I’m Very Close to Falling Behind on My Bills. Do I Have any Options Other Than Bankruptcy? – Paul

“Dear Steve,

I have piled up over $60k of credit card debt over the past couple of years. My gross income has been in the $55k range for the past two years. I am in a business where my income should continue to grow but with minimums around $1300 per month I’m very close to falling behind on these and/or my mortgage.

Do we have any viable alternatives other than bankruptcy?


Dear Paul,

Actually you do have a number of options:

  • Increase income.
  • Reduce expenses.
  • Increase income and reduce expenses at the same time.
  • Use the debt snowball approach to pay down your debt while you can still afford the minimums.
  • Do nothing and wait for the situation to explode. It might not sound like an option but doing nothing is a choice that many make.
  • Look in to a debt management program and see if you can find some payment or interest relief there to reduce the time it will take you to get out of debt.
  • If you have some liquid cash around you might want to do a lump-sum debt settlement to get rid of some of those debts.
  • If you have equity, refinance the mortgage and take cash out to settle or pay off debts.
  • If you are not running up cards anymore, consider asking a family member for a loan to pay off the debt and then repay the debt to them under more favorable terms.

If I knew more about your situation I might be able to be more specific. But regardless, the underlying issue that needs to be addressed is what caused or lead you to increase your debt so high on the credit cards? Until you answer that, getting out of debt is secondary. We have to plug the dam first before we start pumping out water.

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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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