as soon as you turn back around, bro.
You think I don't think it shows you whether I checked you or not? Yeah, it sucks. Then I'm going through in my head, am I taking this to go or am I going to be sitting in and this guy's staring at me for a half an hour going, That cheap mother… Yeah. But anyway, don't get the extended warranty.
I mean, you get a TV or whatever, still don't get the extended warranty. Your TV's going to be outdated. You know, technology is improving so fast. You know, a thousand-dollar TV, two or three years later, is going to be a $300 TV. Yeah, and the thing about electronics is, if they're going to break, 90% of the time they're going to break within the first month.
They're going to fail quickly. Yeah, so don't get the extended warranty, especially if you're buying a poop hose. You don't need a warranty. It just—and that's why Steve, because I was so, like, off-put by the suggestion that I called Steve. I'm like, You're not going to believe this shit.
Literally. They tried to get me to give them $3 to warranty my plastic poop elbow. Like, what? I just cannot imagine a scenario where I'm like, Yeah, this has run its course. I think I need the warranty.
And I didn't take the time to look it up, but like you said, my guess is it would be a pro rata warranty anyway. They're not going to give me—it's not like I'm going to walk in with this cracked plastic thing and Walmart's going to go, Cool, thanks for that. Here's a $30 credit. Go buy a new one. Four years from now.
Yeah, they're going to say, Oh, well, you know, that's, you know, diminished in value after your first use, obviously. And so now your credit is three dollars. Oh, good. That's what I paid for the warranty. Awesome.
Class Actions and Rebate Hoops
That's like winning a class action lawsuit. Well, you know, you talk about those on the website all the time, and we don't bring them up that much on the podcast because my thing has always been, is the juice ever worth the squeeze on submitting a claim in a class action lawsuit? Well, some of them are automatic. I mean, I just got a check for $450 from a class— For what? Blue Cross Blue Shield was involved in an overcharging class action suit, and I had them that year as my insurance company and got money back.
But it was one of those, you don't need to file a claim. It was automatic. Yeah, they already had the name. I don't file claims now. Yeah, but the ones that you file claims, that's the attorneys out there doing all the marketing, trying to get as many people on as they can so they can beef up the— and then the attorneys make half of it.
So, you know, Oh, we got a $30 million payout for you, blah, blah, blah. Well, they take 15, and then they got 15 million people signed up to benefit from it. So everybody gets a fricking dollar. Yeah, and I get the attorney point of view. You know, these suits would never happen if they didn't think that they were going to get paid.
But there's the inequity built into every step of that thing. Yeah, but my point is for the individual, and you get the email, it's like, Oh, did you have Verizon from blah, blah, blah, blah, blah, blah, blah? And it's like, Oh, go fill this out, go do that. Yeah, you can, but if you're going to get, at best case scenario, five dollars, is it even worth it? You know?
Like everybody, and for some people maybe it is, but everybody kind of has that point where, you know, when you start getting like all these discounts and you have this stuff, you buy this, you get 2% back if you go to this website and buy— But you get to the point where the couple of dollars that you're going to get is not worth the hassle and the time. It's like when you get those, you know, if you buy this, we'll send you a gift card or a rebate card. Yeah, but you're not going to get it for six weeks. You got to make an application to get it. And then, you know, when you get it, if you forget about it, it's going to time out and it's not going to be worth anything.
Oh yeah, Verizon used to do that. It used to piss me off when you'd go—they don't do it anymore, at least not that I'm aware of, because I haven't had to do it in a long time—but when you go, you buy a new phone, like, Oh, you're going to get this phone for free, and it's like, Well, yeah, technically, but you're going to have to pay for it. But then you're going to have this long-ass receipt and all these hoops you have to jump through, and then you're going to submit it for the claims or whatever. How are you going to keep track of that? And as long as—yeah, and as long as everything goes through, you'll get the credit back to your account in a few months.
But how many people walk out of that store, they went in with the intention of, I'm going to get this free phone, and then they never get the free phone because, you know, once they have the phone, they misplace the receipt or they put it off or they procrastinate. And Verizon knows that probably 80% of the people that intend to get a free phone never follow the actual steps and they get it. And that's the only reason they do it like that. And that used to piss me off because, like, you're offering this, but you're going to make me jump through all these hoops knowing that most people won't do it, and the people that do do it have to hassle to get the money back that you promised them in the beginning. It just, out of principle, it pisses me off.
