I’m Looking For Debt Relief Solutions. – Kathy


“Dear Steve,

We have credit card debt and an unsecured loan, they total $25,000. I looked at several debt relief places including a law office. I want to partially retire in 2 years because I have a disability and it is very hard for me to work full time. My husband was out of work for 18 months and now works less than full time and makes $4.50 less than he used to make.

What should we do to help ourselves get out of debt. Thank you for any help you can provide.


Dear Kathy,

Thank you for writing to me.

I think the answer is fairly clear based on your desire to retire in two years due to a disability.

If your income is going to drop when you retire then a debt management program does not seem like a good solution for you. You see if you enrolled in a credit counseling program now, and your income dropped before your debt was paid off, the chances are fairly high that you would be unable to make the rest of the payments.

When the debt management plan fails, it leaves you with lower balances but still in debt with debt collectors back on your heels again. For a debt management plan to work successfully you need to make every single payment on-time to the credit counseling group.

Other options might include debt settlement, where you would pay a lump-sum amount of money, as a percentage of your total debt and the debt would be closed. Typically debt reductions of 40% are available but it does hurt your credit report and there are tax liabilities as well. But at this point so close to retirement I’d be very hesitant to suggest debt settlement since it would drain some of your assets that you will need.

If you are only going to be working two more years, you have little saved for retirement, and you need to save more cash now to take care of yourself in retirement, then bankruptcy is an option.

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Out of what you have heard from others, and myself, which solution seems more appropriate for you?


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.

Steve Rhode

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