ZipDebt Debt Relief

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Charles Phelan

Debt Settlement in 2026 – Memo to New & Former Clients of ZipDebt!

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Way back in 1997, I settled my first consumer debt account on behalf of my very first client, long before “debt settlement” became a normal approach to eliminating toxic debt levels. Over more than a quarter of a century since then, I’ve been privileged to help thousands of people tackle their debt crises and move forward into debt freedom. As we reached the years of the Great Recession (2008 to 2010), my workload exploded and I found myself busier than ever. One of the things that has surprised me the most in recent years is the number of folks returning for help, in debt all over again.

How can that be? Doesn’t debt settlement permanently wreck your credit score? No, it doesn’t! It causes the score drop steeply, but only temporarily. That’s because the banks and lenders out there WANT to get you into debt again, NEED to have you paying sky high interest rates in order to return a profit to shareholders. That is just the way the credit world works. So when I’m doing a consultation with someone and they ask me about credit damage, I try not to laugh. “Do not worry about getting credit again later on,” I tell people. “You should be far more concerned about getting back into debt all over again and becoming a repeat client.”

Now, having said this, I want to immediately correct the false assumption many will make. The vast majority of consumers I’ve worked with did not get deeply into personal debt because they were foolish, poor at managing money, or went crazy with spending. No, they got into debt because LIFE happened. One partner lost their job and was out of work for a while, when the budget was tight to begin with, so the debt piled up. Or a medical crisis happened, impacting the ability to work and earn money. Divorces are another frequent cause of financial devastation.

Yes, of course there are people who get into debt because they cannot control their spending, or because they have a gambling addiction. But this is only a small fraction of the consumers who struggle with a mismatch between income and expenses, leading to mounting levels of personal debt.

I have two main motivations in publishing this blog post. First, I’m still here in 2026, helping consumers with my Tailored Debt Settlement approach to managing excessive debt. Second, I want to encourage my former clients to reach out if they need help again, without shame, fear, or embarrassment!

What prompted this is a recent situation where a former client had gone through the debt settlement process with me in 2016. They successfully settled all of their accounts, and yes, got their credit back in subsequent years. Then life happened once more, another set of emergency situations arose, and they got back into debt all over again. This scenario is a good illustration of what I was discussing above. The credit damage from the prior round of settlement was not a permanent stain, just a set of temporary blemishes. In more recent years, obtaining new credit was no problem, and then they fell deeply back into debt due to a variety of medical crises and family emergencies.  

The reason I’m focusing on this particular case is because the client in question was so deeply embarrassed by having gotten back into debt after working with me, they decided to hire one of the large debt settlement firms that saturate the Internet with advertising. It was a disaster, as expected. The company settled one account, let the others spin, and then the lawsuit threats started. People need to understand that the big debt settlement firms IGNORE LAWSUIT RISK to their clients. They do not care, period!

Gradually, I was able to work with this consumer to extract them from that difficult situation, help them take over control again of the debt accounts, and then put a plan in place to handle that mounting risk.

If you are a former ZipDebt client who needs help again with burdensome personal or business debts, just reach out to me! Please DO NOT BE EMBARRASSED. I won’t judge you, criticize you, or scold you for needing help again. I understand that debt can get out of control for many reasons. If you would like to discuss your current debt situation, please submit a consultation request via the form displayed on this page or email me via [email protected].

Debt Settlement in 2025 and Beyond!

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Today is March 27, 2025, which sounds like a science fiction date to this old guy. But I’m still here providing debt settlement services in 2025. I’m still helping consumers struggling with unsecured debt obligations. With the ongoing uncertainty over inflation and the economy, it’s more important than ever for people to have reliable truthful information on debt relief options.

I settled my first debt for a client in 1997, and it’s hard to believe that was 28 years ago! I was one of the first to offer debt settlement for consumers. In those days, debt settlement for consumer debts was brand new. I remember talking with longtime debt collectors who did not even understand what a settlement entailed!

Over the past quarter of a century, I have helped many thousands of consumers face up to their debt issues and seen millions in debt get resolved through negotiated settlements. I’ve also seen the debt settlement industry go through massive turmoil, with changes that have shifted things far more in favor of the debt companies than the folks they are supposed to be helping.

