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How Can I Wipe Out 19k in Debt Without Selling My House

How can I wipe out 19,000 in debt without selling my house? A reader has many beautiful things but also an ugly amount of debt.

When people ask me for financial advice I usually recommend many things: Credit counseling, a debt settlement program, and yes sometimes even bankruptcy. But I also spend a lot of time warning people what not to do when people are drowning in debt. It’s like they’re literally drowning.

They’ll reach for anything they think will help them stay afloat. Unfortunately very bad people out there know this. They dangle too good to be true schemes that can actually get you in deeper debt. In Anita’s case the worst thing she can do is take out a loan against her house and use it to pay off her unsecured credit cards.

That’s because if she fails to pay back to the home loan she could lose her house, but if she fails to pay back the credit cards she won’t be homeless. Instead a debt management program, or even a settlement program will probably work best for her.

It takes a little longer but slow and steady not only wins the race but it wins your financial freedom for the future.

Question: My neighbors think I have money because I have the biggest house on the block. But actually, I owe $19,000 on my credit cards!

After my divorce, I got the house. I can easily pay the mortgage, but my problem is living expenses. I have a job as an office manager, but it barely pays my living expenses. The health insurance isn’t very good, and I have several prescriptions that cost me $220 a month. (I was in an accident several years ago, and now it’s led to a chronic illness.)

Do you have any advice? Please don’t tell me to sell the house, because the mortgage payments are actually less than what rent would cost me. (We bought the house in 1999, when property values weren’t so high in this area.) 

I’m 67 years old and am worried about my future. 

— Anita in Massachusetts

Howard Dvorkin answers…

You’re facing three of the four major causes of debt, Anita. Those are: divorce, natural disaster, illness, and accident. So first of all, I want you to take a moment and be proud of yourself. You’ve persevered, and now you’re seeking professional help. Those are two admirable traits.

Now let’s dive into your situation.

Prescription drugs

This wasn’t the first item on your list, but it’s the easiest to check off. You can likely save half on your prescriptions by using a free service called GoodRx. If that sounds too good to be true — and GoodRx insists the savings can reach 90 percent — it’s not.

The company was founded by some of Facebook’s original employees and is a deceptively simple business model: Crowdsource many prescription drug users, then negotiate with the drug companies for volume discounts. Read’s report on GoodRx.

Credit card debt

The next easiest money problem to resolve is actually your biggest: that $19,000 in credit card debt. I can’t say for sure, but you might be a candidate for a debt management program. These programs can cut your monthly payments by up to 30 to 50 percent while avoiding fees.

Again, it might sound too good to be true, but DMPs (as they’re called) have been around for decades. I can’t tell you for certain if a DMP is right for you, because that requires a more detailed debt analysis. Thankfully, you can get one for free from a certified counselor at a nonprofit credit counseling agency. How do you find one? can hook you up with one that’s A-plus rated by the Better Business Bureau.

What not to do

I believe these two steps might be enough, but I want to warn you against doing too much. If you ask less-reputable people for help, you might be told, “Take out a loan against your house and pay off all your debts!”

That’s a terrible idea.

As has reported

The problem with that is that you effectively convert unsecured debt into secured debt. Credit cards are usually unsecured. As much as debt collectors may threaten, they can’t take your property without a court order. On the other hand, if you fall behind on your home equity loan payments, the lender will start a foreclosure action. If you don’t catch up, you can lose your home.

Explore GoodRx, call a credit counseling agency, and read’s report, Money Management for Seniors. You can do all that in one day — and by tomorrow, you’ll be smiling.

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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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

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