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I’m Sick With Worry Over My Debt. Should I Settle? How Do I Get Out of Debt? – Beth

“Dear Damon,

Hi – i am a 41 year old self employed woman who has accumulated credit card debt up to $35k over the past 6 years. I am a homeowner with 15 years left on my mortgage – and i moved out of the home and rented it out, so i could rent something cheaper to help my the credit cards.

I am basically making ends meet and my business income has not increased, in fact this year it actually decreased so i now I am facing not being able to pay minimum pmts for the first time in my life. I have 700+ credit.

I have had to move twice in 2 years, due to the rental housing being unsafe at the prices I could afford, My housing costs have increased this year, so i have decreased my other costs as much as possible. I am now unable to cover minimum pmts as of this month. one credit card with citicards is $25k and going over the limit when they charge my next interest pmt on May 10.

I have been sick over my financial situation for the past 2 years as it seems to get worse and worse. Now my roommate is moving out, and my landlord wont let me get a new one, so thats $600 a month less I will have in income per month. I cannot describe the panic Ive been experiencing and I really dont know what to do. I would like to settle my credit cards, at least my large one. But I dont know if that is possible. Also i would have to liquidate my retirement to do so.

Do you have any advice? I do not talk to my friends about this because I am so embarrassed, and also because they are not that great with money either. Please let me know if you can lead me toward a solution.

Increasing my income is the only solution I can come up with but my own business does not yield enough and the jobs that are willing to hire me right now do not pay more that $45k, not enough to make my $1000 a month credit card payments. please help!

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Hello Beth,

Looking at the information you are giving me, the first thing that comes to mind is that we need to at least look into the option of filing for bankruptcy. You mentioned you would like to settle your debts, but if you can potentially qualify for a chapter 7 while keeping your home, it likely won’t make sense to wipe out a retirement savings that would probably be protected in bankruptcy.

One thing is clear and that is you cannot continue to afford these payments, especially now that your housing cost will be increasing an additional 600 and you were barely making ends meet prior to that. So something has to give and it is going to be the 1,000 dollar a month credit card payments. The question then becomes, are you going to attempt to settle or file bankruptcy. To answer that question, you should first meet with a local bankruptcy attorney and find out specifically what bankruptcy would look like for you. Based on that information you can determine if raiding the retirement account to try to settle the debts is a more attractive option.

Please contact a local BK attorney and let me know what you find out.

Damon is a talented independent debt coach that provides in-depth assistance and consultations for people struggling with debt. If you want a personal debt coach to help you through a difficult situation or want assistance to find secret discounts offered by debt settlement companies I think Damon Day is an excellent person to contact for advice and assistance. He can be reached directly at

If you have a debt related question you’d like to ask, just use the online form.

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Damon Day

Damon Day is a talented Debt Coach who offers fee based consultations to consumers as an alternative to the typical free debt relief consultations which are nothing more than thinly veiled sales pitches lacking any real information to help a consumer make a good decision. You can learn more about how he can protect you from getting ripped off at

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