# Is it possible to get out of this financial hole? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [October 14, 2010, 6:35am UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101 "2010-10-14T06:35:19Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [October 14, 2010, 7:47pm UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/41 "2010-10-14T19:47:46Z")
> [@Oakminster](#): > > On bankruptcy–she would not necessarily lose the house or the car. As long as she is current in the payments, she can probably do a reaffirmation agreement on both. This is essentially a contract, says even though she filed bankruptcy she will keep the property and continue to pay for it as normal. If she gets behind after entering into the reaffirmation, they can foreclose/repo as normal. > > If she qualifies for a Chapter 7 bankruptcy, she could get some good relief. Credit cards and other unsecured debt would be discharged. To qualify for a Chapter 7, she has to pass what is called the means test–basically she has to be at or below the median income for her part of the country and household size. It wouldn’t hut to at least talk to a bankruptcy lawyer about her specific situation, see if she could qualify for a 7, and discuss in detail the relief available thereunder. Right, it may not be right for them, but many Bankruptcy Attorneys will give a free consultation, and she should at least consider it. ---
**Author:** ![congodwarf](https://avatars.discourse-cdn.com/v4/letter/c/e36b37/32.png) [@congodwarf](https://boards.straightdope.com/u/congodwarf)\ **Post date:** [October 14, 2010, 7:50pm UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/42 "2010-10-14T19:50:02Z")
> [@DrDeth](#): > > Right, it may not be right for them, but many Bankruptcy Attorneys will give a free consultation, and she should at least consider it. Thank you. I didn’t know that it was possible to get a free consultation. I’m sure she doesn’t either. ---
**Author:** ![Rafe\_Hollister](https://avatars.discourse-cdn.com/v4/letter/r/fbc32d/32.png) [@Rafe\_Hollister](https://boards.straightdope.com/u/Rafe_Hollister)\ **Post date:** [October 14, 2010, 8:23pm UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/43 "2010-10-14T20:23:55Z")
“Asking a bankruptcy attorney if you should declare bankruptcy is like asking a dog if he’s hungry.” –Dave Ramsey ---
**Author:** ![Labrador\_Deceiver](https://avatars.discourse-cdn.com/v4/letter/l/7c8e57/32.png) [@Labrador\_Deceiver](https://boards.straightdope.com/u/Labrador_Deceiver)\ **Post date:** [October 14, 2010, 8:24pm UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/44 "2010-10-14T20:24:12Z")
> [@congodwarf](#): > > > [@DrDeth](#): > > > > Right, it may not be right for them, but many Bankruptcy Attorneys will give a free consultation, and she should at least consider it. > > Thank you. I didn’t know that it was possible to get a free consultation. I’m sure she doesn’t either. Let me save you the suspense: They’ll recommend filing. ---
**Author:** ![shiftless](https://avatars.discourse-cdn.com/v4/letter/s/e9c0ed/32.png) [@shiftless](https://boards.straightdope.com/u/shiftless)\ **Post date:** [October 14, 2010, 8:30pm UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/45 "2010-10-14T20:30:59Z")
It is definitely an option to ask the credit companies to lower her rate. Remember that these companies charge an unusually high rate on their “loans” and they don’t want to kill the goose that lays the golden eggs. It is also worth talking to them about reducing the amount of the debt. My son found himself in a similar situation, negotiated with the credit card company and managed to settle the whole debt for 50 cents on the dollar. Yes, it hurt his credit rating but he shouldn’t have credit anyway, as he proved. It seems wrong that he should get a bunch of stuff and not pay for it, I know, but the credit card company was also wrong to have loaned money to a person without taking the trouble to figure out if he can pay it back. They can be sloppy about that sort of thing because of the high rates they charge people like your family member. ---
**Author:** ![elbows](https://avatars.discourse-cdn.com/v4/letter/e/b3f665/32.png) [@elbows](https://boards.straightdope.com/u/elbows)\ **Post date:** [October 14, 2010, 8:55pm UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/46 "2010-10-14T20:55:57Z")
If I was them I’d do this; Call the credit card companies, tell them you are in dire straights, see no way out, rock/hard place etc. Then tell them you are headed for an afternoon appointment with a bankruptcy lawyer, but are aware that they will ask if you’ve attempted to negotiate with your creditors. Maybe let drop that you have heard that such lawyers almost always recommend filing. Be very resigned. “I know that you’re not likely to be able to actually do anything for me, but I wanted to be able to tell my attorney I’d tried.” This will stand in striking contrast to debtors who call up and whine and complain etc. Your friends may find that, suddenly, there’s a lot of cooperation coming their way in the manner of reduced interest rates, forgiven past interest, lower payments etc. Don’t jump on the first offer they pony up, hold back, it will get better. It costs nothing and is definitely worth a shot, in my opinion. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [October 14, 2010, 9:19pm UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/47 "2010-10-14T21:19:35Z")
> [@elbows](#): > > If I was them I’d do this; > > Call the credit card companies, tell them you are in dire straights, see no way out, rock/hard place etc. Then tell them you are headed for an afternoon appointment with a bankruptcy lawyer, but are aware that they will ask if you’ve attempted to negotiate with your creditors. Maybe let drop that you have heard that such lawyers almost always recommend filing. . I advise againts this, they often then take drastic steps. ---