Why I’m Not a Fan of the Debt Relief Industry at Large

I’ve been a part of this industry for a very long time, but I remain pretty disgusted with the manner in which the large debt settlement firms operate. There are several reasons for this. The large companies tend to downplay the LEGAL RISK consumers face from collection lawsuits. Nor do they help manage that risk very effectively. In fact, they add to the risk by using outdated tactics, like sending out notices too early to creditors.

They also try to persuade people that “bankruptcy should be avoided at all costs,” which is very bad advice. Why? Because Chapter 7 bankruptcy is GOOD, and Chapter 13 bankruptcy is BAD. There is a world of difference between a bankruptcy filed under Chapter 7 vs. Chapter 13, yet you will search debt settlement company websites in vain for any discussion of the crucial differences.

The reason they do that is because they aim for the largest volume possible of enrolled clients. Since about 7 out of every 10 people who file bankruptcy are eligible to simply wipe out the debt under Chapter 7, they don’t want to exclude that potential pool of prospects. Sadly, that means they are pitching their program to people who would actually be better off in bankruptcy.

The simple truth is that Chapter 7 is almost always a better option than debt settlement. It is primarily people facing a protracted FIVE YEAR bankruptcy petition under Chapter 13 who should be considering debt settlement instead.

Be Careful When Comparing Fees for Debt Settlement Services

The above problems are bad enough, but then there is the RIDICULOUS FEE STRUCTURE established by the larger companies. Most of them charge a fee that’s a percentage of the debt balances enrolled in the program, typically in the range of 20% to 30% of the debt. The problem here is that this fee method removes any incentive for the company to even bother negotiating a better outcome. If you are going to make the same amount of money regardless of how much or how little work you put in, and no matter the actual result, human nature means that you won’t probably go the extra mile to help out a client.

The best debt settlement fee structure for YOU (i.e., the client) is one based on a percentage of the SAVINGS achieved through the negotiated settlement. In my practice, I charge a very reasonable 20% of the savings off the enrolled balance, and NOT a percentage of the debt itself. Run a few examples through a calculator, and you will quickly realize that this method creates a win-win scenario between the service provider and the client. It also means far more of your hard earned money going toward resolving the debt balances keeping you awake at night, and less going toward paying the marketing costs for some debt company!

Settlement is What the Banks Do Anyway

In 1997 I started in the debt settlement business as a one-person consulting practice with the aim of helping local clientele in San Diego. It quickly became clear to me that settlement is what the banks do to reduce losses on defaulted debts. In the year 2000, I joined the country’s first large scale debt operation and increased their client base from 40 customers to more than 4,000. As I worked on scaling up the company, I learned about all of the problems that a volume approach creates. I also learned that the banks were not very pleased with the existence of debt settlement companies!

I left that firm in 2004 and set out on my again. I created an 8-hour audio training seminar that taught people how to settle debts on their own, minus the big fees. Then in 2016, I went back to offering full service debt settlement again, primarily because I had observed that most people wanted a level of support that exceeded what I could offer through simple education and coaching.

It’s now 2025 and debt settlement is no longer something new or different in the financial world. In fact, the only reason that debt settlement companies exist is because the BANKS are still the ones who want to settle. They do that for two reasons — to reduce a loss that they are about to write off due to non-payment, or to recover against a loss already taken. The basic concept of the “bird in the hand” is what drives debt settlement. None of this has changed in the past 28 years.

However, the basic principle that banks or creditors want to reduce losses or recover against them does NOT mean they tend to make it easy on people to settle. That is where a professional service like ZipDebt.com and my superior Tailored Debt Settlement method comes into play. When your day to day business is negotiating settlements, it’s possible to see the landscape from a higher altitude, and thereby take most of the guesswork and uncertainty out of the process.

Debt Settlement in 2025 and Beyond: Cash Loans & Lawsuit Risk

What’s new in 2025? Two major factors are very different now in the debt settlement space, and consumers need to be aware of these developments:

1. CASH LOANS: Large balance personal loans reaching charge-off faster and potentially blowing up an old fashioned approach to debt settlement planning.

2. LAWSUIT RISK: The risk of being sued is far higher now, with all the major creditors being more aggressive and using collection litigation to recover.

Let’s discuss these two key factors in a little more detail.

First, it used to be that ALL of the debt included in settlement programs was credit card debt issued by the top credit grantors (Chase, Citibank, Bank of America, Wells Fargo, U.S. Bank, Discover, etc.). It was very rare to see a personal loan included in the mix. But since the Great Recession of 2008-2010, a different class of creditor stepped up to fill the lending gaps that opened up when the banks started getting more careful about granting credit. We are talking about lenders like SoFi, Upstart, Upgrade, Best Egg, Lending Club, Prosper, and others. The balances tend to be higher on these loans, $15,000 up to $100,000, compared to typical credit card balances in the range of $5,000 to $15,000.

