Help, I'm in an a**load of debt

The past 2 years have brought with them an ugly break-up (she kept my cat!) and 3 apartment moves (in Manhattan!). As a result of this ugly pairing and some conspicuous consumption I’ve dug myself into a bit of a hole.

It’s not an insurmountable sum, but it’s large enough so that I’m having difficulty formulating a strategy. Can anyone recommend a debt/credit counseling service they may have used?

Can anyone suggest that I quit my complaining and just pay of my credit cards and student loans? Thanks, I already thought of that.

You might want to check out the Motley Fool site. ( ) They have a really good debt reduction plan and walk you through it step by step. One of the first things they tell you to do is call all your credit cards and tell them to drop your interest rates way the hell down or you’re going to transfer all your debt to a card offering 0% that you just got a solicitation for. They also have advice for coming up with money you thought you didn’t have by teaching you to think about it a bit differently. (I remember an example they gave from their PBS special was a woman who complained she was barely getting by and had no extra money to invest. They asked her if she stopped at Starbucks ever, how often and how much she spent. She said she usually went twice a day and spent $5 each time. Well the little stuff adds up, and they showed her that was like $2000 a year right there she could save if she just drank whatever they had for free at the office.)

They also have a messageboard where you can pick other’s brains for advice.

It really depends on what bills you have exactly, and what you want/need your credit record to look like.

I do not recommend CCS actually. Bill collectors LOATHE them, and will often be highly uncooperative with the service, causing you to pay more than you might if you settled with the collection agency, or business itself.

If possible, move all credit card balances to the one with the lowest interest rate, cut up the others and don’t charge anything else. Pay at least the minimum, but you really really should try to pay more, as the minimum just lets them keep charging you interest for a longer period of time.

Student loans: These people will usually be happy to work with you. Make a commitment and stick to it.

Get a credit report from all three major agencies. See what you have there that reflects negatively, and try to take care of those first.

Call EACH one, and see exactly what you owe, with ALL the details you can get. Find out who will give you a settlement. Older bills are more likely to do this, their statue of limitations is running out, and collecting some is better than none. These bills will then show as PIF(Paid in Full) or SIF (Settled in Full) with zero balances.

Happy to help you more if needed, shoot me an email if you don’t want to post more details here.


I second what Jaade said. To a credit card company, using a counseling agency is tantamount to a bankruptcy. If you can pay them off without using one, I would recommend that. Also, keep in mind that most counseling agencies won’t work with you unless you’re 30 days behind and you have a certain amount of unsecured debt. So you basically already have to have late payments on your credit report. In my case, I have a large amount of debt, but have never had a late payment. So I’d actually be screwing my credit up more to go with them.

I do feel bad for you. I’ve also got a large debt that I’m trying to overcome - luckily, I have wonderful parents who allowed me to move in with them briefly while I put huge amounts of my paychecks every month towards my bills so that they will be paid off within a year - although I will be moving out in the fall, I will hopefully be running bail bonds for my dad (it’ll help both of us - me because I’ll make extra money and him because he’s exhausted running two businesses) and I’ve budgeted to the point that I’ll still be able to make large payments on my cards and pay my bills at the same time. Sometimes it just takes sitting down and going over everything with a fine-tooth comb. Living in NYC can easily drain one’s finances (that’s how I ran up my cards so much).

Good luck!


My wife and I followed this plan to get out of debt. We are not there yet, but very soon we will be.

  1. Cut up every credit card you own and never get another one. Debit cards will work for everything but renting a car at a minority of rental places.

  2. Save $1000 as your emergency fund.

  3. Pay off your debt from smallest to largest.

  4. Get crazy. Take three jobs. Sell your stuff. Do whatever you can to pay off this stuff. As soon as its gone you will feel better, I promise.

I can recommend reading Finacial Peace by Dave Ramsey

I second (third?) Jaade’s advice. At work we not infrequently are one-in-a-long-line of creditors when good folks run themselves into a jam. Honestly? Credit counseling services are just another frustrating layer of phone- jockeys.

Tot up what you owe. Don’t be discouraged. That’s just establishing the goal. You’ll get there. Then tot up what you earn and your truly inescapable costs: rent, food, etc. The difference is your wiggle room for your rate of payback and time.

Now get on the phone to your creditors, or go in person if possible. Be ready to negotiate. Keep in mind all of 'em would love it if you could fork over every red cent immediately but they’re also realists. The old time=money thing? Well, that has wiggle room too; more than most of them will admit readily. Here’s the reality: most creditors will accept even very modest rates of voluntary, negotiated repayment because often they’re more profitable–and dependable–than the forced recovery route. Reach out to them first. It demonstrates respect and responsiblity for the debt. You owe; they know. The problem exists, so confront it on your terms before it hunts you down. Negotiate your repayments at a level that you can handle and then stick to it, no matter what.. Honor it, even if it’s only $25 a month or whatever.

Good people fall into deep holes all the time, for all kinds of reasons. Shit happens. How they haul themselves back out counts a helluva lot more than running into a jam in the first place. Go for dependable, deliberate and willing. (Discount the bluster; you’ll probably be a breath of fresh air among the frankly irresponsible flakes.)


Great advice at this link, there is.

Just from listening to Clark Howard, I would advise you to never PAY a debt counseling company. There are real counseling groups that don’t charge large sums of money. Check his site for advice. He talks about it on the radio all the time. He mentions which debt to pay first and WHY. He even addresses student loans.

If it turns out it is within your grasp then go for it. Clark talks about the psychological aspect of it also. Don’t let it make you crazy. I can’t emphasize that enough. We just had the nicest guy at work kill himself and it was probably because his ex took off and ran his cards up. He was working 3 jobs. He was the type that couldn’t face bankruptcy. Bankruptcy is a viable solution if you are truly beyond financial redemption.

You’d be surprised what can be eliminated. cable TV, caller ID, cell phones, movies, bars.

You can rent movies from the library and drink beer at home. Make your own sandwiches for work. Make budget cooking a hobby. I would much rather spend a week reading a good library book than pay for a first run movie (you can also get movies and CD’s from a library).

You can sell crap you don’t need on eBay and buy things you do need 2nd hand. I know many people who would be considered wealthy who never buy ANYTHING new. In the long run the payoff is better bang for the buck.

Tell your friends your situation. They will understand and support you emotionally.

Finally, when you spend money, think of the hours you have to work to create DISCRETIONARY income. That is the amount you have left over when the bills are paid. If, in your case, it is only $15 a week, then you divide that by the number of hours you worked. A 40 hr week means you are working for 38 cents an hour for discretionary items. If you want to buy a frivolous item that costs $20 then you would have to work 53 hours to pay for it.