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Teresa Writes In And Asks “What Should I Do Next?”

“I have a lot of debt. I fell behind after being diagnosed with cancer. All the medical bills were paid at first but I maxed out credit cards and then took out a HELOC. The HELOC made my debt worst because it just consolidated the debt but left open credit that was used again.

Now I have a suspended HELOC with a high payment and all the credit card debt the HELOC had covered. In addition there is continued medical bills that must be paid. I’m now behind or in collections with most of my credit cards and having to get payday loans.

I tried working with a debt settlement company and they were helpful. I just don’t have the money to pay into the account due to medical cost. What should I try to do next?”

Dear Teresa,

First off let me just tell you how sorry that I am that you’ve had to live through all of this. Life for many is stressful enough but to add the threat of cancer and then top that off with debt problems, I’m sure that some days for you have been almost unbearable.

At some point you need to focus your energy on getting better and beating cancer, for good, rather than suffer under the continued stress and pressure of your financial situation. That pressure can actually make it harder to recover as the added worry and stress acts negatively against your body.

Now, I’m certainly not suggesting that anyone that has cancer should get a free pass from paying their bills. But your story is different.

You see Teresa when reading your question I went of Oh! to Oh No! I would safely guess that your current financial life is terminal and needs to be euthanized with a heavy dose of bankruptcy.

The combination of maxed out credit cards, followed by a HELOC (home equity line of credit) for debt consolidation, followed by maxed out credit cards and then a payday loan is nearly always fatal.

While a short-term cash loan or payday loan can be a valuable tool to use in certain situations, it is not a good sign at the end of the lending chain. The best time to use a payday loan is when you have a gap and need emergency cash before the next paycheck and can then immediately repay it. Using it at the end of the borrowing cycle is never a good sign.

What your story and chain of events tells me is that by the time you got to the payday loan you were totally tapped out and resorted to a payday loan to fund just a bit more, when nobody else would. Your financial hole is so deep now that it would probably take the rest of your natural life to just partially dig your way out.

It is now time to talk to a bankruptcy attorney and get a free bankruptcy review of what bankruptcy will mean for you. Speaking to a bankruptcy lawyer does not mean that you are automatically going to file but it will give you more information to judge what bankruptcy will mean in your specific case.

If you had to devote life energy towards either a goal of trying to settle the debt or move forward after bankruptcy, I’d suggest bankruptcy, strongly. And if you say that bankruptcy s not for you because you have a strong moral belief that you need to pay back your debts, there is nothing preventing you from doing that, after bankruptcy. Just because your debts are discharged it does nt mean that you can’t repay them, but now without collection pressure.

Please write back in an let me know how things go for you. I care and want to know.


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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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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