About 18 months ago I entered an agreement with Money Management. At the time I had two incomes that allowed me to faithfully make a payment of $1710.00 a month. Today I received notice that my second job with a salary of $41,000 was eliminated effective today. I still owe about $53,000 in unsecured debts from credit cards and consumer loans. I am also paying the IRS $600.00 a month for about $30,000 in past due taxes. I now have $44,000 in income.
Should I attempt to work at restructuring the payment plan with MMI or should I go for Chapter 7 bankruptcy? Also, how does your program work?
If your income has been cut in half, the last thing on your mind should be paying the credit cards. You are likely going to need to contact MMI and tell them you will no longer be able to continue and not to draft the next payment. This is emergency mode and cash is king and only essential spending is allowed until you can reorganize your finances to fit into your new income or find an additional source of income as a replacement.
The IRS is a different animal entirely and if you can’t discharge those years in a bankruptcy you will need to keep paying it if you can.
Given the drastic nature of what has just happened to your finances and some tough and major decisions you are going to need to make in the next few weeks, I would recommend you schedule a private phone consultation with me so that I can learn a lot more about your overall financial situation and help you put together a specific plan to move forward with.
It seems that you have been dealt a crappy hand, but we have no choice but to play the hand that we have and see if there are some things we can do to improve it.
I don’t really like making specific recommendations until I have a full understanding of your situation including whether or not you have any savings, assets, 401K’s etc. I would recommend that you schedule the consultation at least a week before your next payment is due with MMI. The chances that you will be able to or should continue with that at this time are very slim, but I can give you a definite answer when I have your financial picture in front of me.
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 DamonDay.com
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