Comments on: Ask the M-Network: What to do if you’re deep in debt

By: Ian Wilcox

Ian Wilcox — Mon, 20 Apr 2009 21:43:09 +0000

Does anyone know where I can find free online applications for student loans?

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Sun, 25 Jan 2009 23:10:45 +0000

[...] Ask the M-Network: What to do if you’re deep in debt. [...]

By: The Friday Gathering - 1 degree edition

The Friday Gathering - 1 degree edition — Sat, 17 Jan 2009 14:00:29 +0000

[...] Ask the M-Network: What to do if you’re deep in debt @ Being Frugal [...]

By: delzoup

delzoup — Thu, 15 Jan 2009 18:43:41 +0000

If your reduction in income is due to unemployment or disability, make sure that you don’t have any insurance on your debt that covers those conditions. When we found out that my dad was going to be permanently disabled after he successfully overcame brain cancer, the insurance that they had on some of their credit cards froze those cards a year, giving them some time to get ahead.

I had to use a consolidation company a few years ago. They stopped the over limit and late fees that were killing me and decreased my interest to around 5%. ( was getting $150 in fees x3 cards + 30 % interest every month). And really, this made a world of difference and made getting out of debit manageable.
There’s a lot more I would caution about using those services. I didn’t research consolidation firms well and had several problems with the service I used. For instance, they required as part of my payment that I give them a “donation” that they said was tax deductible but wasn’t. (I earned too little and didn’t own property, so at the time itemizing my deductions actually cost me more.) They also seemed to have a lot of fees, but switching consolidation companies does not impress your debtors so I was stuck with the service I had. In conjunction with my dissatisfaction of the service I used, I also didn’t realize how much work was still required of me to make the service effective. You need to follow up with all of your creditors to make sure that they accept the terms of the service–we spent months getting declined from one creditor before we realized they wanted a budget from us before they would accept the payment terms. You are still responsible for payments until the terms are accepted and you have built up enough payment with the service that they start sending out payments.
If you get to the point where you’re getting a little ahead and are able to pay more money toward your debt, pay it directly to the card instead of to the service. And also, if you come in to some cash and are close to what you owe, call the credit card company and see if you can settle. Only do this if they’re able to give you a good deal because it will be noted unfavorably on your credit.

By: pamela munro

pamela munro — Thu, 15 Jan 2009 07:01:37 +0000

There is a great book by Gerold Mundis based on the 12 Step DA System- called How to Get out Of Debt and Stay Out of Debt which goes into multiple strategies for dealing with your creditors -

By: Ken

Ken — Wed, 14 Jan 2009 21:22:14 +0000

David’s answer where he states “as to bankruptcy…no one can force you into it” is completely incorrect.

While involuntary bankruptcies are unusual they do occur, and they are perfectly legal. If a debtor has 12 or more creditors, an involuntary petition needs at least three creditors who are owed a minimum of $10,775 in total. If there are fewer than 12 creditors – aside from employees, insiders and anyone getting preferences – only one creditor owed at least $10,775 is needed.