“Dear Steve,

I am a single person who has no help.

Not only do I not have financial help in my life….but I go through the worry and stress alone trying to figure out how to pay all my debt. Its hard and emotionally draining by yourself. I have always wanted to do the right thing and pay my debts so I have NEVER allowed my payments to go behind. I have always made my payments but that is with a price.

Discover: $15,000
Citibank: 10,100

Because I have not wanted things to fall behind I have been draining my retirement account to nothing but I must now stop this and face facts. I do not know what is best for me. I spoke with free consult recently but did not have much time to spend since his next meeting was waiting. He quickly threw out several options:

1. One lump sum offering to the credit card companies. By doing this I would drain my retirement account. With the attorney sending a letter to these credit card companies with bankruptcy attorney logo telling them I will pay 30% of the balance as a one time payment.

I have yet to be late on any payments.

The attorney charges $600 for each credit card company

2. Chapter 13 bankruptcy: Your debt is eliminated but still make payments that is agreed upon.

I do not understand if your debt is eliminated then why do you still make payments….not sure I understand. How much of the debt do you have to pay…that is not eliminated to me????? The fees the attorney asks for is thousands.

What concerns me is my job finding out I file bankruptcy. I am leary of the consequences since I work with much money and you must always tell them when you file yearly they ask you and you sign a form. If they find out and you didn’t tell them you are immediately fired. Someone else filed for bankruptcy and has not lost their job but she is treated differently so I suppose the word gets out.

3. We had not even touched on chapter 7 at all. Maybe its because I have a job and want to keep my home….not sure

Before contacting this attorney again, I have so much faith in you and feel you would provide me honest feedback.

If there was a way I could speak with you, Please tell me how. I need to talk to someone who I trust. Being alone in this is frightening!

signing my initials

KL”

The Answer

Dear KL,

Thanks for the vote of confidence.

Settling your debt has ramifications as well. Those issues will most likely appear on your credit report for seven years. A future employer that pulls a credit report would see those as well.

But let’s not make a decision based on what someone might do. I think we need to make it based on what is the best approach for your situation.

Before committing to one path or another, I’m going to assign you some homework and get some additional information about your options.

I’d like for you to click here to find a local bankruptcy attorney and talk to them about your specific situation and what bankruptcy would mean for you. Let’s not guess or make assumptions.

On the settlement front you can talk to either Damon Day, Consumer Recovery Network, or Zip Debt about DIY or full service debt settlement help.

One thing we know for certain, while you might not have been late in your payments to your creditors, the fact you had to draw down your savings means you’ve been running negative for some time.

The time has come to deal with this so you can move forward with your life, save money, and have a better financial future. Read How to Get Out of Debt. The Honest and Unvarnished Truth.

And don’t worry about how this might impact your credit, it’s easy to rebuild credit. See How to Easily Rebuild Your Credit and Have Good Credit Again.

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

Big Hug!

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