I Am Barely Able to Handle My Debt. I’m Not Sure What I Should Do? – Theodore


“Dear Steve,

I have about $50,000 in unsecured debt. I am barely able to handle it. In order to pay my bills and keep them current, I have to “rob Peter to pay Paul”. All the while my debt is getting higher and higher. I have a mortgage of $1133 a month.

I am not sure what way I should go. Bankruptcy, debt relief company, just stop paying and reap the consequences later or whatever else I can do. My question to you is what are the pros and cons of each? Also, I would like your advice on whatever else I can do.


Dear Theodore,

Of the different options available like debt settlement, debt management, credit counseling, or bankruptcy, I think your options are limited.

Your money troubles have been brewing for some time and a major part of the problem is that you are having to do the “rob Peter to pay Paul” dance. Once you start borrowing from one place to pay another, generally the situation has slid so far that no less intrusive option is likely to succeed.

For example, if you are struggling to live within your income then a debt management plan may not provide you with enough relief since the generally advertised 50% payment reductions are for people that are behind and need to get caught up. If your minimum payment is $200 per month because you are behind, but it is normally $100 a month if you were current, credit counseling groups often say they can cut your payment in half when you join. Actually what happens is that you can go back to the regular monthly payment of $100 and the past due amount will be worked out over the years of your repayment plan.

But, like in your situation, if you are limping along and struggling with just the minimum payments, entering a debt management or credit counseling program is probably not going to reduce your monthly payment and that’s not going to help.

Just based on my gut reaction to your question and my years of experience helping others, my best guess is that before you decide to do anything, you really need to speak to a bankruptcy attorney and get a free consultation. You can click here for a free bankruptcy consultation with a local bankruptcy lawyer.

With the whole mugging Peter routine you’ve been running I think that if you do decide to go bankrupt, rather than having a lot of money left over each month you might just find that it eliminated the constant pressure you were feeling and allowed you to be able to pay for your necessary expenses but will still leave you needing to be very aware of you you care for your money. My bet is that you won’t have a lot left over each month, even with bankruptcy.

Let me know what you decide to do, please.


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.
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