My Life Has Been the Perfect Storm of a Sinkhole and a Debt Nightmare.

“Hi Steve,

I am the perfect storm of a life changing full life debt nightmare!( A little dramatic perhaps, but here goes)
I am a 34 year old mom of a wonderful son. I started a small(and at the time, successful) business out of my home in 2005. Things were great, bought a house in Florida in 05 and thought I was living the American Dream.

Cut to 2009, in a string of bad business decisions and a crumbling ecomony, I closed down my business and took a full time job. I was left with a large stack of unpaid business and personal debts, an upside down house and an IRS investigation.

IRS situation is resolved and I am making payment on a plan. Home is a big issue as I am behind BIG TIME on my 2nd mortgage and still 2 months behind on my modified first mortage. Last year, in addition to my plumeting home value, I had a unique geological episode at my property, a sinkhole, that openined up under my foundation. Insurance covered and fixed all, but my property value has further plummetted. With recent Legislation and Laws in Florida, selling a former sinkhole home is near immpossible.

So, now I am trying to get back on my feet – I have a good steady job and a relaible income. My fear is that this debt over my head is mind numbing. I am not sure what the best thing for me to do is. Not only do I have 60K in business debt, 40K in personal credit card debt( all in collections since 2009) an HEFTY IRS bill, but also a house worth nothing.

I feel at a cross roads and dont know where to turn or who to trust. I need a money makeover and some financial life support. I dont know how to get out from this mountain and which issue( as you can see I have quite a few) should be tackled first.

Thank you for your time!

Shannon”

Dear Shannon,

A sinkhole. Of course you did. Yikes! Having lived in Florida myself I know how those things can suddenly appear.

From where I’m sitting the path seems clear based on the information you’ve given me. But the real issue is what you want your life to be like 6 months from now or a year from now.

There are options and solutions you can implement. You can either address the situation with some tough choices and move forward with your life with a fresh start or you can spend the next five years living as you are.

The critical question is what makes the most sense doing now that can give you a second chance tomorrow.

You can only make the best decision for you by doing some homework. You can use the links below. But I think what you will find is that facing a potential future foreclosure and with the past debt you are dragging along, a chapter 7 consumer bankruptcy makes the most logical sense. Your IRS debt may be old enough now to even include in your bankruptcy and discharge in a few months as well.

We can pussyfoot around here or you can take decisive action to change things.

If you want to beat yourself up over mistakes you made, that’s your choice to do. If so, then your tomorrows will look like your yesterdays.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

But I believe people are good, they try to make the right decisions, sometimes life crumbles, and everybody is entitled to a fresh start under the law and to take what they learned and do better moving forward.

Maybe that’s just my defect, that I believe in people having a second chance and doing better. But ask yourself, if you’ve tried your best and you are still sinking, don’t you deserve a real shot at a better future?

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.

Then use the free How to Get Out of Debt Calculator to review your options.

Once you’ve identified a company you want to work with, then follow my step-by-step guide on how to check out a debt relief company.

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