Joe wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I had some bad luck in small business and had to use my credit cards and now I am about $50,000. in debt. I have very little income coming in right now and have about 3 months of cash left to pay the mortgage and monthly bills. I want to pay my bills,but I am or will start to have some hard times. What is your Answer? What is the best way to handle it. I might have some money coming in with my job, but I having been waiting a long time for the companies to start up, so I can make sales. I am in the insurance business and things are real slow. Let me know what you think I should do? Joe” Dear Joe, I stumbled as I read your question over your statement “had to use my credit cards ” to help fund the business. Actually, you didn’t have to use them, that was your choice. It could simply be possible that what you have worked hard to create is a business that will not be able to generate sufficient income within the time available. The business might just be a failure. This is a very difficult time to start a business for some, and a perfect time for others. What’s the difference and why do some succeed when others fail? There are lots of reason why businesses succeed or fail but a large amount of it is luck. What you can do to give yourself the best chance of success as you start a business that has a long timeline before it will pay off is to avoid all debt so the startup does not create obligations before it generates income. And if you do decide to launch anyway, then make sure you have six to twelve months of cash to sustain it without any income at all. It is just so sad to watch people sacrifice everything, put all their money into a new business and have it fold within six months. Luckily you’ve recognized the reality of your cash situation right now and you’ll need to prioritize the cash you’ve got left and pay your mortgage , utilities, food and transportation first. Without any money coming in, any money you send out now towards your unsecured creditors and credit card companies is just going to accelerate your speed towards foreclosure . The logical course of action here is to secure employment or income to bring money in. If you can do that then we can start to talk about solutions like a debt management program to get you some breathing room possibly to get you back on your feet. Otherwise, without expense reduction and no income, bankruptcy is probably in your future. Bottom line, stop funding startup business, search for income, prioritize payments to only the most important creditors and obligations. Do that first and then give me an update. Big hug. Steve Source: Joe Started His Business Using Credit Cards And Now He is in Trouble Other Related Articles to Read Therapist: Financial Infidelity Can End Couples I’m Afraid I’m Going To Get Laid Off. How Will I Pay My Bills? What Will I Do? Fear and Loathing in Debt Eleven Real Things You Should Do to Survive a Bad Economy Ben Wants To Know, “Will I Ever Get My Life Back After Bankruptcy?”

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Kim wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I’m paying credit debt on time not getting anywhere with minimum payments. Husband laid off from work 15 months. Not using cards just trying to pay off. Income is very limited. How can I get ahead with paying off cards. Income is tight. Getting behind on other bills (house, gas, electric) husband laid off from job over 15 months, now has job that pays less than half of what he had before. We’ve really cut back on everything and not getting ahead. Being frugal in hard times. Tired of stressing out all the time. Thank you for your help. Kim” Dear Kim, The issue here is that your income adjusted downwards but your expenses did not. This is a chronic problem with contracts to borrow money. Those contracts are absolute agreements and don’t make any allowances for things happening, like layoffs. Being frugal only goes so far and if you can’t manage to get the income back up, and you’ve already trimmed expenses, then maybe the time has come to start thinking about bankruptcy . Bankruptcy can be a scary experience but it is a legal tool you can use to discharge your debt so you can attempt to make whatever money you are both making manage to keep a roof over your heat, the heat on and food in the cupboards. While you are just making the minimum payments I am worried that unless you can get some breathing room in your monthly budget that all it is going to take is one unexpected and unforeseen event to through your finances in complete disarray. You should be putting at least $50 to $100 a month into a savings account to protect you from these money emergencies. Continuing to just make the minimum payments is admirable and honorable but at some point don’t you have to financially plan to protect you and your family from future emergencies by saving? It seems like the only way to do that is through bankruptcy . Please contact a local bankruptcy attorney and ask for a free appointment so you can go in and find out what bankruptcy would mean for you. Don’t be ashamed, be responsible and do the right thing to protect your family moving forward. Big hug. Steve Source: Kim is Stressing Out Trying to be Frugal in Hard Times and Make Ends Meet Other Related Articles to Read Next big worry: Credit cards Robert Wrote “I Do Not Know Where To Start Other Than I Am in Debt” This Time I Asked “Do You Think You Are a Failure When You Break Your Budget?” David Writes In “I’m About To Lose My House” David Writes In “I Have No More to Give”

