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A reader has gone through bankruptcy, debt settlement, and payday loans. Yet she's still mired in debt.

Question: I’ve been working with a debt settlement company since May 2016. They have settled six of my accounts with three more to go.

I chose not to do bankruptcy, because it was still showing on my credit report, although it was discharged in 2005. And I didn’t know if I can file again.

How I got to this point was through unfortunately circumstances and bad habits. I became addictive to payday loans, other high-interest loans, and got a car title loan just to pay other loans. Now I’m stuck with a foolish car title loan until October 2019.

The debt settlement have given me much relief. I was drowning in debt. I still have quite a bit to go, but I find myself being in the red each month. I have budget for each pay period, but I still find myself using my overdraft funds ($500 limit/$28 for each paid item).

I have cut back all my personal needs and just pay my bills. I do get an extra $200 a month for keeping my grandchild on weeknight and weekends. Sometimes, I’m over by a $100 and sometimes by $300. It depends on what has happen unexpectedly in that pay period. Those additional fee of $28 each can add up.

What can I do more to help with my financial difficulties?

— Jo in California

Howard Dvorkin answers…

Your story is complicated but not unusual, Jo. For two decades, I’ve seen Americans sink slowly into debt as if it were quicksand. They grab at anything they think will save them.  That does slow down the inevitable — but it doesn’t stop it.

Let’s break this down into smaller chunks…


If your bankruptcy was discharged in 2005, you can get it removed from your credit reports. Chapter 13 bankruptcy can stay on those reports for seven years, while Chapter 7 can linger for 10.

Here’s the catch: Bankruptcies don’t automatically drop off your credit reports. You have to request it. Here’s the step-by-step guide for doing that. I urge you do so, Jo.

Debt settlement

Debt settlement also drags down your credit score. Rebuilding that score involves more steps than doing the same for bankruptcy, simply because there are more variables — each individual debt can have its own circumstances.

That’s why you should read this report, which will give you a checklist for removing those negative marks.


If there’s any good news in your tragic story, Jo, it’s that you’ve started budgeting. I urge everyone to do that, and even offers a starting place: Build a Customized Budgeting Plan.

Of course, your budget shows you simply can’t make ends meet. So what now?

Getting professional help for free

Jo, your stressful situation is tailor-made for credit counseling. This is a free service from a nonprofit agency that puts you on the phone with a certified credit counselor. That counselor can do more for you than I can in this answer. How do you find a qualified expert? Click here: Free Credit Counseling Services.

If I were to guess, Jo, bankruptcy might once again be your best option. That might sound depressing, but credit counseling can also give you the tools to make sure this time, you emerge better off than before — and never again feel like you’re being dragged down in debt.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, 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.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched I’m glad you’re here.

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