**Author:** ![Broomstick](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/broomstick/32/246_2.png) [@Broomstick](https://boards.straightdope.com/u/Broomstick)\ **Post date:** [October 14, 2010, 9:31pm UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/48 "2010-10-14T21:31:39Z")
> [@elbows](#): > > > [@](#): > > > > individuals who issue advice that borders on commands > > What, you mean, like this… > > > [@](#): > > > > No, no, no, no, no! Do NOT get rid of reliable personal transportation! Ha ha ha - yes, somewhat like that. Of course, that _is_ my strongly held personal opinion. In many places they don’t care if you can carpool, if you don’t have access to your own personal vehicle you’re unemployable. Right now, they can’t risk becoming unemployed. ---
**Author:** ![ironbender](https://avatars.discourse-cdn.com/v4/letter/i/ba8739/32.png) [@ironbender](https://boards.straightdope.com/u/ironbender)\ **Post date:** [October 15, 2010, 3:03am UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/49 "2010-10-15T03:03:48Z")
> [@Rafe\_Hollister](#): > > “Asking a bankruptcy attorney if you should declare bankruptcy is like asking a dog if he’s hungry.” > –Dave Ramsey I think Dave Ramesy gives some very bad advice about bankruptcy. In some cases, it is the best or only option. If a person is so deep in debt that the house is being foreclosed, the car repossessed and collection agencies are suing, then their credit rating is already shot. Filling a chapter 7 or 13 won’t make things any worse. In fact, in this situation, with a chapter 13 filling, the person would keep the house and car and all the unsecured debt would be forgiven. No one would be able to sue that person or garnish their wages. Creditors can’t even call the person, which helps reduce stress and makes it easier to focous on getting back on track. It’s best to look at bankruptcy as a tool, backed up by federal law. Chapter 13 is basically a court ordered reorganization. You work out a plan and make payments to a trustee over a period of 3-5 years. Bussiness use this tool all the time, I don’t understand why there is such a stigma atttached when a person uses it. Let’s get real here, in life bad things happen to good people. Espically in this current economy. I see nothing wrong with using every tool that is available. Also despite what the radio talking head Ramesy says, a reputable bankruptcy attorney won’t tell somebody file if it’s not in that persons best interest. I’d say it’s foolish not to speak with an attorney. ---
**Author:** ![Labrador\_Deceiver](https://avatars.discourse-cdn.com/v4/letter/l/7c8e57/32.png) [@Labrador\_Deceiver](https://boards.straightdope.com/u/Labrador_Deceiver)\ **Post date:** [October 15, 2010, 3:12am UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/50 "2010-10-15T03:12:53Z")
In the situation you mention, Ramsey usually recommends bankruptcy. He usually thinks it’s a good idea if people are coming after your house. ---
**Author:** ![Sateryn76](https://avatars.discourse-cdn.com/v4/letter/s/a88e4f/32.png) [@Sateryn76](https://boards.straightdope.com/u/Sateryn76)\ **Post date:** [October 15, 2010, 4:13am UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/51 "2010-10-15T04:13:35Z")
Ramsey is also against bankruptcy for the same reason he is against debt consolidation - it does nothing to change the bad habits that got you into the mess in the first place. I also caution everyone to be careful about describing the effects of a bankruptcy filing in general terms - I worked on them for almost 15 years, and they are not something that it’s always okay to generalize about. ---
**Author:** ![Tess](https://avatars.discourse-cdn.com/v4/letter/t/e480ec/32.png) [@Tess](https://boards.straightdope.com/u/Tess)\ **Post date:** [October 15, 2010, 4:53am UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/52 "2010-10-15T04:53:12Z")
They may want to check the local churches about food. Where I used to live one church organized a monthly program where people could order basic foods (meat, rice, frozen veggies) at a discount. It was free and open to everyone, regardless of church membership. There might be a similar program near them. You mentioned they can’t carpool with coworkers due to start times, what about someone from a nearby business? ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [October 15, 2010, 5:10am UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/53 "2010-10-15T05:10:04Z")
> [@Sateryn76](#): > > I also caution everyone to be careful about describing the effects of a bankruptcy filing in general terms - I worked on them for almost 15 years, and they are not something that it’s always okay to generalize about. No, but what we’re saying is _consult an attorney_- who then will know more than general terms. ---
**Author:** ![Carnacki](https://avatars.discourse-cdn.com/v4/letter/c/b5e925/32.png) [@Carnacki](https://boards.straightdope.com/u/Carnacki)\ **Post date:** [October 15, 2010, 5:58am UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/54 "2010-10-15T05:58:15Z")
I am a bankruptcy attorney, so feel free to take what I say with a grain of salt, but I do recommend getting a free consultation with an attorney. Most, if not all, bankruptcy attorneys offer them (particular ones for whom 90-100% of their practice is bankruptcy, which I would recommend). Just be warned that not all bankruptcy attorneys will discuss the viability of non-bankruptcy options. And some attorneys, particularly ones who are part of large firms, will hard-sell the bankruptcy and try to get people to sign up on the spot. The goal in the consultation is to get questions answered, such as - would I lose any property in the bankruptcy? - does my income force me into a Chapter 13, or can I file 7 or 13? - are any of my debts non-dischargeable? - how will the bankruptcy affect me (long-term and short-term, positively and negatively)? - what are my non-bankruptcy options, and how do they affect me? So the goal shouldn’t be to find out whether the attorney thinks they should file, but to gather information so they can decide on their own. ---
