Medical Reasons Led to a Reduction in Income. Should We Settle our Debt? – Roger

“Dear Damon,

My wife retired early due to medical reasons last year. My hours have been reduced at work. Our total incomer has dropped by 30%. We are now in the process of short selling our house. We also have credit card debt of $50,000.

I have been told that my credit score of 750 will take a hit, but will recover in about 2 years. Is there anything I can do about negotiating with my credit card company (same bank as my mortgage) for an adjustment (interest or balance) ? I am worried that the credit card issue will cause more harm to my credit long term, since I assume it is looked upon differently by the credit agencies. I have not yet missed any payments. Money to settle would have to come from my wife’s retirement account, but that would allow us to have no debt within a short amount of time.


Dear Roger,

Yes, you can negotiate lower interest rates and even settlements with your credit cards. However in order to negotiate a lower interest rate you will either need to likely fall behind on your cards for 30 to 60 days, or enroll in a credit counseling program.

In order to settle your debts you will need to fall behind even farther. Whether or not it is advisable for you to use your retirement funds to settle your debts I cannot say, however before you do I would recommend you look into bankruptcy as you may be able to wipe out your debts and protect your retirement at the same time.

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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