I Negotiated Debt Settlements But Can’t Afford to Pay Them. – Steve

“Dear Steve,

I recently went back to school to get my MBA – I graduated with it in 2009, but was unable to find a job in the finance industry, despite experience and the degree.
I put the cost of school of credit cards and the debt spiralled out of control, and on top of additional debt I had, totaled $75K.

I approached Donaldson Williams debt reduction company, and defaulted on my debt in September – but my business has been slow and I can’t afford to pay the full amoount of the 2 settlements they just got for me.(totalling about $8K)

To make things even more complicated, I can’t file bankruptcy as I signed a mortgage with my wife on our home, even though I have since taken my name off the property – I don’t want her to get dragged down into that.

So, the only two options I see is pay the creditors whatever I can right now, or not pay at all!

What is the reality of what might happen if I don’t pay my debt or the settlements? – I mean other than getting a bad credit rating, can I be sent to prison or have my house repossessed (even though my name is no longer on it)? What else might these creditors do, and how could I avoid it?.

Thanks for any suggestions


Dear Steve,

You can always be sued by your creditors for failure to pay, your wages could be garnished, and any asset you have may be attached.

Your wife is already dragged down in this mess by the very fact you are drowning under it.

If your name is not on the house they it’s not an asset of yours. I don’t see anything here that would indicate you can’t file bankruptcy individually and deal with the debt. And quite frankly, you’ve already shown that even in a settlement approach you don’t have the resources to make payments.

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So let’s look at how this may look in the future. You either do nothing and let this defaulted debt fester and linger showing you took no responsibility for it and did nothing, or you take some sort of action, own up to the situation and take a good hard look at bankruptcy so you can reboot your financial life.

You can click here to find a local bankruptcy attorney.

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


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

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