**Author:** ![Quartz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quartz/32/267_2.png) [@Quartz](https://boards.straightdope.com/u/Quartz)\ **Post date:** [October 15, 2010, 9:43am UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/55 "2010-10-15T09:43:17Z")
Two work-related suggestions: Ask for overtime, not necessarily in their section. Do find out if filing for bankruptcy will affect their job. If it’s against the law for an undischarged bankrupt to hold that job (e.g. many financial jobs), it will make their situation far worse. ---
**Author:** ![Miss\_Violaceous](https://avatars.discourse-cdn.com/v4/letter/m/2bfe46/32.png) [@Miss\_Violaceous](https://boards.straightdope.com/u/Miss_Violaceous)\ **Post date:** [October 15, 2010, 11:24am UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/56 "2010-10-15T11:24:10Z")
[www.cookforgood.com](http://www.cookforgood.com). You could even make a gift of the e-book printed out and bound. It will allow them to cut way back on their food budget (which it sounds like is one area they haven’t examined closely enough, from your follow-up post) while still gettting adequate nutrition. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [October 15, 2010, 12:17pm UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/57 "2010-10-15T12:17:38Z")
To Broomsticks “picking up cans” suggestions, there are a lot of paid survey sites, MyPoints, Sunshine Rewards, etc. on the internet where its possible to pick up $10-15 a month clicking around. A garage sale would help. Really, at this point they need to do two things - cut their expenses as far as they can and try to add any revenue they can. Both those things need to go to paying down debt. The faster they can get rid of a bill, the faster those payments can go to the next bill. (by the way, I like [www.cheaphealthygood.com](http://www.cheaphealthygood.com) for eating on the cheap without eating junk). It certainly is possible. I’m no fan of Dave Ramsey as a person, but there is no denying that thousands of people in way deeper holes than this have gotten out of debt inspired by his methods. ---
**Author:** ![Quartz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quartz/32/267_2.png) [@Quartz](https://boards.straightdope.com/u/Quartz)\ **Post date:** [October 15, 2010, 3:06pm UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/58 "2010-10-15T15:06:03Z")
IIRC **olivesmarch4th** is a professional in this area. ---
**Author:** ![Broomstick](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/broomstick/32/246_2.png) [@Broomstick](https://boards.straightdope.com/u/Broomstick)\ **Post date:** [October 16, 2010, 12:13am UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/59 "2010-10-16T00:13:32Z")
> [@Sateryn76](#): > > Ramsey is also against bankruptcy for the same reason he is against debt consolidation - it does nothing to change the bad habits that got you into the mess in the first place. > > I also caution everyone to be careful about describing the effects of a bankruptcy filing in general terms - I worked on them for almost 15 years, and they are not something that it’s always okay to generalize about. Why someone is going bankrupt is an important factor. I know people who have gone bankrupt due to catastrophic illness or injury - those aren’t “habits”, they’re bad luck and tripping the circuit breaker of bankruptcy can make a lot of sense. On the other hand… if it’s bad habits that lead you into such a hole, yeah, bankruptcy doesn’t solve the underlying problem. Gotta change _that_ to really get out of the hole and stay out. ---
**Author:** ![Zebra](https://avatars.discourse-cdn.com/v4/letter/z/c0e974/32.png) [@Zebra](https://boards.straightdope.com/u/Zebra)\ **Post date:** [October 16, 2010, 7:24am UTC](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101/60 "2010-10-16T07:24:44Z")
> [@Moonlitherial](#): > > > [@ColdPhoenix](#): > > > > I disagree, she’ll be paying a lot more interest on the card than she’ll get in a savings account. If there is a true emergency she can (at a very last resort) put it on the card as she’ll have paid that money off. > > I have to agree with this. I know there is a psychological benefit to having money available to handle emergency expenses but mathematically you’re much further ahead paying off anything that has a higher interest rate than you could earn on your savings. If you can drag yourself out of debt WITHOUT reducing your credit lines that is. $1200 sitting in a rainy day fund earning no interest would be much more valuable on one of her credit cards saving her whatever her highest interest rate is. Not necessarily. Their card company may be reducing their credit limit as they pay down. So they have a card with a 5K limit. They pay off 500 bucks, then the card company lowers the limit to 4500. So they can’t put an emergency on the card. [Previous page](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101.md?page=2) [Next page](https://boards.straightdope.com/t/is-it-possible-to-get-out-of-this-financial-hole/557101.md?page=4)