I Signed Up With New Beginnings But Still Owe a Lot of Debt. – Lorelyn

“Dear Steve,

I have 42, 000.00 ( private 10,000.00) remainder sallie mae student loans (3,700.00 ) taxes for 2010 because I had to increase my withholdings to make my monthly expenses. (4900) Amex in collections received summons- March 2011 (4900) Discover Card collections- (10,900) Bank of America in collections. Signed up for debt settlement last year with New Beginning Financial-I have 1600.00 in Global Client Solutions. Spoke with negotiator from New Beginnings this morning states he is working on settlement with AMEX. This year I just got my income and hours increased after 2 years of hour reductions and furloughs. I am making 46,000 now and bringing home 2600.00 monthly.

What do I do next-get out of debt settlement?? wait and see if they really do something-If I file bankruptcy will that effect my car payment??


Dear Lorelyn,

I think the real question here is if you want to start repairing the future or continue to focus on trying to repair the past.

Can you help me to understand why it would not make sense for you to take the money in your Global Client Solutions account and just file bankruptcy now, eliminate all your debt and use your legal fresh start to do better moving forward?

Probably the best thing for you to do, before you make any decision, is to meet with a local bankruptcy attorney, discuss your situation and then weigh what solution works best for you based on what your goals are for tomorrow, not yesterday.

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.

It seems to me that if you cleared out your old debt, put your government backed loans on an Income Based Repayment plan (IBR) and then focused on building up an emergency fund that you’d be in a much safer financial position moving forward.

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The bankruptcy attorney will probably tell you you can keep your car and make the payments but now without your other debt in the way the payments will be affordable for you.

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


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.

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Damon Day - Pro Debt Coach

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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.
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