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Carolyn wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I built a new home using credit card cash advances. I now have $85,000 in credit card debt and the interest rates average 25%. I can make up to $2500/month in credit payments but the interest rates are killing me. I had great credit before this issue. I have a good job and predictable income. What is the best solution for me to get these credit card interest rates below 10%? I don’t want to hurt my credit long term. Carolyn” Dear Carolyn, I think it is far too late to worry about hurting your credit. With rates like 25% it leads me to believe that you are already showing signs of being a credit risk. What in the world were you doing building a home using cash advances from credit cards . That is a horrible way to finance a home. That is what mortgages are for. First off, I never recommend that anyone get a cash advance as long as they carry any balance on a credit card . When you do have a balance and take a cash advance the interest rate on the cash advance will be much higher but the creditor won’t apply your payments towards the cash advance until you pay off the entire purchase balance first. Carolyn, the only way to lower these rates is going to be to get a mortgage . Even if you found a balance transfer deal for $85,000, which I seriously doubt, the 3% transaction fee to do that would be huge. Contact a local mortgage broker or Big hug. Steve Source: Carolyn Built Her New Home Using Credit Card Cash Advances Other Related Articles to Read Archeologists Finds 3,000-Year Old Credit Card Bill Easy Come, Easy Go: Prosper.com Hits Regulatory Hurdle American Express Customers: Don’t Try This At Home Jeff Asks About Trick To Boast Credit Score. “Will It Work?” Payday Loans and Cash Advances

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Jenni wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I am behind on my car payment. I can’t pay my rent this month. The clutch just went out on my car. I work two jobs but I can’t get to them now that my car is broken. I joined the Army but I don’t leave until January. How can I get my bills payed? How can I get out of this mess? Jenni” Dear Jenni, First, let me thank you for your commitment to entering the armed forces. No matter what role you will be playing, the courage, dedication, sacrifice and commitment are to be applauded. Your situation is a very difficult and a tough spot to be in with few good answers, but here are some suggestions. The initial fall back position is to turn to family and friends for help. They are typically the most understanding unofficial lenders to turn to in time of crisis. Next, this is when having good credit and access to a credit card is helpful. This is the actual emergency that everyone always talks about needing a credit card for. Using a credit card at a time like this allows you to use the money of other people to make ends meet. But that money has to be paid back. If you don’t have a credit card you can use and you can pay the money you need back the next time you get paid, then I would suggest a payday loan . The fees for payday loans are high but so is the cost of not being able to fix the car and get to work to get a check. Payday loans are typically used by people that are unbanked, don’t have easy access to credit cards , or need a short term loan in an emergency. You can click on this link for more payday loan information . I am not a big fan of expensive borrowing but then, I’m not a huge fan of getting evicted or not being able to get to jobs you already have, to pay the bills. Finally, if you are the member of a church or religious organization, you can always turn to them for help in your time of need. Depending on their financial circumstances, they may be able to lend a hand. Big hug. Steve Source: Jenni Can’t Make the Car Payment and is Behind on Rent and the Clutch Just Went Other Related Articles to Read Teresa Writes In And Asks “What Should I Do Next?” The Good Side of Check Cashing and Payday Loans Kayte Has Drained Her Savings And Can’t Pay The Bills Anymore Payday Loans and Cash Advances Steve Writes In “I Want to Cash Out My 401(k) And Pay Off Debt.”

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Lisa wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I am unable to make my minimum payment on my only credit card therefore, not only has my interest gone through the roof I am now over my credit limit. I don’t want to file for bankruptcy. What are my options to get this under control and get my credit card paid off? Lisa” Dear Lisa, There is no reason you have to file for bankruptcy if you don’t want to. However, your options to dig yourself out of this hole are limited. The most obvious one would be to increase your income or lower your expenses to free up enough money to make at least your minimum payment. As long as your situation continues without intervention then the massively high interest rates and overlimit fees are only going to run your debt up. Your two best chances of trying to bring the situation under control without bankruptcy at this point would be to call the collection departments at your credit card companies and ask what special internal programs they might be able to offer you to help you out. If you would rather have someone else do the work and extend special creditor terms to you then contact a debt management company ( click here ) and ask for help. Bankruptcy is always a legal options for you and even though you don’t want to go bankrupt I think you owe it to yourself to talk to a bankruptcy attorney to understand all your options. Only then will you have enough information to make a good choice about what solution will meet your needs and situation. Big hug. Steve Source: Lisa is Over Her Credit Limit, Unable to Pay the Minimum Payment, and Thinking of Bankruptcy Other Related Articles to Read Is a Credit Card a Right or a Privilege? - Personal Finance Bloggers Question of The Week Diana Is Struggling to Make Credit Card Payments And Afraid Bob Was Injured And Is Now Behind On His Credit Cards Lourdes Writes In “What Should I Do to Get Out of Debt?” Jay Got Sucked Down With The Falling Real Estate Market

