I remember the few times I’ve been completely buried in debt. Not fun. The stress… the juggling of minimum payments… the floating of checks. It can get ridiculous.
Anyway, Stephanie over at Stop the Ride recently wrote “Something Has to Change” on her blog. In the post, she explains how they’re having trouble making minimum payments. But the real kicker is that she and her husband haven’t been paying down their student loans… and the interest has been compounding every month.
If you have a moment, I encourage you to read her story and try to imagine what you might do if you were in her shoes. This kind of creative thinking can sometimes turn up good debt reduction ideas you can personally use.
I left a comment for Stephanie on her blog. Here is what I wrote:
That’s tough, Stephanie. Thanks for being so honest.
One of my clients here in Denver is a bankruptcy attorney. He offers free consultations.
If I were in your shoes, I would at least get a free consultation to explore your options. It may turn out bankruptcy really isn’t the best option. At least then you’ll know.
Another possible option is debt settlement. I’ve only read a little bit about it — but it might be something to explore.
Sounds like the student loans are the big issue. If neither bankruptcy nor debt settlement will wipe out or reduce your balance… then the value of pursuing either one is questionable.
Options for making a huge reduction in debt in one fell swoop:
1. Sell your home, then rent. Use equity to pay off debt.
2. Sell a car and make due with only one. Use equity to pay off debt.
These options aren’t available to everybody, but they do work.
The reason I came across Stephanie’s post in the first place is that both her post and mine (Outstanding Debt as of January 2009) were featured in the latest Carnival of Debt Reduction over at No Debt Plan.
A couple of the blog posts in the Carnival that stood out to me (in addition to Stephanie’s) include: