How Can I Get My Debt Under Control? – Mark

“Dear Steve,

I am married, no kids, been in my house for 10 years. Recently, taxes on the house have gone up by 100 + a month, I have about 30 K in credit card debt.

I have been researching Dept reduction programs and the like, and they scare the heck out of me with their success rate (less than 20 % ) and with the people sometimes getting sued while in their program. I have called the credit card companies many times to try and get the interest rate reduced, but due to late payments (less than 30 days) and due to the current economic climate, they are unwilling to work with me. On a standard month to month basis, I am just breaking even or paying out more than I am pulling in (The whole robbing Peter to pay Paul theory)

I looked in to the whole bankruptcy (both chapter 7 and 13) and while that might be a solution, that is pretty drastic, ruining your credit for the next 10 years, heck even going down that road, I would have to hire an attorney, and I can even begin to afford that.

With the rising interest rate of these cards, it is getting harder and harder to make ends meet on a monthly basis. And I am scared if I don’t come up with some sort of solution or ideas on how I can get this under control, I am afraid that the house and everything else I have worked for can be put in to jeopardy.

Any tips or advice would be great. I am just looking for some sort ideas to keep me from getting in to more trouble



Dear Mark,

No matter which path you elect, if you don’t make at least the agreed upon minimum contractual payments your credit is going to take a hit.

The way you afford a bankruptcy attorney is to stop making the credit card payments and save up the fee. And you said something that is a common belief, but not accurate. Bankruptcy does not trash your credit for ten years. It will remain on your credit report for seven to ten years but you can begin rebuilding your credit immediately after filing bankruptcy.

See also  We Are Confused And Not Sure What to Do to Get Out of Debt. - Penelope

You are right to be concerned but the walls have not caved in on you just yet. You still have a little time. You need to use that time by researching your options. I would suggest that rather than making assumptions about bankruptcy that you instead find a local bankruptcy attorney that you like, make a free appointment and go in to talk to them about your specific situation.

I need to get you unglued from the paralysis of analysis and tracking a real solution so you can take action soon to begin to resolve your situation.

I’m really not trying to be a bankruptcy cheerleader here, but there simply is no other solution that gives you any right or legal protection from creditors and stops all collection activity.

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.

Do you have a question you'd like to ask me for free? Go ahead and click here.

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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13 thoughts on “How Can I Get My Debt Under Control? – Mark”

  1. Steve

    (Anyone tell you that you are the best!)

    See if I can make set payments over 5 years between 600 and 750 bucks (give or take a little) that would be perfect. (and what little I have left over can go in to a savings account and be used for an emergency. It would suck to have the cards closed, but if they agree to a set amount (let’s say 700 for this example, then that will leave me enough room on a per month basis to pad a bit in a saving account and not have to worry about having a card to rely on)

    See, if it is fixed, i can plan on that and work with that, it is the ones that move around from 400 bucks a month to 510 a month and stuff like that.

    I do plan on keeping my appointment and get eveything on the table and look at everything and go with what is best for what the situation is.

    I’ll keep you updated Steve, Thanks again so much for the tips I am not sure exactly where I would be without the sound tips and info you have provided.

  2. Steve,

    Just a small update. (Cause maybe my triles would help someone else as well)

    Set up with the lawyer and they sent me a list of things to bring (Soime of the things seemed a little out ther cause I am talking to them about a Chapter 13 and not a chapter 7, Like a list of assests in the house and a time stamped copy of the house deed?

    So, I am working on that and I have a couple of weeks to go before the appointment.

    But I am still looking at options and things, cause let’s face it, filing Bankrupcy is pretty hard-core. That is a black mark against you for 7 to 10 years.

    What about places like “AAA Fair Credit Foundation” and “Money managment International”? Out of the credit consiling / DMP programs, I am not seeing too much negative things about them (But hey, that is not saying much to say the least).