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Lisa wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I am unable to make my minimum payment on my only credit card therefore, not only has my interest gone through the roof I am now over my credit limit. I don’t want to file for bankruptcy. What are my options to get this under control and get my credit card paid off? Lisa” Dear Lisa, There is no reason you have to file for bankruptcy if you don’t want to. However, your options to dig yourself out of this hole are limited. The most obvious one would be to increase your income or lower your expenses to free up enough money to make at least your minimum payment. As long as your situation continues without intervention then the massively high interest rates and overlimit fees are only going to run your debt up. Your two best chances of trying to bring the situation under control without bankruptcy at this point would be to call the collection departments at your credit card companies and ask what special internal programs they might be able to offer you to help you out. If you would rather have someone else do the work and extend special creditor terms to you then contact a debt management company ( click here ) and ask for help. Bankruptcy is always a legal options for you and even though you don’t want to go bankrupt I think you owe it to yourself to talk to a bankruptcy attorney to understand all your options. Only then will you have enough information to make a good choice about what solution will meet your needs and situation. Big hug. Steve Source: Lisa is Over Her Credit Limit, Unable to Pay the Minimum Payment, and Thinking of Bankruptcy Other Related Articles to Read Is a Credit Card a Right or a Privilege? - Personal Finance Bloggers Question of The Week Diana Is Struggling to Make Credit Card Payments And Afraid Bob Was Injured And Is Now Behind On His Credit Cards Lourdes Writes In “What Should I Do to Get Out of Debt?” Jay Got Sucked Down With The Falling Real Estate Market

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Jay wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I recently remodeled a house. I got the house for such a good deal that I had no problem using credit cards to pay for the repairs. Unfortunately, the market tanked as I was putting the house on the market. What I am left with is a $2000/mo mortgage and around $45,000 in unsecured debt. I make around $80k a year at my primary job. Can I negotiate with the credit card companies? What is the best strategy? Jay” Dear Jay, I can see the problem. Expenses that you paid for, with what you hoped would be short term credit, are now unlikely to be paid off since the home isn’t selling in this bad real estate climate. Your minimum monthly payment on the $45,000 of credit card debt is probably $900 to $1,000 a month with very little of that actually reducing the total balance you owe. As long as you are current on your bills, you will find very few real offers from your creditors to provide you with better terms simply by calling and asking without preparation and facts. But here is one approach to try. What I would suggest is using any junk mail offers that come through your door in the next couple of weeks as free market research. Pay attention to the rates being offered to you on those new credit card offers and then call your current credit card company and ask if they can match or beat that rate. If they say that they can’t, ask to speak to a supervisor and ask nicely again. But with some major creditors already raising interest rates, I’m less hopeful as I write this that the interest rate reduction trick will work. A long shot that might work is to look through the latest low rate balance transfer offers and move your debt to a lower rate card. Despite tough economic times right now, good deals on balance transfers are still available, click here for current offers . If you can’t get any satisfaction from your creditors, you could contact a debt management program and see what the current interest rate reductions are through that approach. Typically a debt management program is best used by someone that is struggling to pay the bills, wants lower interest rates, and wants to avoid bankruptcy . Entering a credit counseling program can hurt your credit but if you want reductions in payments and interest rates, then no pain, no gain. Big hug. Steve Source: Jay Got Sucked Down With The Falling Real Estate Market Other Related Articles to Read Lisa is Over Her Credit Limit, Unable to Pay the Minimum Payment, and Thinking of Bankruptcy “I’m Right There With Everyone Else” Chris is in College With His Soon to be Wife And Slipping Below The Waves in Debt Eva Has Heard Negative Things About CCCS Is a Credit Card a Right or a Privilege? - Personal Finance Bloggers Question of The Week

