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A reader has 12 times more debt than income. He has to do something.

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Question: I have $25,000 in credit card debt and only $2,000 a month in income. I’m 75 years old. Is bankruptcy a better choice than debt consolidation?

Bruce in California

Steve Rhode, the Get Out of Debt Guy, responds…

Just on face value, bankruptcy would certainly be at the top of my list to investigate further for you. You should meet with a local bankruptcy attorney who’s licensed in your state and discuss your particular situation.

If your assets are limited or not protected in bankruptcy, just given your age and income, it would make mathematical sense if you could eliminate your debt and live on your limited income. I’m less concerned about repaying your old debt – because I’m more concerned you’ll be able to afford to live and get by from this day forward.

Talk to a certified consumer credit counselor today for an expert opinion on your best option to get out of debt.

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Why consolidation may not work for you

If you’ve consolidated your past debt, you would be repaying it out of your limited income. Essentially, you would be trying to repair the past with future funds.

At 75, while I hope life treats you well, the odds are you are closer now to an unexpected medical or another expensive life issue that you’d have to deal with. By discharging the debt in bankruptcy and focusing on living within your income moving forward, just logically that seems like a more prudent approach.

If I were to engage in some pop psychology, I’d guess your reluctance to seriously consider bankruptcy has less to do with your financial numbers than your emotional reluctance.

Should you file for bankruptcy?

Bankruptcy has gotten a bad rap. It has an unearned reputation as the last refuge for deadbeats who cavalierly run up big bills on luxury items, then decide they just don’t want to pay for what they bought. So they fill out a bankruptcy application, walk away without paying a dime, and then run up big bills again.

Of course, bankruptcy doesn’t work that way. Not even close. It’s a powerful tool for serious people, and it’s not at all easy to make happen. It’s also nothing to be embarrassed about.

Look at it this way: If you accidentally slip on a banana peel and fall on your rear end in public, that might be embarrassing. But if you seriously hurt yourself doing so, and if you need surgery to get back to full health – well, that’s not embarrassing.

Bankruptcy is financial surgery for those who have slipped and fallen, often through no fault of their own. They may have suffered a divorce, death in the family, serious illness, natural disaster, or been a victim of crime. Bankruptcy is a way to hit the reset button.

If you want to know more, and if you want a step-by-step guide, check out’s report, Should I File for Bankruptcy?

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About the Author

Steve Rhode

Steve Rhode

Rhode has been writing since founding a nonprofit in 1994 to help people get out of debt.

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