Ask The Get Out of Debt Experts Paycheck-to-Paycheck

We Are at Our Breaking Point Trying to Pay the Bills Each Month. – Michelle & Phillip

“Dear Steve,

WE ARE A ONE INCOME FAMILY WITH 4 CHILDREN. THREE WERE STILL LIVING AT HOME AND ONE IS MARRIED WITH ONE CHILD. SO WE WERE SUPPORTING 7 PEOPLE ON ONE INCOME… I STARTED USING CREDIT CARDS FOR GROCERISE, THE TRUCK BROKE DOWN AND COST AROUND $10,000 TO FIX. ALSO QUITE HONESTLY WE SPENT MONEY ON THINGS WE DID NOT NEED. THEN MY EX-HUSBAND DECIDED TO WORK OFF THE BOOKS AND STOP PAYING CHILD SUPPORT ($700 A MONTH FOR 4 CHILDREN) AND THE NEW REGULATIONS KICKED IN AND ALL (EXCEPT ONE) OF OUR CREDIT CARD COMPANIES RAISED OUR RATES.. TWICE.. AND UP UNTIL THIS POINT (MEANING WITHIN THE LAST MONTH) I WAS NOT LATE (EXCEPT MAYBE BY A FEW DAYS AND ONLY A FEW TIMES) SO NOW ALMOST ALL MY CARDS ARE AT 29% INTEREST AND OUR INCOME HAS BEEN REDUCED BY $700 A MONTH.

I HONESTLY AM NOT SURE WHAT THE RIGHT QUESTION IS.. I JUST WANT TO BE ABLE TO BREATHE.. BUY GROCERIES AND PAY MY BILLS.. ARE THERE ANY PROGRAMS OR COMPANIES OUT THERE THAT YOU COULD RECOMEND TO HELP.. I AM NOT WANTING TO NOT PAY WHAT I OWE.. HOWEVER DUE THE HIGHER INTEREST RATES GROUPED WITH THE LOSS OF INCOME, BROKEN VECHICLE THAT HAD TO BE REPAIRED, THE EXTRA FAMILY MEMBERS THAT NEEDED OUR HELP AND ADMITTEDLY MY HUSBAND AND I SPENDING MONEY ON THINGS WE SHOULD NOT HAVE. WE ARE AT A BREAKING POINT AND I DON’T KNOW WHAT TO DO OR WHERE TO GO FROM HERE..

THANK YOU FOR YOUR TIME,
SINCERELY,
MICHELLE AND PHILLIP”

Dear Michelle & Phillip,

While the emotional pressure of the current situation you are living in can be immense, we need to focus on the bigger picture. If we step back and look at your current situation, here is what I hear you saying:

  • Income has been reduced.
  • It’s hard to be able to afford the basics.
  • You have no savings or emergency fund to fall back on.
  • Many are depending on you.
  • You can’t make ends meet.

In your current situation I can’t see how any repayment plan is going to resolve the underlying issues. At this point the goal should be to get your life to fit within your current income and allow you to save money at the same time.

So any repayment approach like a credit counseling program, even if the creditors reduce your interest rates, is going to require you to make additional reductions in your expenses in order to afford the debt management plan payment. It doesn’t sound to me as if you have any room to reduce expenses to make the credit counseling program work. But you know what, if you want to check it out you can click here for credit counseling information.

Probably what you are facing is the need to go after a legal financial second chance and fresh start with bankruptcy. A bankruptcy will allow you to discharge your debts and have the single best shot of getting everything reset so you can live within your income and save money again.

Before you make any judgment about bankruptcy you need to get the facts about what bankruptcy would mean for you. You can click here to find a local bankruptcy attorney and go talk to them.

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

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About the author

Steve Rhode

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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