I Am Physically Sick Over My Debt. – Lynn

“Dear Steve,

severly in debt around 50000 not including mortage. Behind on all but mortgage.

Talked to lawyer,says I won’t lose the house but I am having a hard time believing it. I don;t live in it, my parents do. they help pay what they can, its not a rental. Can;t find any alternative, was even considering quitting my job so I can access my 401k. This is making me phyically sick.


Dear Lynn,

I had the following questions that I’d like for you to answer before I can answer your question. #comment” rel=”bookmark” title=”Comments Link: “>offer advice in the comments section please feel free to participate.


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.

Damon Day - Pro Debt Coach

8 thoughts on “I Am Physically Sick Over My Debt. – Lynn”

  1. Hi Steve, I have another question. I wrote you about being in debt, we talked about bankruptcy and I spoke to an attorney.( Its very scary)

    In the mean time I have been offered two huge reductions from my biggest creditors. Bank of Amer and Citi. The reductions total 25,000 the payoff is 15,000. They will give me 4months to get the money. This will leave me with about 13,000 in debt that I can pay and handle to the other 3 creditors. I would have to borrow the money to pay this, from my 401k because no one I know has that kind of money.

    My question is, is it smart. I think it is a big hit on my credit, but not as big as bankrubtcy. I also know there are tax implications, but they tell me it won’t be that bad. l All this negociation is because these account are in collection. The attorney is pushing bankrubtcy, you also suggested it., but now this offer came up and I don’t know what to do.

    I would much rather try to pay my debts but I don’t want to make things worse. I am the burning house answer you gave, you said to knock it down. I am so stessed I am going over every possible alternative to bankrubtcy because its sounds so horrible. What do you think, will I just be making things worse? I am still employed thank God so paying the other debt and 401k loan could be managable. Unless I get laid off, but that is a common risk today. They have given me 1 week to decide which makes things all that much harder. What do you think?

    • Lynn,

      The reason the attorney is also suggesting bankruptcy is because it allows you to deal with the debt while protecting your 401(k).

      At this point, you are simply trying to get someone to agree with your decision rather than accept it for what it is. You have not reached the acceptance phases you and you are stuck in bargaining.

      So how is bankruptcy worse than the 7 year black mark you are going to take from debt settlement?

      And how in the world is debt settlement going to be better if it leaves you with resulting bad credit, a potential tax liability, a drained retirement fund, a 401(k) loan that would have to be immediately paid off if you were to lose your job, and you’d still be in debt?


  2. Steve, you have answered my questions, Thank you, but I have two more. The city I live in publishes the name of every peoson who goes bankrubt. I have been at work where people know someone who makes the list., its always a joke or critisim my peers make about the unfortunate person. Sad but true!. I am afraid I am next to make the paper, is there anyway to keep it out? Also when I watched your video about your finacial trouble, I got the impression bankrubtcy was very very painful. I don’t know if my health can take all that stess. Do the creditors bager you? Does the judge belittle You?.

    • Lynn,

      You might get a nasty creditor but bankruptcy provides you with protection from that. The trustee is not going to badger you, they have too many cases to get through in a day. Nobody has time for that.

      As far as the paper publishing the names, you must live in one of the last in the country that does this. Bankruptcy filings, like any court action, are part of the public court record. If someone wanted to go look it up, they could.

      But you know what, it is what it is. Maybe if those people that cruelly tease others can put a face on the pain and misery they’d stop doing it. They are simply being cruel at the expense of others.

      Was bankruptcy painful for me, yes it was. But I didn’t have someone like me to guide me through that, slap me when I needed it, and show me the way. If I had it would have been a lot easier. That’s why I have helped people since 1994 to find a way through these difficult dark waters.

      The loudest critic in my head at the time was myself. The funny thing is that everyone who I latter told about my bankruptcy didn’t give a damn. I had only been punishing myself.


  3. Thank you for answering me. I have big problems ahead. I think I gave you the impression I am a slug, I have taken care of everyone for years, bailed many family membbers out of financial ruin and helped a lot of people at my own expense. Rarely recieved any of it back and no one is in the position to help me either. Depression, pay cut, overtime gone, serious health problems and partner income gone after he left all drove me to the evil of gambling because I was falling so far behind. I fell into the trap, and now I am stuck. My life feels like it is over. Just wanted you to know that I was not a selfish self centered person who gambled to deep dept. A lot of things contributed to it, gambling just made it an escape of hope. Leaving my job accessing my 401 k would at least get back some of my self esteem. I have lost it all. Don’t know who I am anymore its so stressful.

    • Lynn,

      I didn’t think you were a “slug”. I did get the impression that you were a good person in a bad situation who was making some bad choices in reaction to an emotional state brought on by a traumatic debt situation. Was I wrong?

      In the end, you will do what you think makes you feel better. But I can assure you, ruining your future by draining your retirement is not a solution, it simply creates a new a bigger problem for you as you get older.

      Ask yourself if you have a greater responsibility to fix the past or fix the future. The right answer is to learn from the mistakes you have engaged in, don’t repeat those, and do things better moving forward. Trashing your retirement fund does not fix the future, nor the past.

      Lynn, you screwed up. Almost everyone does at some point. You are not a loser or a slug and the greatest outcome here is that you stood up, faced the situation, took action to close the door on the past, and moved forward having learned from the mistakes of the past.


  4. The attorney thought chapter seven, but maybe 13
    my parents give me around 200.00 a month, that covers interest only ,I add what I can but lately its not much.
    I owe more on the house than its really worth, but my parents are 80, how could I lose it? Its my only mortgage. I am 55,000 in credit card debt, 5000 on my car which is current.I make 1700 a month take home. 850 towards rent leaves little to work with for other expences. Stuck in lease for 4 more months, and where would I go? If my sister didn’t buy me food, I would have nothing for the month. I can’t catch up now, late fees and penelties high. I don’t know how I will even get the money for the attorney, and the creditors are threatining now so I have to do something. Seriouly am considering quitting my job of 30 years because its the only way to access my 401 k. With some negotiation and the taxes it would cover the bills. I really am sick, the doctor told me the stress on my heart is too much. Added medical bills don’t help either.I feel it every day. Very sad, lost any joy I have for life.It all snowballed out of control.
    I had excellent credit 720 or more. Gambling addiction and foolishness got me here. Its like I just woke up and I am scared. I have lost everything I worked for.

    • Lynn,

      The sooner you come to terms that you simply screwed up and learn from that experience you can move forward with a new and better life. It would be foolish to quit your job to drain your creditor protected 401(k).

      Go get a second opinion from a second bankruptcy attorney and then pick who you want to work with and then move ahead with purpose and vigor. The sooner you embrace the process of addressing this situation rather than simply worrying and killing yourself over it, the sooner you can put this behind you.

      So what have you learned from this situation that you would do differently if you had a chance to step back in time?



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