I’m 59 and Drained My IRA. What Should I Do About My Debt?


Dear Steve,

I was forced to give up my private practice several years ago and unable to find work until recently, partly due to medical reasons. I am now working but spent my entire IRA – early withdrawal, and racked up 50k in credit card debt.

My salary is way over the Ch. 7 threshold but I can’t survive and pay these bills. So far I am not behind on anything but it can’t go on. I don’t know whether I should do a Ch. 13 or “debt management,” which all over the place says is a scam. Please advise if you can. Many thanks.

What should I do that would have the least damaging effect on my credit score and enable me to actually start saving money again. I am 59 and have NOTHING!



Dear Bill,

The answer is clear, you first stop should be to speak to two or three local bankruptcy attorneys regarding your situation. It may even require you to readjust your life if you can squeeze into a Chapter 7. Income alone does not disqualify you from a Chapter 7. But you will need to discuss your situation with a bankruptcy attorney who is licensed in your state.

The pressing issue here is not your credit but the amount of time remaining until you can no longer work. Your primary focus needs to be to get back to saving and rebuilding your retirement funds ASAP. Time is not on your side and if you spend five years in a debt management plan then you are losing critical time.

Credit scores are stupid easy to rebuild. Just read this.


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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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