We Are Living Above Our Means And Can’t Make Our Payments. – Pam

“Dear Steve,

Where to begin. We got ourselves in a huge amount of debt, around $20,000. I can’t make the payments as we are living above our means.

When we bought our house our incomes matched the house, then I lost my job and had to take a lesser paying position. My husband’s job was moved out of the country and he has been floundering since then.

I now work 50-60 hrs a week to try to make our monthly regular expenses. My husband is working very part time and will take early Social Security in July to try to bring in extra money. We lived off of our credit cards until that bottomed out. Now we are in huge trouble with creditors calling us, and don’t know where to go. I am afraid to answer phone and husband is no help at all with this. Also, have brought expenses down to a bare minimum.

Do I want to go for a bankruptcy or do I want to go for a debt management plan. I have been able to make some credit card payments, just can’t pay everybody what they want. In 3 months I will have capitol one paid off and that will free up enough to start paying on one of the larger cc.


Dear Pam,

It’s good that you recognized what it is that lead to your financial demise. Some was under your control, some not.

I think the heart of the situation right now is if you are either still using the cards to get by or you are not able to make all of the minimum payments on all the cards. It sounds like you are not able to make sufficient payments to keep everyone happy.

I would suggest that you not enroll in a debt management plan at this time. Instead, I’d like for you to make an appointment and go see a local bankruptcy attorney for a free bankruptcy consultation.

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With you already living at the bare minimum level, I think it is unlikely and unreasonable to expect you to live at that level for the next six years, which is about what a debt management plan might take. During that time, all it would take is one unexpected expense to put you behind and then all the years of debt management plan repayments would have been wasted.

If you want to repay your creditors what you can reasonably afford to, there is nothing preventing you from repaying them after you go bankrupt.

At this time in your life you need to spend the next six years saving money instead of making some payments that are unlikely to remedy the situation.


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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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