The hard truth may be that you can’t fulfill all of your financial commitments according to the loan agreement. Realize this and move on! For me, reaching this conclusion was the hardest part of this process. It was frightening because I didn’t know what would happen when I broke the agreement. Try to relax and take a deep breath, everything is going to be O.K..

Sometimes you just have to be creative. I had two vehicle loans and only needed one car. My father, on the other hand, was driving a ten year old Mazda B2200. Conveniently he just turned 62 and his Social Security checks began coming in. I didn’t have enough equity built up in either vehicle to sell without having to come out of my pocket. So I convinced my father to sell his old truck and take up the notes on mine. This is what we did and that freed up $300 per month, and Dad looked great in his newer Ford F-150. That helped. My student loan was financed through Sallie Mae. They have a deferment program where you can put off making monthly payments if you’re in financial trouble. So I took a 6 month break from paying them – during which time I consolidated my student loans and am currently only paying $120 per month. I would like to pay more but the consolidation loan has a much lower interest rate than BOA and Citi – they are at 32.6% remember?

I owed 11 more payments on my Mitsubishi. Since I had to have a car I decided to pay that off first. I decided to continue to pay Discover Card (for some reason they kept a lower interest rate – today 28%), and as for Bank of America and Citibank – they received a letter.

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