I’m Retired, Sick, Poor, and Deep in Debt But I Want to Avoid Bankruptcy. – Jim

“Dear Steve,

I am 68 years old. I worked my life in the Title Insurance Business. I have a High School Education – only. I have taken classes at a University and other classes that I could sign up for and gain more knowledge. I finished my career in 2007 as I was diagnosed with Congestive Heart Failure. I owe IRS and Utah State Tax Commission around $28,000. I have been able to pay my monthly payments on credit cards and other debt with no trouble as my wife worked – she is now 59. She has lost her job – can’t find work since November 2012. She continues with unemployment but that will not last long.

I am not aware of how we can start over – at all – because work has become an issue. I only bring in $2100 in Social Security a month and live with in-laws as we can not afford rent or a house payment. I have about $21,000 in debt and make payments each month on those bills and credit cards. I am ONLY interested in “getting out of debt” and pay those who I owe – including the tax people. It is the way I am. I myself have now found an opportunity of selling auto and home owners insurance for a company – I just have to obtain my license. I should have that by the end of this month but until then the State Tax people I am having a problem to dealing with. Believe it or not the IRS is easier to deal with as I am on “non-collection” status with them right now. That could change! I also may owe a company $6,500 additional to that noted about as I co-signed for my son’s class to drive a truck long-haul. He has stopped working now – and that MAY become an issue.

That could change – but I feel like there is nothing left for me to do except bankruptcy – which I am not willing to do. There must be some way of reducing debt as quickly as possible. I am hopeful with the new employment for me can bring in around $3,500 to $4,500 a month income – which will be an additional $2,100 with the Social Security. If this makes sense I am anxious to resolve this.


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Dear Jim,

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

Your desire to avoid bankruptcy may be based in all the wrong reasons. People who feel an overwhelming need to repay can still get the benefit of the legal protection of bankruptcy and after the debt is discharged, in about 90 days, can still repay their creditors as they can afford to.

But at this point you are making an emotional decision about something that should be a business decision. That’s how your creditors are looking at all of this. Including the tax folks.

You can’t let your pride cloud the math. The reality you describe is that you are ill, struggling, and the future income is questionable. There is nothing here that would lead to a logical assumption you will be able to earn your way out of this hole.

Don’t amplify a past financial mistake with a future financial mistake. You have neither the time, health or resources to do that based on what you shared.

Before you make any more emotional assumptions let’s get the facts about what bankruptcy would really mean in your situation.

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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