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I’m Unemployed. Does a Debt Management Plan Make Sense? – Andrew

“Dear Steve,

I ran up my credit card to almost 21k after losing my job. I’ve been making payments until this month – in a couple days payment is due but I have no money.

I’m now on welfare and food stamps, but have a little money coming soon from computer editing work I’m doing currently.

I’ve thought about a Debt Management company who said they could reduce my interest rate from 16% to 7-8%. I figure my other option is bankruptcy. I don’t want to lose my computer as it’s how I make money and I really don’t have much for assets.

I’m married but would file individual. Though I do earn money sometimes, it wouldn’t be called steady as it seems is required for Chapter 13. Also looking for steady work in Maine, but hard to find – if suggested I’d be willing to work for McDonald’s to meet steady income requirements.

Should I try to work something out with said Debt Management company on my side, or is bankruptcy a better option?

Also I own a car with my wife – both on title – would that be up for liquidation?

Andrew”

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Dear Andrew,

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

Let me make this short and sweet.

Nobody wants your old computer.

Entering into a monthly payment plan with a debt management company makes no sense with minimal or sporadic income.

Talk to a local bankruptcy attorney about your state specific exemptions to protect the car.

You can click here to find a local bankruptcy attorney and talk to them for free about your specific situation. Get the facts and then you can make an informed and educated decision if bankruptcy is right for you.

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

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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