“Dear Steve,
Mounting credit card debt is getting difficult to pay. I’m thinking of just ONLY taking care of house, car, utilities, food, insurance. I’m a single mother of two kids and get no child support. I’ve worked so hard for good credit and I am losing it.
What do I do? Not pay and wait for it to wipe off credit? File for bankruptcy before it’s too late?
April”
Dear April,
First, let me extend to you my biggest hug and deepest feelings of hope to help you through this difficult passage in your life. The pain and pressure you are living with right now, today, must be intense and make it difficult for you to be the strong mother that you want to be.
Good credit is an elusive target. You only really have good credit when your financial life conforms to what your creditors are most looking for. Your credit score is in fact a calculated score to allow creditors to identify who is most likely to be the lowest risk and highest profit maker for the creditor. Good credit and a good credit score has nothing to do with what is right for you and your kids at this time.
If there was a life score, I’m sure you would excel at it as a concerned mother that is trying to do what is best for you and your kids.
Having bad credit does have consequences, but then too does not being able to feed your hungry children, maintain insurance or being able to live in a safe environment. Ultimately, which is more important?
As I get older I realize that for me, the credit report and credit score are of lesser importance to me. What is most important in my life has to do more with trying to do the right thing, caring for my family and helping others.
In your situation you have wisely prioritized your financial obligations and you have found that after paying those items there is little left over to pay the credit card companies what they demand.
As much as you may not like the possibility, it might just be that you can no longer afford to repay the credit cards. In that case you have several options: You could stop paying the credit cards and let the collectors start calling; enter a debt management program and see if you can afford to pay a reduced payment to get out of debt; or consider bankruptcy.
Doing nothing is a stalling tactic and not a solution so that’s not really a good approach.
A debt management program might be able to craft a monthly payment for you but that payment will be based on what your creditors want and not based on what you can afford. Additionally, if you are living that close to the financial edge then I think you need to make sure you are able to put money each month into a savings account to protect your and your children in case of a financial surprise. Being in a credit counseling or debt management plan may not give you any room to save money each month.
That leaves us with bankruptcy. Bankruptcy is a legal solution you can use but before you make up your mind that bankruptcy is right for you I urge you to schedule a free bankruptcy review with a bankruptcy attorney and discuss your specific situation.
April, promise me this, that while the financial current situation is regrettable, promise me that you won’t loose sight of the fact that those small and loving faces that look up at you at night need you to be their protector and to care for them in a safe and healthy way. Do what is right for them, even if it is hard for you to face.
I’ll always be here for you.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Do you have a question you'd like to ask me for free? Go ahead and click here.
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I like your post!
I like your post!
Very well wrote. I may use something from your article. not like many others wrote just to be.It’s hard to be a single mom, and advices are allways welcome.Thanks!
I’m also a single mom but I tried everything to tighten my budget but still couldn’t afford to pay the minimum due.
As a single mom myself, the best thing to do is to try to cut your expenses to the bear minimum. No spending on makeup cosmetics, new clothes and other luxuries. Try to spend only on food and other every day things. Pay off your debt stating from high interest debt.