Again, cynical in my old age.
Closing
Well, on that note, let's wrap up this week's podcast. Yeah, I was going to throw out one of your articles on the GetOutOfDebt.org website. Don't do it. I don't have time, but if you have a spouse—this article is actually pretty good that you had recently—that said, Am I automatically on the hook for my spouse's debt because we're married? It's a good article.
It has to do with whether you live in community property states, non-community property states. But the reason I brought it up is because I get that question a lot from married couples and divorced couples about, This is my ex-wife's debt, or This is my wife's debt. Are they going to come after me? And sometimes, sometimes no. So anyway.
I was just working on a post today. It was a great question. It came from a chat. But if I'm an employee of the federal government, if I file bankruptcy, will I lose my job? So that post is up there too, getoutofdebt.org.
Yeah. Yeah, not, Yeah, you will. Yeah, like, Yeah, that's a good article. They're always enlightening. I love doing the research.
All right, Damon, until next time, people can reach you at damonday, D-A-M-O-N D-A-Y dot com, and I will see ya. And people can't reach Steve, but you can reach AI Steve at getoutofdebt.org. Peace.
Frequently Asked Questions
Does a debt relief company have to act in my best interest?
No. Debt settlement companies and credit counseling agencies have no fiduciary duty to you. A fiduciary is legally required to put your interests ahead of their own; these companies are not, and the person on the phone is generally a salesperson earning a commission. That is a job description, not an accusation — but you should weigh their advice the way you would weigh advice from anyone selling something.
Why would a debt relief salesperson talk me out of bankruptcy?
Because they earn nothing if you file. When a company is paid a percentage of enrolled debt, every option that does not involve enrollment costs them money. That is why fear of bankruptcy shows up so reliably in those conversations — it is worth money to the person using it. It does not mean bankruptcy is right for you; it means you cannot rely on that source to tell you.
Should I use my retirement account to pay off debt?
Almost never, and it is the most common expensive mistake I see. Employer plans such as 401(k)s are generally excluded from the bankruptcy estate under Patterson v. Shumate (1992), IRAs are protected up to a cap that stood at $1,711,975 after the April 2025 adjustment, and Social Security benefits are protected from ordinary creditors by 42 U.S.C. § 407. Withdrawing that money — often with a tax bill on the way out — converts protected assets into payments to creditors who had limited ability to reach them.
Do I have a moral obligation to repay every dollar?
That is your decision to make, but it should be made with accurate information. Accounting rules require a lender to estimate expected credit losses and record them as a cost at the time credit is extended. Some level of non-repayment was estimated, budgeted, and priced into what you were charged before you ever missed a payment. The lender is not surprised. What I object to is that guilt being used as a sales lever by someone earning a commission on your answer.
A credit counselor offered me a lower interest rate but the same monthly payment. Is that a good deal?
Not necessarily, and that specific combination deserves scrutiny. If the rate falls and the payment does not, the difference is going somewhere — usually into a longer term, fees, or both. Ask for the total you will have paid when the plan ends and how many months it takes, in writing. If nobody will give you those two numbers, that itself tells you something.
Does "nonprofit" mean a credit counseling agency is looking out for me?
No. Nonprofit describes a tax status, not a duty to put your interests first. I ran a credit counseling organization and I am not hostile to the concept, but a debt management plan can still cost you years of retirement contributions you never recover, and the agency has no legal obligation to raise that with you.
What is the fastest legal way to raise extra money if I am behind?
Delivery gig work, because there is no runway. No capital, no inventory, no customers to find — a background check fee, a phone, a car, and the money can be cashed out the same night. Expect the first few attempts to go badly: my co-host's first grocery shop took three hours and paid about $30, and he now does comparable orders in under an hour. That gap is entirely learning which orders to accept.
Should I put extra income straight toward my bills?
Not by itself. Throwing money at the bills without a plan is pouring water into a boat with a hole in it — it gets absorbed into minimums and fees and you cannot point to what it bought. Decide first what you are doing about the debt, then use the extra income to make that plan finish faster and more reliably.
Are extended warranties ever worth buying?
As a general rule, no. They are priced by people who know precisely what the repairs cost them, and the offer exists because across everyone who buys it they keep more than they pay out. Add claims processes tedious enough that many people give up, and receipts that fade to blank thermal paper. Say no and put the same amount into savings instead. After a year, count how often you actually needed it.
