“Dear Steve,
Having CC debit of total $35,563.82 with 13 CC ranging from $280 to $7900. Having contacted with TakeActionAmerican and Clearpoint these two agency. From TAC’s DMP:$795.42 first payment then $745.42 monthly payment for 4yrs and 8 Months,monthly service fee is $30(included).
From CP’s DMP:$895 monthly payment for 4yrs., monthly service fee:$35(included). My current monthly income is around $1000, the living expensive is $250 per month.
I have three questions:
1. Should I paid off the small balances Credit Card like some$200 or $300, without paying the big ONEs?
2. It looks like the TAC’s plan is providing more cushion in between my income vs. payment than the other? But I end up would paying 8 more month…I need your advice to make a decision?
3. Is bankruptcy an option?(I am married with two kids and have one car under both my wife & my name, she owns the house.)
Thank you so much.
David
Attachment: Credit Report”
AMERICAN EXPRESS
Balance:
$6,758
AMERICAN EXPRESS
Balance:
$587
BANK OF AMERICA
Balance:
$1,024
CHASE AUTO FINANCE
Balance:
$3,063
CHASE BANK USA NA
Balance:
$634
CHASE/BANK ONE CARD SERV
Balance:
$1,625
CHASE/BANK ONE CARD SERV
Balance:
$3,451
DISCOVER FINCL SVC LLC
Balance:
$5,098
DISCOVER FINCL SVC LLC
Balance:
$4,433
GE MONEY BANK/CHEVRON
Balance:
$240
GEMB/PAYPAL EXTRAS MC
Balance:
$7,779
GEMB/WALMART
Balance:
$208
NORDSTROM FSB
Balance:
$546
SEARS/CBSD
Balance:
$3,045
Dear David,
At first glance the fact that jumped off the screen at me was your statement “My current monthly income is around $1000, the living expensive is $250 per month.” If your wife would not be contributing towards the repayment of this debt then we first need to evaluate if either plan leaves you with enough income to really live on and save money at the same time.
The ability to save money as you are digging your way out of debt is critical. Unless you can start and build an emergency fund then you will inevitably find yourself in the unfortunate position of having a life emergency and needing some cash to deal with it. Without savings, what are you going to do? All the cards you include in a credit counseling program would be closed so you’d have to probably use another card to pick up that expense. If you do that, you are no longer digging your way out of debt.
I think you need to realize that both companies are giving you their best guesstimate on what the monthly payment would be. The final payment is up to your creditors. So in evaluating if this is even a path to consider we need to make decisions based on the higher of the two payments. More importantly, does it even seem reasonable that you’d be able to make payments month after month to either plan and survive for the next 48 months on $105 a month?
Can you help me to better understand your overall financial picture in your marriage. What expenses are your responsibility in the home?
Let’s get some clarity on this issue first before we start to look at the best direction to head in.
Just post your answers for me in the comments section below.

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Yeah, looks like I have to bring everything onto the table wit my wife and have a serious review of the $$, then will compare all the debt solutions.
With your available disposable income it looks like a credit counseling program would be a stretch and probably not be successful.
So what are you thinking now? Are you going to pursue bankruptcy a bit more?
Steve,
After talking with one of local bankruptcy attorney, I was suggested to consider filing either bankruptcy with Chartper 7 or 13 depend on the community property…going for DMP maynot be the best choice…
I have contacted with ClearPoint and TakeActionAmerican.
Which DMP company are you using?
Thanks Sandy.
I will talk to a local bankruptcy attorney as Steve suggested.
Thanks Anisa.
I will talk to a local bankruptcy attorney as Steve suggested.
Dear Steve,
I will talk to a local bankruptcy attorney and keep you posted.
Thanks.
David & Steve,
Have you considered a Debt Management Plan? They usually charge a set monthly fee and will work with you & your creditors to reduce payments and interest rates. I am signed up with one and they have assisted me a LOT! They usually require a (usually free) credit counseling session before signing you up. My DMP had everything taken care of within a month. Remember to check and confirm any company you use is licensed to do business in your state of residence and also check with the Better Business Bureau for their ratings.
sandy
David & Steve,
Have you considered a Debt Management Plan? They usually charge a set monthly fee and will work with you & your creditors to reduce payments and interest rates. I am signed up with one and they have assisted me a LOT! They usually require a (usually free) credit counseling session before signing you up. My DMP had everything taken care of within a month. Remember to check and confirm any company you use is licensed to do business in your state of residence and also check with the Better Business Bureau for their ratings.
sandy
Thanks Sandy.
I will talk to a local bankruptcy attorney as Steve suggested.
Which DMP company are you using?
I have contacted with ClearPoint and TakeActionAmerican.
