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  Dear
Dr. Don,
I have credit card debt of about $30,000, which
I am unable to pay. I spent the last year plus going through Emergency
Debt Relief, which was a big mistake. I have discontinued their
program and am now starting the first steps of Chapter 13 bankruptcy
(paperwork has not yet been filed).
 Dear
Carol,
Debt negotiators such as Emergency Debt Relief Inc. are almost always
a big mistake. The Better Business Bureau's report on this company
is particularly sobering, although all outstanding complaints have
been closed out with the bureau. To get creditors to accept pennies
on the dollar, the creditors have to have no real confidence in your
ability to repay the debt. Your credit has to be in the dumps for
the negotiator to be successful. Why pay someone to trash your credit?
You can trash your credit yourself in a bankruptcy filing and at least
benefit from bankruptcy's automatic stay provisions and the eventual
discharge of eligible debts.
In a Chapter 13 bankruptcy, you work with the bankruptcy
court to put together a plan to repay your debts over the next three
to five years. Stay current on the plan and the bankruptcy court
will discharge any remaining eligible debts at the end of your repayment
plan.
One way out, besides bankruptcy, is to sell
your home and use the proceeds to pay off the debt. Rent for a year
or two while you rebuild your credit to qualify for a mortgage loan.
I know it sounds extreme, but you avoid bankruptcy, pay off your
debts and rebuild your credit. If you can't bear to consider this
option, then it's time to talk to a bankruptcy attorney. The attorney
can advise you on the different types of bankruptcies and the one
that may fit your situation.
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