One important thing to understand is that personal loans will reach the charge-off deadline after only FOUR MONTHS of delinquency, compared to six months for credit card debt balances. The shorter timeline to writing off the debt means things move faster on personal loans, with risk mounting much more quickly. Larger balances also justify the expense of pursuing recovery more aggressively. And nowadays it is very common to see a lender sell the account right after charge-off to a debt purchaser. These debt buyers routinely use litigation to force consumers to resume payments on a debt.

No Sugar Coating: Getting Sued is a Genuine Risk

Creditors in general are getting AGGRESSIVE again, with most of the major banks moving to collection litigation far earlier in the delinquency process than in previous years. It used to be that out of a dozen or so major credit card banks, perhaps ONE of them was being aggressive at a time, so it was easier to help people manage the risk they were facing. The others would eventually get around to escalating, but not for many months, sometimes a year or more. Not anymore! Now they are almost all being aggressive.

Without CAREFUL RISK MANAGEMENT layered into the process, unsuspecting consumers are going to find out the hard way that traditional debt settlement programs will be less and less helpful at managing unworkable debt loads.

The bottom line is that debt settlement remains a viable solution in 2025 for avoiding Chapter 13 bankruptcy, but thorough ANALYSIS and PLANNING are required up front. This is simply not possible using the cookie cutter one-size-fits-all approach employed by the larger debt settlement firms. My goal here at ZipDebt.com is to provide unfiltered advice based on what is happening in the real world of debt settlement in 2025. If I don’t believe you are a good fit for this approach, I will tell you that point blank rather than try to “sign you up” to my program.

If you are struggling with out-of-control debt, please feel free to EMAIL ME AT [email protected] with some information on your situation. Tell me how much debt you have and what banks or lenders you owe it to. We’ll review your situation together to figure out whether or not debt settlement makes sense for your financial scenario.

ZipDebt Debt Relief — MAJOR ANNOUNCEMENT FOR 2020 and COVID-19: Full Service TAILORED DEBT SETTLEMENT Available for Select Clients, Do-It-Yourself Coaching & Services No Longer Offered

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ZipDebt is no longer offering do-it-yourself debt relief coaching or the audio seminar launched in 2004 to help consumers with negotiating settlements on their credit card debts.

Full Service Debt Settlement is available via my Tailored Debt Settlement Program for selected clients only. Please note that an application is required and I do not accept everyone who applies into my program due to limited capacity.

My name is Charles J. Phelan, and zipdebt.com is my longtime website portal, active since 2004. I go back to 1997 as one of the very first professional debt negotiators assisting consumers to settle their unsecured credit card and personal debts. In 2000, I helped to build one of the nation’s first large scale debt settlement companies, but I didn’t like the greed-oriented trend on fee gouging within the debt relief industry, so in 2004 I set up zipdebt.com to provide low cost services.

Since launching ZipDebt in 2004, I’ve personally helped many thousands of consumers to deal with their creditors one-on-one, and I’ve collected numerous testimonials from satisfied clients.

For many years, I only offered DIY-with-coaching services, but in 2016 I finally went back to providing full service negotiation support via my proprietary method, which I call Tailored Debt Settlement.

As of May 1st, 2020, I will no longer be offering paid consultations, the audio seminar, coaching support for do-it-yourself debt settlement, document review services, or free 20-minute consultations. My rationale for making this major change in my business model has to do with several key factors.

  • After 23 years in the debt relief space, and at the age of 62, it’s been a long and difficult grind to offer these services year after year, all by myself, with virtually no support staff for the coaching process. I want to work a little less intensely than I have been for the past two decades, and honestly I would rather be out hiking the forest trails in the beautiful San Jacinto Mountains where I live!
  • Compared to when I was literally the Lone Ranger of DIY Debt Settlement, today there is a ton of free information online to help consumers who wish to settle their debts without professional assistance, and over time it’s been difficult to sustain the original business model that ZipDebt was built around.
  • Further, in recent years the process of negotiating settlements has become more technical and involved, especially with respect to the need for precision timing of the entry points for negotiation. Consumers on their own can still be successful at the DIY approach, but it’s trickier to manage legal risk than it was in the “good old days,” and with several aggressive debt buyers operating now in this space, it’s even more of a challenge than before.
  • After the Great Recession of 2008, I was flooded with an astonishing amount of new inquiries and the demand for DIY debt relief coaching went through the roof. I was working 12-14 hour days trying to keep up with all the activity. As a consequence of the COVID-19 pandemic crisis, I’m quite certain that later in 2020 or early 2021 a new tidal wave of activity will occur, by consumers seeking help with their debts.