 Sandy,
What credit counseling company are you using if you don’t mind me asking? I want to move forward in a DMP but I am not sure which company. So far, I have looked spoken to GreenPath, MMI, Clearpoint and Card One.
David,
Although I do believe that TakeActionAmerican and Clearpoint are giving you their best estimate on a program, I do not think you should jump the gun on signing up with just any debt relief agency. In financial situations such as yours, or any other for that matter, it is very important to do your homework before you enter a program.
You need to do some research so you find a solution tailored to your specific situation. For instance, if you go to a credit counseling agency, they are going to sell you on credit counseling. If you go to a debt settlement agency, they are going to sell you on debt settlement. The same scenario goes for bankruptcy attorneys and loan officers. I strongly believe that by educating yourself on your options you will have an overall better understanding of what program will be best. You want to make sure any decision you make not only fits your current financial needs but also your future needs. With any company you do decide to go with, make sure you review them well to avoid any fly-bys.
David,
Although I do believe that TakeActionAmerican and Clearpoint are giving you their best estimate on a program, I do not think you should jump the gun on signing up with just any debt relief agency. In financial situations such as yours, or any other for that matter, it is very important to do your homework before you enter a program.
You need to do some research so you find a solution tailored to your specific situation. For instance, if you go to a credit counseling agency, they are going to sell you on credit counseling. If you go to a debt settlement agency, they are going to sell you on debt settlement. The same scenario goes for bankruptcy attorneys and loan officers. I strongly believe that by educating yourself on your options you will have an overall better understanding of what program will be best. You want to make sure any decision you make not only fits your current financial needs but also your future needs. With any company you do decide to go with, make sure you review them well to avoid any fly-bys.
Thanks Anisa.
I will talk to a local bankruptcy attorney as Steve suggested.
I’ve been sitting here staring at the screen and thinking about what is the most obvious solution and there isn’t just one.
What I’d like to see you do right off the top is to save at least $50 a month into a savings account. After all the other expenses you listed above, with the savings, you are only left with $529 a month and that’s not going to be enough to expect success with a credit counseling approach.
Before you leap at that solution you owe it to yourself to talk to a local bankruptcy attorney and get the facts about what bankruptcy would mean for you. You can click here to find a local bankruptcy attorney if you’d like.
Once you meet with or talk to a local bankruptcy attorney, come back and update me about what you think of that solutions for your situation.
We don’t need to act hastily here, let’s take a few moments and get the facts so you can make the best decision possible for you.
Sound reasonable?
Steve
Hi Steve,
Thanks for the response.
Here is the detail as follow up:
1. My wife pays the House mortgage, auto loan, utility bill, property tax.
2. I pay for the following expensive:
-Gasline: $100/month
-Auto Reg fee: $21/month
-Auto Insurance: $70/month
-Child Care: $80/month
-Misc:$100-150/month(fastfood, eatout, books for kids)
3.My monthly income: $1500-1800(AS I Said I have $1000 in MY POCKET, she have the rest of them.
Hope this info will give you a picture.
Thanks again,
David
Hi Steve,
Thanks for the response.
Here is the detail as follow up:
1. My wife pays the House mortgage, auto loan, utility bill, property tax.
2. I pay for the following expensive:
-Gasline: $100/month
-Auto Reg fee: $21/month
-Auto Insurance: $70/month
-Child Care: $80/month
-Misc:$100-150/month(fastfood, eatout, books for kids)
3.My monthly income: $1500-1800(AS I Said I have $1000 in MY POCKET, she have the rest of them.
Hope this info will give you a picture.
Thanks again,
David
I’ve been sitting here staring at the screen and thinking about what is the most obvious solution and there isn’t just one.
What I’d like to see you do right off the top is to save at least $50 a month into a savings account. After all the other expenses you listed above, with the savings, you are only left with $529 a month and that’s not going to be enough to expect success with a credit counseling approach.
Before you leap at that solution you owe it to yourself to talk to a local bankruptcy attorney and get the facts about what bankruptcy would mean for you. You can click here to find a local bankruptcy attorney if you’d like.
Once you meet with or talk to a local bankruptcy attorney, come back and update me about what you think of that solutions for your situation.
We don’t need to act hastily here, let’s take a few moments and get the facts so you can make the best decision possible for you.
Sound reasonable?
Steve
Steve,
After talking with one of local bankruptcy attorney, I was suggested to consider filing either bankruptcy with Chartper 7 or 13 depend on the community property…going for DMP maynot be the best choice…
With your available disposable income it looks like a credit counseling program would be a stretch and probably not be successful.
So what are you thinking now? Are you going to pursue bankruptcy a bit more?
Yeah, looks like I have to bring everything onto the table wit my wife and have a serious review of the $$, then will compare all the debt solutions.
Dear Steve,
I will talk to a local bankruptcy attorney and keep you posted.
Thanks.