I Can’t Get Out of Debt With What I Make. What Can I Do Without Hurting My Credit? – Michelle

“Dear Steve,

I took all the debt from my previous marriage plus a mortgage. I have been able to pay at least the minimum for the last 3 years but have been unable to pay down anything. I have asked for rate reductions, etc. One card offered me a temporary rate reduction but the others have not. My credit was bad in the past and I have worked very hard to improve it. I don’t want to ruin it again. None of the banks have allowed me to discuss settlement options because my accounts are current. I am no longer adding to the debt but I don’t have anything extra to pay it down with.

Are there any options to settle or payoff without ruining my credit?


Dear Michelle,

I understand your goal but it’s mixing objectives. It’s a bit like saying I want to go fast and cook great meals at the same time.

Credit can be rebuilt as needed but debt can only be tackled most effectively with the right solution. And depending on your situation the most appropriate tool for the time might immediately impact your credit score.

No solution, other that paying your debt off in accordance with the contractual terms or getting an unsecured debt consolidation loan to satisfy your debt, will not leave your credit without some mark.

It appears that some sort of intervention is going to be required in order to allow you to get your finances back on track and get you financially safe again.

The most logical approach would be a chapter 7 bankruptcy. With that approach you could be debt free in less than three months and get to work rebuilding your credit quickly using my free guide.

Let’s start with the basics.

I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.

See also  I Feel Like I'm Drowning in My Debt. I Can't Breathe and I'm in Tears. - Erika

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.

If you are still unsure what to do then I’d suggest you take advantage of this free consultation.


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.
Damon Day - Pro Debt Coach

Steve Rhode

4 thoughts on “I Can’t Get Out of Debt With What I Make. What Can I Do Without Hurting My Credit? – Michelle”

  1. Why does this guy have a column and why do people even read it? It seems like all he has to say at the end of the day is “Gee, I dunno!” and people THANK him for it. Without knowing more…” following generic advice any 10 year old would know. 

    • I’m going to assume you were talking about me. I’m certainly open to alternative opinions on the reader question. So what specific advice do you have for the reader based on their question?

  2. how much unsecured debt do you have?

    we had $38,000  in debts, and most of our monthly payments were just keeping up with the interest. we were treading water for years, always stressed and never getting ahead. our annual income was about $45000 at that time.

    we decided to spend a year tackling these debts, so we could get a fresh start.

    we trimmed our budget a lot. cancelled cable, cheaper cell phone plan, cancel gym membership, shop at costco, used public transportation exclusively…all the little expenses really add up, so eliminating them helps.

    we sold everything of value we had, which included some vintage furniture and musical instruments.

    my husband started working a sixth day at his job, and i started making and selling things on ebay and etsy.

    in order to speed up the process, we opted to settle some but not all cards, saving us about $10,000. our credit took a hit, but we kept some cards open and current, so that when the negatives fall off, our credit history will be pretty long.

    if you dont want the negatives at all, then you will have to pay in full. you will have to consider your debt to income ratio and decide if that something that is really worth it to you. 

    •  Great comment!   We did the same thing.  Cell phones and cable TV add up to $2400 a year right there!   You can pay off a lot of debt getting rid of those!

      It may sound harsh, but many folks think they are “entitled” to certain standard of living, and won’t make “lifestyle changes” first.

      We are now debt-free, and you know, we never went back to Cable TV.  I use a $100 a year Gophone now (1000 minutes, I am not an obsessive-compulsive cell phone user).

      We own a lot less “stuff” now, but we are now debt-free.  We own the best thing you can possibly buy on this planet – OURSELVES, FREE AND CLEAR.

      The hardest part?  Deciding to do it.   We didn’t want to feel we were “giving up” on our lifestyle (how dumb is that?) and felt that friends would think we were “failures” or mock us for not having 500 channels of cable and a huge television.

      I watch my friends now, as they struggle with debt and bills, some well into their retirement years.  They have lots of “stuff” but they are so unhappy.

      The journey is worth the effort.   But you have to want to do it.

      Good Luck!


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