    Also thinking about what my monthly re-payment would be, and I am figuring anywhere between 650 and 700 bucks a month and eveything will be satisfied within 5 years (60 months). But I am not sure if I propose that or they put it in some fort of excel spreadsheet and say “Pay this much every month”

    And finally, I have to say the wifey is more than pissed that I am even considering this. I broke down the reality of it to her, but alas you know how that can go. She is wanting me to be removed from her accounts and vise versa and talking about putting the cars in her name and stuff like that. Sheesh

    Thanks again Steve!

    • Mark,

      I understand your wife’s reaction. Yep, she’s pissed. But removing her name off stuff now is not going to change anything. Asset transfers within two years of bankruptcy are suspect and can be reversed. Best not to do any of that without coordinating it with the lawyer first.

      I know Money Management International and as far as a standard debt management plan goes they certainly have tons of experience and seem to have an efficient process. I’ve never heard of AAA Fair Credit Foundation before. But as a personal rule I tend to avoid companies that begin with AAA or Acme. LOL

      The reason I did not lean more towards a credit counseling solution in my original answer was that you had stated you were already robbing Peter to pay Paul. That tells me that there is no room for you to either save money or build an emergency fund in case you need cash since your cards included in the DMP with MMI will be closed.

      In a DMP, you would make set payments over five or so years. The issue I see is that all it will take is one unexpected event, you without any emergency fund, and the whole plan is scuppered and you land in bankruptcy anyway. But if you are willing to accept that risk then by all means, try the DMP approach first for at least three months.

      The advantage to a Chapter 7 bankruptcy is that it will give you a fresh start, allow you to learn from your mistakes, and have the opportunity to be able to save some cash for the safety and security of your family.

      I think you owe it to yourself, and your wife, to investigate both a debt management program and bankruptcy. Just promise me one thing, you won’t jump to any conclusions until you have your appointment with the lawyer. Only after than appointment will you be fully informed and able to make the best decision possible.


  3. what if you have claimed bankruptcy before about almost 6 years ago?
    I had done it and started building up my credit, things were going awsome , had an good job was paying all my bills on time, than the economy changed, the wages changed, everything changed except my bills now i am drowing again adn the rates keep you under, what options do i have now?

    • BP,

      Well if you are drowning then a debt management plan or credit counseling seems unaffordable. You can always turn back to bankruptcy again but this time it would have to be a Chapter 13 bankruptcy. Find a local bankruptcy attorney you life and go talk to them. You do have options.


  4. Steve,

    you are the best! Hate to hound you about these stupid questions, but like you stated, To say that I am nervouse and stressed about it is an understatement, but I have also come to the conclusion that this is probably the best option for me.

    Now, I guess my question is, Only I am filing, for me (Not including my wife at all), she is not going to get dragged in to this right?

    I have also prepared a sheet basically saying “this is what I pay for my mortgage, this is what I spend on the utilities, the is the monthly grocercy bill” All the little bills have been accounted for.

    So, I am preparing that stuff to bring in with me, I am also getting statements of the credit cards, along with balances, account numbers and everything pertaining to that.

    I guess my next question is, Once I file this paper work with the lawyer and she sends it off to court, I just want to make sure that the few things we do have (House car, stuff like that) aren’t going to be auctioned off,

    and I guess the bigger question I want to make sure that once I file this paperwork with the lawyer / courts that the credit card companies can’t find some way to sue me.

    And finally Steve (i know I ask too much, and I am sorry about that). What can I expect the monthly payment be back to the courts? I mean, is it going to be somewhat reasonable or something that will still make things as tough as they are now?

    Again, thank you so much for your help!


    • Mark,

      You will have to include all the debts you are responsible for individually or jointly. Your wife may be on a debt jointly with you but she does not have to file with you. So in a strict sense, any joint debt may impact her indirectly. This is not something to freak out about tight now, but to discuss with the lawyer.

      Since you are married you will need to take a full household budget with you, not just your part. If your wife filed tax returns separately, take those as well as a recent paystub for her. This is necessary for the attorney to do the means test for you to see which bankruptcy Chapter you are eligible for. The payment will be based on what is reasonable based on your income and expenses.

