A reader and his wife make good money, but a lot of it is going to interest payments.

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the opinions and/or policies of Debt.com.

Question: I owe about $80,000 in credit card debt across something like 22 accounts. I make slightly above the minimum payment on each, but I’m probably going to be missing payments.

Between a full-time and part-time job, I make about $35K-$40K a year. I have a wife who makes a good salary, but she owes $1,000 a month in student loans. She’s in a debt management program, but I don’t know if that’s the best solution for me.

Our combined income a month (after taxes) is probably about $6,500. But my minimum credit card payments are probably above $2,000 a month, When you add the student loans, maintenance ($500), and all other expenses, we’re lucky to even make a dollar

I’ve been in contact with debt management and debt settlement companies, who have given me multiple offers. There are positives and negatives for both. I’ve also contacted a bankruptcy attorney, but my assets outweigh our debt due to my wife and I owning an apartment.

We currently have a negative balance in our account and after we get paid next week, we might still have a negative balance. I’m still not sure what is the best solution for me. Help!

— Michael in New York

Howard Dvorkin answers…

If you tell many people that your household income is $78,000 a year, they won’t imagine you’re mired in debt — especially when the median household income in this country is just over $59,000.

Sadly, what you earn has very little to do with how much debt you have. I’ve counseled millionaires who owed more than they could pay. Some have declared bankruptcy.

In your case, Michael, two debts are hurting you most. They happen to be the two most pernicious: credit card and student loans. Lucky for you, most of the country is suffering right along with you. That means it’s a big enough problem that the government and private sector have come up with big solutions…

Michael writes to me:

I have three incomes, no kids, but I have a lot of debt. I’ve learned a lot in my quarter of a century as a CPA and financial counselor. Maybe the biggest lesson is this, going into debt has almost nothing to do with how much money you make.

I’ve met millionaires who are actually paupers because they’re living larger but borrowing bigger. In Michael’s case, he’s not a millionaire but he makes well above the median income for U.S. households.

Yet, two things are dragging his marriage down: credit cards for him and student loans for his wife. They make $6,500 a month. Yet, they might have a negative balance this upcoming month.

Since he and his wife both have good incomes, no children, and no other real major expenses the first thing he should do is speak to a professional who can help him with a plan to pay down his debt. Why? Because he has options right now.

Thankfully there are programs specifically designed for credit cards and student loans. A debt management program can reduce monthly credit card payments by 30 or even 50 percent. Some of his debt may be eligible and better suited for a debt settlement program.

And the federal government has a slew of programs to reduce monthly student loan payments. How do you find help? It’s easy as visiting Debt.com. And don’t forget to sign up for our newsletters for more great advice.

What are your best debt relief options?

1. Credit counseling

This first step is the easiest. It’s also free. You simply call a nonprofit credit counseling agency and speak with a certified credit counselor. You’ll get a free debt analysis that’s so comprehensive, you’ll probably be surprised to learn exactly where all your money goes.

This is important, Michael, because you’re not even sure how many credit cards you have (“something like”) and how much debt you’re carrying (“about”). Your predicament requires specifics to solve.

Read more: What Is Credit Counseling And Why Do I Need It?

2. Debt management program

The best way to get rid of credit card debt is known as a DMP. It can reduce your monthly payments by 30 to 50 percent and freeze all your late fees.

Sound too good to be true? It’s not. Your credit card issuers will forgo much of their profits to get paid back the principle you owe them.

There are restrictions, however. For instance, you must cut up your credit cards — because you can’t ring up new charges if you owe a bunch of old ones. It can also take months or years to complete a DMP. Still, once you come out the other side, you’re financially free. Almost every DMP client I’ve known has said it’s worth it.

Read more: Debt Management Program Pros and Cons

 3. Student loans

The federal government is worried about student loans. Why? Because the total student loan debt in this country is approaching $1.5 trillion. That’s more than all the credit card debt out there — by almost a third.

There’s no DMP for student loans. Instead, there is a slew of federal programs that can cut your monthly payments, and in some cases, forgive the debt. What’s the catch? It’s the government, and the programs come with complicated names like “income-based repayment plan” and “income-contingent repayment plan.”

Knowing which plan is right for you requires some studying, but Debt.com can introduce you to some experts who can help.

Read more: Federal Student Loan Repayment Plans

4. Debt settlement

Finally, you might have the option to pay less than you owe. That’s called debt settlement, but I only recommend it after you’ve exhausted the other possibilities above.

Why? Because debt settlement severely damages your credit score, it’s a complicated process, and there are unscrupulous people out there who will try to take advantage of you.

Debt settlement is a legitimate and powerful option, but it’s also a serious one. So you should consult an expert first. Debt.com can help you.

Read more: Debt Settlement: What is It and How It Works

Bottom line, Michael: You’re not alone with this problem, and you’re not alone with the solution.

Have a debt question?

Email your question to editor@debt.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

Meet the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

CPA and Chairman

Dvorkin is the author of Credit Hell and Power Up and Chairman of Debt.com.

Ask the Expert, debt management program, debt settlement, student loans

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Article last modified on October 16, 2018 Published by Debt.com, LLC .