Struggling With Credit Card Debt. Don’t Want to File Bankruptcy or Do Debt Settlement. – Mike

My wife and I have about $50,000.00 of credit card debt. We both work and we are also paying off our kids college.

I do not want to contact a debt settlement company because I believe they are all scams.

I also do not want to file bankruptcy.

I just want to know if there is an honest solution to reduce our debt situation.

The credit card payments are strangling us. Looking for good advice. Hope you can help. Thanks,


This is your chance to be a hero and help out this person by providing your feedback and answer to the question in the comments section below.

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10 thoughts on “Struggling With Credit Card Debt. Don’t Want to File Bankruptcy or Do Debt Settlement. – Mike”

  1. Mike,

    You have only a few options for such debt:
    1. Debt settlement. I am also not a fan but it is an option.
    2. Bankruptcy. If you qualify for a Chapter 7 filing it becomes a case of trading your credit rating for $50,000. Only you can decide if it is worth it. Chapter 13 is seldom worth it.
    3. Debt management. There are hundreds of credit counseling agencies that would put you on a debt management plan. You would basically pay $10k a year for 5 years plus fees and interest or maybe $1,000 a month to get out of debt. It will affect your credit but not quite like bankruptcy. Go to AICCCA or NFCC to find an agency. The counseling should always be free.

    That’s pretty much it for options.

    I would suggest that you think about your kids’ student loans. Perhaps they could make some payments while you pay down your credit card debt. My guess is that you haven’t saved a lot for retirement and you could easily find yourself hitting 65 with nothing saved due to all this debt. You don’t want to ask your kids to keep you.

    Be careful of your sources of help. You should always select them; don’t let them select you.

    Good luck!

    • Just remember, it is painfully easy to rebuild credit after bankruptcy and filing bankruptcy and then putting your primary effort into saving retirement funds might be the best approach.

  2. Settlement companies are scams but you can do settlements yourself! Stop paying your credit cards and save your money. Then take the savings and settle with each card. At about 60 to 90 days you can negotiate for 40% of the balance owed. Keep in contact with your creditors. Explain you are having a financial hardship and wish to settle. GET EVERYTHING IN WRITING BEFORE SENDING THE SETTLMENT. Your credit rating will take a hit, but it will soon be over.

    • Sonya – Debt settlement companies in general are not scams, though there are several examples over the last several years of companies operating like one. Depending on the situation and the person needing help to settle credit card debt, a debt negotiator can come in handy. I do agree though, that in most situations hiring a debt settlement company is unnecessary, and certainly when working out arrangements to settle with your bank directly.

      Your general statement about negotiating for 40% of the balance owed on each credit card at 60 to 90 days is a complete fallacy. As in… made up, or not true. Debt settlement is not rocket science. But there is a formula to follow to maximize savings and success. That formula can be a little different with each credit card, and each persons financial ability at key opportunity points along the way.

      I agree with your other comments, but getting the timing of settling wrong in the way that you did suggests you do not understand debt settlement very well.

      • I did this myself with four credit cards, so I’d say I understand the process quite well. The original poster can contact me if he likes.

        • And I would say you understand how the process worked out for you quite well. Settling debt at 60 to 90 days for 40% is not typical or likely for the majority of people.

          I am curious to know who your creditors were and the dates your settlements were completed? It could explain why you experienced what I would consider microwave results.

          • Why don’t you just tell us what you know, rather than grilling us on our details? Or do you charge for what you know?
            I settled with Chase, US Bank, a credit union, and the forth one I can’t remember right now. I did this in 2009. It took much longer to settle with HSBC that got bought by Cap One, and then got sold to a debt buyer.

          • Sonja – sounds like you must have been very fortunate with your timing, and that’s certainly an exception. Good for you. My settlements didn’t come until just before Charge Off (after 7 months of missed payments) at 20 to 40% of original balances. Cap One is still a bugger. Michael and others here know what they’re talking about.

          • Thanks Sonya. What you shared explains some things.

            Chase and USbank do offer earlier settlement opportunities than other banks. Especially in 2009 during a record settling climb for credit card defaults. Early opportunities to settle with US bank and Chase still exist today, but not in all instances, and that can change.

            Credit Unions rarely settle early, but some of the larger national ones have.

            Capital One is one I consider to be a crap shoot then and currently.

            Please know that I am replying in a manner more to inform future readers of this page, not specifically to you. You put your debts behind you already. I do this because there are far too many web pages out there with incomplete information, or details that are dated and no longer relevant. Reading a web page about settling a credit card debt with a bank in 2007, or 2009, or someone sharing their experience in 2013 from 2009, will not often be as relevant, or helpful to a reader at the moment they are reviewing web content.

            Each persons situation is different. How Chase settles with you in 2009 is different than how they may settle with Mike (the originator of this page), if he has a Chase account today.

            I do know a little bit about the subject of settling credit card debt. I do, and do not charge for what I know. I am more in the “do not charge” camp of late. And I am especially in the “no charge” category on this site.

  3. Mike – Can you confidently afford to make an estimated 1k a month payment toward the 50k of credit card debt?

    Can you come up with a strategy to raise 20k from whatever sources in a 6, 12, 18 months while not making payments on the cards if you cannot afford them, and cannot come up with 1k a month with confidence?

    Post a comment reply to those 2 questions and lets go from there.


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