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Jay wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I recently remodeled a house. I got the house for such a good deal that I had no problem using credit cards to pay for the repairs. Unfortunately, the market tanked as I was putting the house on the market. What I am left with is a $2000/mo mortgage and around $45,000 in unsecured debt. I make around $80k a year at my primary job. Can I negotiate with the credit card companies? What is the best strategy? Jay” Dear Jay, I can see the problem. Expenses that you paid for, with what you hoped would be short term credit, are now unlikely to be paid off since the home isn’t selling in this bad real estate climate. Your minimum monthly payment on the $45,000 of credit card debt is probably $900 to $1,000 a month with very little of that actually reducing the total balance you owe. As long as you are current on your bills, you will find very few real offers from your creditors to provide you with better terms simply by calling and asking without preparation and facts. But here is one approach to try. What I would suggest is using any junk mail offers that come through your door in the next couple of weeks as free market research. Pay attention to the rates being offered to you on those new credit card offers and then call your current credit card company and ask if they can match or beat that rate. If they say that they can’t, ask to speak to a supervisor and ask nicely again. But with some major creditors already raising interest rates, I’m less hopeful as I write this that the interest rate reduction trick will work. A long shot that might work is to look through the latest low rate balance transfer offers and move your debt to a lower rate card. Despite tough economic times right now, good deals on balance transfers are still available, click here for current offers . If you can’t get any satisfaction from your creditors, you could contact a debt management program and see what the current interest rate reductions are through that approach. Typically a debt management program is best used by someone that is struggling to pay the bills, wants lower interest rates, and wants to avoid bankruptcy . Entering a credit counseling program can hurt your credit but if you want reductions in payments and interest rates, then no pain, no gain. Big hug. Steve Source: Jay Got Sucked Down With The Falling Real Estate Market Other Related Articles to Read Lisa is Over Her Credit Limit, Unable to Pay the Minimum Payment, and Thinking of Bankruptcy “I’m Right There With Everyone Else” Chris is in College With His Soon to be Wife And Slipping Below The Waves in Debt Eva Has Heard Negative Things About CCCS Is a Credit Card a Right or a Privilege? - Personal Finance Bloggers Question of The Week

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I’m afraid that your credit score is being used in all the wrong ways for all the wrong reasons. The credit score was originally designed as an easy way for lenders to identify which potential customers would be low risk and high profit acquisitions. Using a credit score to screen new customers allows lenders to approve or reject your application in seconds, rather than hours or days with manual screening. The uncomfortable side of credit score implementation is when your credit score is used in other unintended ways. It is understandable that the use of the score has crept into other markets. The creators and sellers of your credit score actively encourage other industries to buy your score to make decisions. But do all those decisions make sense? The way you use credit may be really smart and wise for you but hurt your score and cause ripple on effects. Even creditor actions can cause the same negative consequences for you in the cost of insurance, employment and access to health care. Credit bureaus have encouraged the use of the credit report and credit score for employment screening but there is no evidence to show any correlation between a credit score and the value of an employee. And today with credit card companies running for financial cover, their self-serving actions can lower your credit score even though you have not done anything wrong. When a creditor either lowers your credit limit to just above your balance or closes your account to limit their risk, it can have a negative impact on your credit. If you’ve had an unpleasant run-in with problem debt in the past but have now recovered and not started borrowing again, your credit score will continue to suffer. Even if you live on a cash basis and avoid credit, your score will be worse. Ironically the credit score can only be improved through the current use of credit, even if you don’t want to use credit. New and good credit use must appear on your credit report in order for you to be scored on it. Those people that only buy what they can afford and avoid credit actually have the worst credit scores. No credit is worse than bad credit when it comes to scoring you. Those that lived through a traumatic event like bankruptcy will have an ongoing and continued negative score since their credit histories essentially end with a string of bad credit and now as they live financially responsible, their lack of new credit does not help to bring their score out of the gutter. So why is the credit score so important? Well you credit report creeps into your daily life in unexpected ways. Credit reports and credit scores are used as a screening tool and a way to judge you for employment, insurance, and more disturbingly, access to medical care. More hospitals are performing a “wallet biopsy” on patients to determine if the patient can afford the medical care to be delivered. This does not appear to impact people brought into emergency rooms, broken and bleeding, but those that need additional services, like a CAT scan and specialized treatment. Hospitals that are now using sophisticated software credit scoring and financial screening tools are finding ways to flag people that were traditionally unable to pay for medical services since they were charity cases, as potential or likely to pay from retirement plans or other lines of credit. Today, a sudden and unexpected medical event can leave you broke and unable to pay. A single appointment can leave you with thousands and thousands of dollars of medical debt in a matter of hours and by using new financial screening tools, some hospitals are cruising your credit report and spotting available cash advance opportunities on credit cards and encouraging patients to take extremely high interest rate cash advances on those cards to pay for medical services that are often billed at an arbitrary and inflated cost, especially to those without insurance. The story has two sides to it. On one side is the limit to medical care that physicians have identified as necessary for the health of the patient and on the other side are the for-profit and not-for-profit hospitals that are unwilling or unable to provide medical care for those that don’t meet their scoring or screening models. Ultimately the issue comes down to a question if access to health care should be universal to all United States citizens or are we comfortable letting some people die prematurely or suffer because of their credit score . Photo: TaranRampersad & See-ming Lee Source: Disjointed Use of Your Credit Score Can Leave You Unemployed or Dead Other Related Articles to Read Bob Was Injured And Is Now Behind On His Credit Cards Mary Lou Writes In And Wants To Know “Why Does My Credit Score Keep Going Down?” Shellie Had Cancer And Is Now Slowly Dying From Terminal Debt Rachel is in Medical Debt, Was Sued And Lost. What’s Next? Eva Has Heard Negative Things About CCCS

