Teacher With Reduced Salary is Struggling With Bank of America and Chase Bank

“Dear Michael,

Thanks so much for providing the people with this opportunity to communicate with you!

I am writing to you to seek advice since I find myself in a desperate situation with credit card debt. I will be as brief a possible.

I am a Biology teacher and have been a teacher for the past 17 years.

My credit situation began to change back in 2008 when my salary was reduced by $7000.

With this event my monetary situation changed. I began to accumulate credit card debt. During the last years my husband’s income has been also hit, therefore, I became the head of the household (we have a 9 year old girl).

Today, I owe almost $40,000 to different creditors including $7,000 in student loan to my credit union.

I was confident that I would be able to pay off the debt, but even though I have NEVER been late on any financial responsibilities it has become harder and harder to keep up with payments….i still do pay all bills on time, but have no money left for groceries, gas, etc. it is a heavy weight to carry on!

I have been thinking of calling Bank of America (my biggest creditor) to negotiate, but I have no idea where to begin or how to negotiate.

I owe Bank of America $18000 and Chase $7000. I have been reading and my thoughts are inclined to negotiate a lump sum payment, which will require me to apply for an additional loan to cover the negotiated amount. I have requested other loans to pay off my debt without any success.

In addition, I have been thinking on visiting a bankruptcy attorney to see if I should file for bankruptcy.

We do not own any properties, nor have a have a mortgage and our cars are old and paid for. I have used my 401K savings to pay medical bills.

Where should I begin and how?
Should I negotiate a lump sum payment with creditors? Is this even possible?
Should I file for bankruptcy? Please help!
Which are the darkest consequences of bankruptcy? Even the word scares me…

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Very best regards and gratitude,


Hi Andrea,

Watch these videos about settling with Bank of America and Chase. Negotiating a lower pay off is pretty straight forward when you have the money and the timing down. The issue for you is going to be getting the money to settle. How quickly will you be able to put together roughly 10 grand to settle just these two accounts?

I am not sure settling is the right thing for you.

You may only need $1,500 to wipe out the debts in a chapter 7 bankruptcy. Settling will cost many times that, and we have not even talked about your other accounts.

Talk to an experienced bankruptcy attorney in your area and find out if you can qualify for chapter 7. If you learn that you cannot, or should not file for discharge, then we should compare settling with what chapter 13 would look like.

What are the worst attributes of filing chapter 7 bankruptcy?

I am thinking of Ving Rhames telling Bruce Willis to throw the fight in Pulp Fiction when I say… “That’s just your pride talking”. I am with Ving. Whether to file bankruptcy or not should be a math question. Pride and emotion should play fifth fiddle (if that) when it comes to putting you and your families immediate needs first. That goes for now, and long term planning too.

Your credit is going to take a hit temporarily with a bankruptcy, but that same thing happens with settlement too. And depending on how long it takes to raise the money to settle, I see people in a better position to get financing after chapter 7, than from negotiating lower balance pay offs over 2 or more years.

There is nothing dark about filing chapter 7 and getting a fresh start. To the contrary, you have been in darkness with the inability to buy groceries and meet basic needs. Chapter 7 is a step towards the light and freedom. It is something I want you to embrace, and I think you will warm up to it once you consult with an attorney and confirm you can do a chapter 7. If not, come back to this page and post an update in the comments below and we can discuss settlement further.

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