My Debts Finally Equal My Income. I’m Using Credit Cards to Pay Bills. – Julie

“Dear Steve,

I had paid off my debts in 2002, however since then, I had been laid off twice (different times) by different companies expanding nearly a couple of years. The credit card companies were offering low interest rates all over the place, so eventually I ended up accruing a large debt through the years since then.

My annual current salary is $30,000 and my total debts have accumulated to $30,000. I have managed to make the monthly payments but I still have to use the credit cards to do it. Then I end up borrowing again. I am at my limits. I am single, have no children, live an apartment with no assets. What do you recommend my option for getting this reversed?


Dear Julie,

It is unfortunate, bad stuff happens to good people all the time.

I think the situation has boxed you into a corner the moment you accelerated your debt by using the credit or cash advances to make ends meet. At that point the die was cast and it was just a matter of time before you hit the wall.

You have two choices. You could pursue a debt management program if you can afford your monthly minimum payments. The cards will be closed. But I believe if you think that option through you’ll realize that it’s not going to work for you.

If you’ve needed the cards just to get by and you were making the minimum payment, how are you going to make the minimum payment and not have the cards to make up the shortfall?

The only way to possibly achieve that is for you to be able to reduce expenses, increase income or a combination of both.

Outside of that, the only logical approach would be for you to consider bankruptcy. I would suggest that before you make up your mind about bankruptcy that you find a local bankruptcy attorney that you like, make an appointment for a free bankruptcy consultation and go in and chat.

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Bankruptcy would give you a fresh start, eliminate your debts, and give you a second chance at a fresh start.

The biggest tragedy from this situation would be if you did not examine what went wrong and take actions to make sure you avoid those problems again in the future. The first step is probably for you to build up a big savings account with cash you can use to coast by in case you are laid off again. No job is guaranteed.

Please update me on your progress by

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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P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

Damon Day - Pro Debt Coach

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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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