Nice guys shouldn’t finish indebted

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Dear Debt Adviser,
I am 23 and about $20,000 in credit card debt. I have a pretty good job and work all the overtime possible. Most of my debt is from my ex-girlfriend, which I know is still my fault in a sense. I also have a charge off from a friend I co-signed for … I think I’m too nice to people. So my question is, should I file for bankruptcy and take the money I have been using to pay the minimums and start saving, or should I continue to pay over the next 15 years on the minimums and live paycheck to paycheck with nothing to show for it? Please respond! I don’t know anyone with answers!

Dear HELP,
You think you are too nice to people? And you want to stiff the people who lent you money? No way!

I understand that being liked is a powerful motivator. However, my first recommendation is to not spend money you don’t have on people who seem to be more interested in your line of credit than the pleasure of your company. Your “girlfriend debt” should be looked at like a student loan. You paid some money and learned something of value. Now you need to pay the bill. Your friend for whom you co-signed — who should also be your ex-friend — has created a debt that will not go away, and it needs to be addressed. I don’t recommend a bankruptcy for you unless you have no other option. A bankruptcy can be on your credit report until you are 33 — like really old — interfering with you getting a car, a home or a job. You can do better and here’s how.

The minimum payment on $20,000 is likely between $400 and $500 per month. It will take you 15 years to pay off your debt, only if you continue to make the $400 minimum payment which decreases as you pay down your balance. Instead, if you continue to make a payment of about $450 per month until the debt is paid, it would take you only 60 months, or five years, to pay the debt if you have a reasonable interest rate of 12 percent. Remember that in order for the debt to be paid in this time frame, you cannot add any purchases to the balance.

I am more concerned about the charge off than the credit card debt. A charged off debt is one step away from being referred to an attorney for court action and then maybe a wage garnishment. I strongly urge you to contact the creditor and try to work out a repayment plan that you can afford before this debt gets any more out of control.

Many creditors are providing assistance in these tough economic times, and the only way that you will know if you qualify for help or a hardship plan is to give them a call. If there is any way to get some money back from your ex-friend, by all means go for it. To be candid, my experience with recovering money from a busted co-signing arrangement is generally zero to none. But if for no other reason than to give your buddy an honorable option, I’d give him or her one last try.

Should your creditors be unwilling to assist, you might visit with a qualified, accredited credit counseling agency (see or They will review your entire financial situation and may be able to work with your creditors to get you a decent interest rate and an affordable repayment plan in the five-year range.

Finally, I want you to begin saving for emergencies or if you like, your next girlfriend. I know you are living paycheck to paycheck, but skipping lunch out twice a week and putting the money you would have spent into a savings account is a start. That saving would translate into more than $1,000 in a year. You have a bright future ahead that you don’t need to mess up with a bankruptcy. Learn from your mistakes and you will find that in the grand scheme of things, this was only a minor setback.

Good luck!

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