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Bob wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, Can I ask for your advice since I’m so overwhelmed with debt. I have 4 credit cards with approximately $48,000 in balance. I’m only paying the minimum amount due per month because that’s all I can afford considering the other expenses I need to pay (mortgage, car loan bills, etc). Most of the debt here were house related since we were expecting to have our house refinanced after several months and payoff some if not all our credit card debts. But we are underwater so refinancing is not possible. The I stumbled upon your website. I’m the only one working since my wife takes care of our baby. What can I do? Please help. Bob” Dear Bob, You are drowning in debt and the only fundamental ways to change the balance of debt problems is to lower obligations, increase income, or a combination of both. Or think about it this way, lower the water level or increase your height above the water line. The technical way to get out of debt is easy, spend less than you earn. But when your income is completely spoken for and obligated, even before you bring it home, that’s a problem. The liability of debt is that in order to repay it you must work and earn in the future to meet that obligation. Currently all of your future labor has been pledged to meet those past obligations. The only way around that would be for you to get a raise, to get a second job, for your wife to go back to work and earn more than the cost of daycare for your baby, or to look at reducing or eliminating your debts. The two most mainstream approaches available to you would be to look into a debt management program and see if your credit card payments could be lowered in a debt managment program ( click here ), or bankruptcy ( click here ). Bankruptcy would allow you to get out from underneath your underwater house and discharge your credit card debt to allow you to start over. But before you do anything, I would encourage you to speak to a local bankruptcy attorney and ask for a free bankruptcy review and to speak to a debt management program provider. Only once you are armed with the facts of how those solutions will assist you can you make the best decision about which option is best for you. My gut tells me that once you evaluate both a debt management plan and bankruptcy , that bankrupty will make more sense. Big hug. Steve Photo: Chris Carpenter Source: Bob Is Underwater And Drowning, In Debt Other Related Articles to Read Government Handing Out Secret Bailout Money to Pay Off Credit Card Debts Tanisha Wants to Cash Out 401K To Get Rid Of Debts. Diana Is Struggling to Make Credit Card Payments And Afraid Terrance Says His Debt Problems Are Worse Than Anyone He Knows Kayte Has Drained Her Savings And Can’t Pay The Bills Anymore

