If We Have Good Credit But Not Getting Anywhere, is Bankruptcy an Option? – Chris

“Dear Steve,

My husband and I have about 60K in a combination of personal and failed business debt, but otherwise have sqeaky clean credit. We do not own our home and would like to as soon as possible. Our problem is that we have been paying near $800 a month on debts every month for the past 3 years and making little headway. It’s very hard to pay extra to get them down faster. I have worked hard to get rates down and as a result, so half our debt is near 5% and about 25K between 10 and 18%.

Our credit debt and lack of cash have prevented the opportunity to buy a home or save and we are slaves to interest at this much debt. We are in our very early 40’s with two kids and to make things worse, we cashed in our savings before we knew better.

I question what is worse, no cash flow and good credit potential with years of debt or relief from the consideration of bankruptcy and what that may mean for our future. I have seen loads of info on bankruptcy, but wonder how our circumstances may reflect that option. Any advice you can offer would be appreciated. Thank you.

If debt is very high and credit is otherwise super clean, is bankruptcy still a wise consideration?


Dear Chris,

Ultimately this comes down to a decision about your situation and likelihood of being able to accomplish your goals.

If you are stuck on the treadmill of being able to afford minimum payments but don’t see yourself getting out of debt then we need some sort of intervention.

This might be increasing your income, lowering your expenses, a combination of the both, or something else.

Bankruptcy is always an option since it is a legal right afforded under the law. But is it right in your situation? Ultimately the answer to that question is going to come down to your personal opinion after your do some homework.

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In your contemplation, I want you to consider the cost to you of not being able to save money each month and build your emergency fund. That has a financial risk to you as well if you are unable to.

While you are able to make minimum payments on time, that’s but one part of your overall financial condition. The person who is best served by your current efforts is the creditor only. It does not leave you in a position to safely protect your family, financially.

I’d like for you to click here and find a local bankruptcy attorney to talk to. Discuss your situation with them and hear what they have to say.

But also consider the option of increasing your income or using more income towards paying down your debt.

Another tool to consider is an unsecured debt consolidation loan to roll as much of your highest interest rate debt as possible into one loan and pay it off in three to five years. Your interest rate will be based on your credit but if you look at LendingClub.com and decide to go that route, let me know what your loan number is and I’ll help to fund it.

I know I’ve given you a lot to consider here but I’d rather you have a good game plan based on information and education than just rushing off to do something.

Here is a recent article I wrote that might be of interest to you. See How to Easily Get a Mortgage After Bankruptcy.

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


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Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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1 thought on “If We Have Good Credit But Not Getting Anywhere, is Bankruptcy an Option? – Chris”

  1. I would suggest watch out of anything that might hurt your credit. I had bad credit for a while and was shocked by how much it hurt my life. I finally got my score fixed through Lexington Law, but I dont suggest messing with your credit.


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