By Carmen Wong Ulrich

Question: I am a 37 single teacher with more than $70,000 credit card debt (incurred through a failed business attempt). I am severely delinquent in any payments (more than one year) and I am considering filing for personal bankruptcy. Are there any other alternatives?

Jennifer


Answer:  Jennifer – Usually when I get asked for 'alternatives' to bankruptcy my answer doesn't make people happy. Outside of bankruptcy, which is harder and harder to qualify for these days, for the most part you cannot get out of debts you've taken on. Federal student loans are sometimes an exception—for example as a teacher you may qualify for certain programs that will cut what you owe as long as you work in a public school. What you need to do is set up a system to pay back the debt with a non-profit credit counseling service—especially as you're so delinquent—let them help you manage what may now be some very angry collection agencies! Find a credit counselor near you through www.NFCC.org and work on a plan to negotiate with the lenders for a settlement (a bit less than what you owe) and a manageable monthly payment plan.

EXCERPTED FROM CARMEN WONG ULRICH'S BOOK

From the book GENERATION DEBT: Take Control of Your Money--A How-to Guide by Carmen Wong Ulrich. 

(c) 2006 by Carmen Wong Ulrich.  Reprinted by permission of Grand Central Publishing, New York, NY. All rights reserved.

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