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“Little Three” Detroit automakers seem to be consumed with fear that people would not purchase a new car from an automobile manufacturer that was or has gone bankrupt and that the fear of bankruptcy is scaring buyers away. I think this just shows how out of touch that Detroit is with the American buyer. It is not the thought of a car marker going bankrupt that is keeping people away from showrooms. Hey Detroit, maybe it is: The fear of job loss. Economic doom and gloom. Low gas mileage cars for sale. Can’t get financing to buy them. Lack of innovation. Realization that the cars that come from Detroit are full of cheap plastic. Years of not being treated like a valuable customer when a problem with the car occurs. And Detroit, before you get all high and mighty with yourself, look around, other car maker sales are down as well. Just yesterday I was sitting with my cousin who was born and bread in Detroit, who always buys Detroit made cars and even he was saying he had no sympathy for Detroit car companies. “I’ve always bought Detroit cars but not anymore, the current car I’ve got I’ve had to go after them under lemon laws to try to get my check engine light fixed. Instead of fixing it they’ve given me such grief and run around I can’t believe it. And a friend of mine had an engine go on his Toyota shortly after the warranty ran out and the Toyota dealer replaced it, no problem.” I’m not sure how giving the carmakers a bailout is going to even address those issues and Detroit, that’s the problem. If you want to make sure that people will still flock to you if you go bankrupt, which you probably should to restructure your legacy obligations, then simply create a third-party trust fund to pay into for warranty service liabilities. That would go a very long way to ease purchase worries that you think people might have. And would your bankruptcy potentially impact the retirees that count on you for full medical care, it probably would but the underlying issue here is that it is a promise that should never have been made to employees, at all. Promising employees any sort of lifelong benefit is irresponsible unless you already have the money set aside to meet that obligation. If not, then those promises were nothing more than empty promises. When I bought a new car last year, I looked at domestic cars and foreign cars, which are also made in America, and I bought a Honda. You know what, Honda could go bankrupt today and I just have ten times more confidence that they would make provisions to treat their customers with grace and consideration. I’m not sure that you guys in Detroit deserve that kind of respect and loyalty from the people that have purchased your cars and trucks over the past decade. Big Three Bankruptcy You know Detroit, you can continue to spend tens of millions in lobbying Washington and trying to paint a picture about how bailout money will hurt your workers but let’s be real here. Your financial dilemma did not just happen, it has been brewing for years. If anyone has let down your workers and retirees, it is only you. Failed and arrogant management has continued practices and ways of doing business that have lead to legacy obligations and commitments that simply can not be afforded in this economic winter. That is not the fault of the tax payer. I think taxpayers would be more willing and supportive of your case if you actually had a plan about how to money would be used to restructure your businesses and lead us forward with quality products into a new age. But what am I to think when I hear you say that in this economic climate that you are going to have to cut way back on research and development. What! It is exactly research and development that needs to be ramped up to lead us where we want to go in safe, fuel efficient cars and trucks. Hey Detroit, Lead, Follow, or Get Out of the Way . Sound familiar? Photo by Derek Farr Other Related Articles to Read Chris is in College With His Soon to be Wife And Slipping Below The Waves in Debt Government Help With Credit Card Debt So What If GM Goes Bust. Let’s Just Hope You Don’t Own a New GM Vehicle. Humor: US Solves Credit Crisis, Credit Cards Is The Government’s Financial Bailout Going To Help You Get Out Of … - WebWire

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John wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, Here is the situation. I have 50K of debt between credit cards and lines of credit and a 20k vehicle loan. When I first met my fiancee, she asked about credit card debt, I was defensive about it so i just told her that i didn’t have any. She knew I had a truck loan at the time. Then I sold a house and got 35k and spent the money on repaying some of my debt. she kept pressing me to pay off the vehicle instead so I told her that I did. So now I have the credit card debt and the truck loan and she thinks I have neither. I have created a plan to slowly pay off the credit card debt and the vehicle loan is on monthly payments I always make. I don’t know what to do, I never wanted to be in a position like this? I feel if i tell her about all my debt it would crush her. John” Dear John, It’s not the debt that would crush her, it’s your string of financial lies. Stop lying to her. If you truly love her, she deserves the honest truth from you about your situation. Otherwise there is no other way to look at the situation latter as an intentional deception and financial infidelity on your part. And as much as you may want to keep this a secret, it can come out and the most inopportune time. At some point in the future you may apply for credit together and she may see your credit report and then what, an explosion. I’ve watched good guys lose the love of their life simply because they were afraid to be open and honest about their financial situation. If you can be intimate in bed and with your love, you can be intimate about the reality of your debt. My suggestion, order a copy of your consolidated credit report using this link. You’ll be able to print it out right away. Then, as difficult and uncomfortable as it might be for you, talk softly to her and tell her you have some important information that you want to share with her because you trust and love her and want her to be your wife, forever. Then confess the truth and show her the credit report so she can see that you are telling her the full truth. Having a bottle of wine around to share during this conversation, doesn’t hurt. A marriage or relationship built on truth is better than one set on a shifting pile of sand and lies. Things might get frosty for a couple of weeks but in the end she will trust you more, respect you more and it will work out much better. Big hug. Steve Source: John is Worried His Debt Will Scare Away His Fiancee Other Related Articles to Read Therapist: Financial Infidelity Can End Couples Kayte Has Drained Her Savings And Can’t Pay The Bills Anymore Soon, Where You Shop Will Control Your Credit Teresa Writes In And Asks “What Should I Do Next?” MJ - “I’m Ill, I’ve Got Bills, And I Don’t Know What To Do”

