Quick Answer: Being able to pay bills while broke means having enough income to cover minimum payments but no money left for savings or emergencies. Julie’s situation with $25,000 unsecured debt and halved income requires exploring debt management plans or nonprofit credit counseling before considering debt settlement, which would damage her 720 credit score — though a DMP means years of repayment and real retirement savings given up compared to a bankruptcy discharge, which given her husband’s disability and reduced income is also worth a serious look.
Debt Guru,
I have close to $25,000 of unsecured debt that is causing me a great deal of worry. When my husband was working fulltime and making a good living the payments weren’t a problem. As he is now disabled and suffering from leukemia, I am not sure what to do.
My income is half of what it was and my bills are not! I have talked with firms that say to quit paying my bills and work with their program….that is very scary to me as I have a good credit rating 720 and pay my bills on time. I am afraid of how I will be able to continue these payments. What should I do?
Julie
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Let’s start with the basics.
I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth. It will give you a great overview of what we need to deal with to get you moving in the right direction.
Then use the free How to Get Out of Debt Calculator to review your options.
After that, come back here and comment about what seems to make the most sense and let’s discuss that.
Does that sound like a reasonable approach?
Steve