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I Would Like to Know The Best Way to Deal With My Debts. – Amanda

“Dear Steve,

Hello, I would like to know the best way to deal with my debts. I have good credit, always pay on time and my fico score is 702. My debt is due to my business closing 2 yrs ago. I have paid off at least $30,000 and still have $30,000 to go. the debt is on at least 8 cards (5 bank of america, business and personnel) In the last few months my interest rates have gone up and my credit has been cut down (my score was 725 before this happened) I am at a point where I have run out of resorces and my salary just covers my debt with nothing left over. I really dont want to mess up my credit but late payments may be just around the corner! Any advice would be appreciated.


Dear Amanda,

The most important factor here is that the minimum payments are almost out of your reach. In your situation you really have two options.

  1. Debt Management Plan – You can fill out this request form for a debt management company to contact you and find out what your monthly payment would be for the combination of creditors you have. Your interest rates may be reduced as well, the accounts will be closed and the loss of the accounts could impact your credit score moving forward.
  2. Bankruptcy – If you are unable to sustain a five year credit counseling or debt management repayment plan then throwing more good money after bad isn’t a solution at all. In that case you may need to seek legal protection from your creditors and discharge your debt under bankruptcy laws. Contact a local bankruptcy attorney you like and talk to them about how bankruptcy might be able to help. It will impact your credit but so will falling behind on your payments. Your credit can be restored following bankruptcy.

In a perfect world I’d like for you to talk to a debt management company and a bankruptcy attorney before you decide which path you will follow. The more educated you are, the better choice you can make.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out 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.

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

About the author

Steve Rhode

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.

1 Comment

  • Hey Steve,

    I agree that a DMP should be the first thing to look at, but if she finds that she does not have the cash flow to pull it off, she can consider offering a settlement to her creditors if she would like an option other than filing BK. If she is going to file BK, it certainly doesn’t hurt to make an attempt at settlement before pulling her final reserve chute.
    .-= Damon Day´s last blog ..Debt Settlement Nightmare for Phoenix Woman =-.

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