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Chris wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, Me and my fiancee are in college my fourth year, her third and because I went without a job for about 8 months we encoured almost 10 grand in debt. Now that we are both working and trying to do the right thing we are slipping farther and farther into trouble and we no longer use any of the cards Is there any government programs and grants for people like us , I also wonder about that bailout and if that could help us out at all? Chris” Dear Chris, I get so many inquiries about government program, government grants and bailout money to pay off credit cards that I’d rip my hair out if I wasn’t bald already. The problem with the belief in government grants and free money being available to help people in trouble, like you and your fiancee, is that a bailout program sounds almost like something that could be offered. It’s not. There is no government program to pay of your debt, no bailout money to help you pay your bills and no free money from government grants to eliminate your credit cards . It is a myth. I’m afraid the real way out of this is hard work and if that does not work, consider a debt management program , and if that does not work for you, then bankruptcy . Big hug. Steve Source: Chris is in College With His Soon to be Wife And Slipping Below The Waves in Debt Other Related Articles to Read Government Help With Credit Card Debt Eva Has Heard Negative Things About CCCS Government Handing Out Secret Bailout Money to Pay Off Credit Card Debts April Wants To Know “As A Single Mom, How Do I Get Out Of Debt?” Diana Is Struggling to Make Credit Card Payments And Afraid

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Rosie wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I worked as a teacher for sixteen years. I developed disabling panic attacks which would no longer allow me to work. Soon after, I filed for bankruptcy. I later applied for social security disability in 2001 but was denied. In 2003 I was forced to sell my home in order to have money to live. I began renting an apartment with a roommate and have managed to frugally live on the proceeds of the sale until now. I was able to reestablish an excellent credit record. But my funds have now been completely depleted and my credit cards have been my sole source of support the last several months. I have nothing left, no money and no family or friends that can help in any way. I tried reapplying for social security disability recently but was denied again. All I have is some credit card credit left. But by next month, I will no longer be able to make my minimum payments, pay rent/utilities, or buy food. My roommate was just laid off and cannot help either. I am 46 years old and facing homelessness and hunger. I am completely terrified. I am a good person and have always been a very good money manager. I suffer from extreme anxiety disorder and after many years of therapy and treatment, my condition just will not go away. I do not have the money for anymore treatment, and I have continually looked for work that I can do at home, but I just have not been able to find anything. What do I do? I’m afraid I am a hopeless case. Thank you for reading this. Rosie” Dear Rosie, I’m so sorry that you are living through this situation and a resurgence of your panic attacks. Debt does not help anxiety, it intensifies it. The biggest issue is that for whatever reason, you have held off finding a solution for this terrible situation until the very last minute. Debt problems are not like a fine wine, they don’t get better with age. I understand the limiting factors of your situation with the anxiety and panic attacks. I feel for you but that does not change the fact that you have no money coming in to live on, to safely shelter yourself or to keep you warm. The reality of your situation is that once you started living on credit cards to get by, you were also living on very borrowed time. With cash gone, credit gone and soon, your apartment potentially gone, there is a good chance that you may wind up homeless. The good news is that there might be some solutions to provide advice and assistance. Rent assistance advice is possibly available through the Housing & Urban Development agency. For medical care you quite possibly qualify for Medicaid . You’ll have to contact your state Medicaid office to learn how. You may be eligible for food assistance programs, like SNAP . Job location assistance and job directories are available online . You can contact your local city or county health department and let them know your situation and see what local programs may be available. I’d explore the Social Security denial some more. The DisabilitySecrets website has some good advice on it. Just because you have been turned down, does not mean that you are either not eligible or can’t get it. It may take a fight. You can also get a free case evaluation here . Although disability claims based upon mental impairments may be harder to achieve an allowance at the initial and reconsiderations levels, these claims have a fair chance of allowance at the administrative law judge hearing. Therefore it would be sound advice to appeal your claim if you are denied at the initial and reconsideration levels of the Social Security disability process. Specific guidelines for anxiety related disorders are found in Social Security’s Listing Of Impairments in Section 12.06. According to these guidelines an anxiety sufferer must have “a persistent irrational fear of a specific object, activity, or situation which results in a compelling desire to avoid the dreaded object, activity, or situation. Or recurrent severe panic attacks manifested by a sudden unpredictable onset of intense apprehension, fear, terror and sense of impending doom occurring on the average of at least once a week”. Since the Social Security Administration approves panic attack disability benefits on a case by case basis, there is a formal application process. There are strict guidelines for average monthly income made year-to-date, case severity, and future work plausibility. However, for those stricken with debilitating anxiety and panic attacks that make work impossible, it offers a glimmer of hope and financial assistance. But even with all these helpful tips we can’t take our eye off the primary issue, the lack of income. Establishing a source of income must be the number one priority. Without income you will not have many, if any, choices. I would suggest taking a look on Snag A Job for places that are hiring, right now, in your area. Rosie, I think that if you put effort into exploring all of these options that out of it you may create at least an emergency solution that may assist you. Big hug. Steve Source: Roise Has Panic Attacks, Can’t Work, And Is Now Out of Money Other Related Articles to Read Clinton Wants to Know “Am I Doing The Right Thing By Repaying My Debt?”