      Once your bankruptcy petition is filed with the court the credit card companies can’t sue you. You will be protected by the law at that point.

      At this point you need to just be nice to any collector that calls but don’t make any payment promise. You will also need to turn that worry center of your brain off for a bit. There is no need to spend time over-thinking the bankruptcy appointment, just go to it, ask every single question you have and then contemplate if bankruptcy is right for you. If your wife can go with you I strongly recommend it. It allows everyone to get all their questions asked and answered, gets the partners on the same page, and allows everybody to be fully educated and informed.


  5. Steve,

    OK, I made an appointment with an attorney for Nov 4th (That was the first time they could see me, the receptionist said that they were pretty booked).

    She gave me a list of things to bring along, and granted this is just the first consultation, but I was wondering, what else should I expect to happen, is there anything else I should prepare.

    Cause walking in to this, I am commited and I want to make sure everything goes as smoothly as it can.

    Again, thanks for the help and tips with all this,


    • Mark,

      For you this will be a nervous and stressful meeting. You are walking into strange territory. But for them, it will be an educational exercise and data gathering effort. They don’t expect you to come prepared to fill out everything but if you have it, take you last two year tax returns, a recent pay stub and recent statements from creditors showing who you owe, account numbers and balances. That will be sufficient.

      Please keep me posted on how things go. I’m here for you.


  6. Steve,

    Again, thanks for the tips, it was your artical that scared the hell out of me about those programs in the first place (Cause that was one of the steps I was considering, but with such a small sucess rate and the people getting sued, I thought it was better that maybe I should ask you and explore different options.

    Like I mentioned, I will look up an lawyer where I live, and talk to them and see how to proceed.

    Have to be honest though, I feel kind of bad being 38 years old and not knowing how to get myself out ofthis and having to maybe come to a chapter 13.

    Again, thanks for the tips and I will report back as soon as I can.

    Thanks !

    • Mark,

      Learn to forgive yourself. You made a mistake and screwed up, you didn’t kill anybody or leave someone on the side of the road for dead. You are no more to fault than the farmer that borrowed money for seed and it didn’t rain the next year.

      Shit happens. This does not define you, unless you let it.

      Even in the midst of all of this there is still a tremendous amount to be grateful and thankful for.


  7. Steve,

    Thanks for the words of wisdom and I will start researching lawyers starting tomorrow.

    I guess if I travel down this road, I need to ask,

    I have no problem filing a Chapter 13, I want to pay the debts off, but with thier rising interest rates (Most of my cards have gone 5.99 % to 28.99 % in the last 6 months or so, and most of the “Change In terms” agreements claimed due to economic climate).

    but with Chapter 13, is the house and the cars and the household assets (Everything from the few stocks we have to the TV’s), is that stuff safe (IE: The courts won’t force me to sell it)?

    I have read conflicting reports that I have to seek Government approved Credit counsling first, and that this should be done before anything is done. Then I have read some things “Well, not so much a requirement, but a decent enough idea”.

    There has been no collection activity started (There is no bill that is past 30 days), but is not paying a credit card payment to save up for the attorney fee a good idea? I would think that would give them cause to hound you in to the ground.

    To say that I am concerned is an understament, I feel more like I am choking. And while I am only like 300 behind, I am sincerly afraid that this is about to get out of control.
    Again, thank you so much for the tips and I will continue to come back to update.

    • Mark,

      By the time someone comes to the gates of bankruptcy it is already too late for a successful credit counseling solution. I would suggest you meet with the bankruptcy attorney first and then the attorney will direct you to a counseling group to take your court ordered BS pre-bankruptcy counseling session.

      In a Chapter 13 you will keep your house and car. You will make the regular payment for those items as you do now.

      For a bit more enlightenment, take a read through The Truth About The Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy.

      Make your appointment, talk to the attorney and report back. You don’t need to file bankruptcy to meet with the attorney and educate yourself. Small steps grasshopper.



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