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We Are Drowning in Debt And Can’t Take Another Collection Call. – Shannon

“Dear Steve,

We are drowning in debt. Our son needed braces, our house needed repairs, our credit cards and loans are out of control. We have recently refinanced our house. My husband is facing a layoff in the next couple months. We are having difficulty making the monthly minimum payments. Our debt including our mortgage is about $160,000.00.

How do we get to be debt free and be able to start living without the stress of “is that payment going to go through”,” are we going to get another call from a creditor”?


Dear Shannon,

Ironically just this morning I wrote about the three keys to deal with debt issues. They seem to fit your situation perfectly.

  • Acceptance – To accept the situation is what it is and rather than be in denial and wishing for something different. See it clearly and deal with it.
  • Action – Make the difficult decisions necessary to eliminate your debt that will lead to a better future.
  • Kindness – Even in times of pain we need to give and receive hugs, kindness, and love. We need to lean on each other and remember there is always something to be grateful for every single day.

So Shannon it sounds like your situation has been building for some time and that it is not going to get better with an impending layoff and significant income loss.

The time has come to stop ducking the situation and deal with it. This means that everything needs to be on the table for consideration. The two biggest expenses that can be changed are housing and transportation. It might be that you simply can’t afford the house any more. You might need to give it back to the bank and go rent some place. You might have to give the car back to the lender if you have a car loan and buy a crappy cheap car to get around for right now.

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Regardless, the place you need to start right now is to work this problem backwards. You need to first identify what income you do have coming in and if you had a clean slate, how could you get by on that income. Knowing your husband will be laid off you should probably estimate living on 75% of current income in case he can’t find a job paying as much as he is earning now.

Once you know how much a suitable place to live will cost and add in utilities, food, insurance, etc you can see if you have enough leftover to deal with the debt. My bet is you won’t. In that case you’ll need to look towards a more permanent solution. I assume from your email address you are in Canada.

In Canada you need to find a local bankruptcy trustee to handle your case. Once you file your bankruptcy petition you should receive a final discharge in nine months. It is a fairly straightforward process.

While bankruptcy is painful it is a beneficial process to severing the ties to old debts chained around you that you are no longer able to service due to a change in life or your circumstances.

Here is one website you can use to locate a bankruptcy trustee in your area.

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.

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