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Eva wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, My husband and I just bought a home and besides the mortgage, we are in debt for $26,000. I called up my credit card companies and they said they aren’t offering lower rates to customers now. I went to CCCS website and they say lowering customers rates is one of their ways they can help out. If I can’t get the credit card companies to lower my interest rates, how can CCCS? I have also read some negative things about CCCS and other agenices like theirs. What can I do to protect my family from not being able to make ends meet? Eva” Dear Eva, Congratulations on the new house. I got you this answer for a house warming gift. CCCS or any credit counseling group offers what is called a Debt Management Plan or Debt Management Program , DMP, as a way to consolidate your debts. Many people think it is a loan, it’s not. Others think it is an easy way out of debt, not necessarily. Credit counselors are recognized by creditors to offer special terms that might involve lowering your interest rates. These terms are generally reserved for people that are having financial problems, not as a way to just lower your monthly payments. Entering into a credit counseling program can negatively impact your credit score since it is an indication that you are having financial problems. And once your creditors see or learn about your participation, your interest rates and/or monthly minimum payments could go up. A credit counseling program is paid for primarily by the creditor that pays the credit counseling group a percentage of money they collect from you and return to the creditor. I know, it sounds dangerously close to the services provided by a debt collection agency. Now, there are times to use a debt management program , especially if you are having a tough time getting by each month and if you don’t get into a debt management program then you will fall behind or go bankrupt. Nobody can give you specific advice about what terms will be offered to you in the debt management or credit counseling program until you contact the credit counseling group and ask about what terms your specific creditors typically offer. Since the terms and interest rate reductions are very important to you, I think you should contact this group and see what the current terms are. When you contact them, also be sure to ask what your creditors will do with your minimum payment when you are in the debt management plan and ask for an estimate of what your monthly payment would be. There is no reason for you to enroll or signup for a debt management plan to learn this information and while CCCS is one group that offers debt management plans, they are not the only one. Finally, a debt management plan is primarily dictated by the terms the creditors offer through the credit counseling agency and not by the credit counseling agency negotiating on your behalf. There is no negotiation. Protecting your family from not making ends meet has less to do with CCCS than it does with utilizing your money so that your most important bills are paid first. This means that your mortgage , car payment, utilities, food, etc. should be paid before you send any money towards your credit card debts. In fact, I think you should also be putting at least $100 a month into a savings account as part of your most important obligations. If you were to fall behind on your bills and creditors closed your accounts, you’d need the savings account money to help you in an emergency. Its logical and makes sense. Big hug. Steve Source: Eva Has Heard Negative Things About CCCS Other Related Articles to Read April Wants To Know “As A Single Mom, How Do I Get Out Of Debt?” Jeannie Already Went Bankrupt And Is Now With CCCS But Can’t Afford to Feed Her Daughter The Perfect Debt Assistance Program Rita Asks “Should We Consolidate Our Debt?” Tony Writes In “I Have Too Much Debt On My Credit Cards”

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