Based on all the above factors, I’ve decided that now is the time for me to pare back my service offerings, and focus on a select group of clients that have high odds of being successful implementing the debt settlement approach. I’m still here, and I’ll still be helping as much as possible, but I will be taking on fewer clients under this revised business model than I had been previously.

If you want professional help from a provider that cares just as much about helping you manage your risk as saving you money (or earning fees!), please read my 5-page series on Tailored Debt Settlement. If you like what you read there, then email me your application, which must include a list of the debts you’re looking to settle, some background explanation on your financial situation, and a forecast on your available funding for settlement negotiations.

Many thanks to the thousands of Americans who have trusted me to help with their debt situations over these past 23+ years. I look forward to doing my small part to help our country get past this crisis and move forward again. Stay safe out there, and best wishes to all.

Insolvency Calculator for IRS Form 982 Available, Updated for 2016!

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If you settled a debt in 2016 (or prior years) and had more than $600 forgiven by a creditor, you will be receiving a 1099-C for “Cancellation of Debt Income.” That “income” has to be treated as ordinary income like your paycheck, unless you have an exemption for “insolvency.” In other words, if your net worth was negative at the time the debt was forgiven, then you can offset the 1099-C income up to the amount by which you were negative, or insolvent.

Calculating insolvency can be a tricky process, and the IRS form used to claim the exemption is the notorious Form 982 — affectionately called “the tax form from Hell” due to its complexity. Consumers often waste countless hours trying to decipher the meaning of phrases like, “interest in a pension,” “reduction of tax attributes,” or figuring out how to handle a series of 1099-Cs rather than a single 1099-C.

ZipDebt’s IRS Form 982 Insolvency Calculator solves all these problems and provides instructions in plain English on how to calculate and claim insolvency. In the User Manual, you’ll find answers to common questions about handling multiple 1099-Cs. The calculator is an Excel based spreadsheet, and the User Manual walks you through everything you need to understand. The cost is only $29, and this calculator will save you many wasted hours and frustration. The product has been updated for the 2016 tax year.

Debt Settlement Success Seminar Now Available in Digital Version!

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In 2004, I launched zipdebt.com to teach consumers how to negotiate their own debt settlements and avoid the sky-high fees charged by so-called “debt relief” providers. My training course, The Debt Settlement Success Seminar, which forms the education core for all my coaching programs, has always been delivered in the form of a physical kit. The kit has consisted of the seven audio CDs, one CD-ROM, and the printed Workbook, all packaged together in a single binder for easy reference.

While the program has been well received and highly praised by consumers and industry experts alike, I wish I had a dollar for every time a client asked me, “Do you have the training course available for digital download?” I’ve always had to answer no, the main reason being I did not have the technology in place on the website to properly serve digital files to customers. If you’ve never had the pleasure of managing an active website “storefront” for a nationwide online business, let me tell you that just keeping up with software changes can be a full-time job in itself!

Suffice to say, I was simply too busy with coaching clients, writing new articles, and answering questions on my blog to make the transition from physical to digital product. So it’s certainly long overdue, but the job is finally done and I now have the system in place to serve digital files instead of having to ship physical CDs.

I am very happy to announce that the digital version of The Debt Settlement Success Seminar is now available for instant download. All the audio files have been converted to MP3 format and placed in zipped folders for fast download. The physical version of the training seminar will be discontinued soon, and I will be delivering the same great content exclusively by digital download instead.

Clients ordering the Basic, Enhanced, Premium, or Premium-Business Program will be able to start listening to the course material IMMEDIATELY after completing the purchase. Those who still prefer physical CDs will be able to burn their own from the downloaded MP3 files. Also included with the download is the Workbook printed material in PDF format. So the digital version of the Debt Settlement Success Seminar contains ALL the information provided in the physical version.

Please bear with me during this transition, as there are still some remaining references to the physical version of the product in the free report downloads, as well as various pages on the website. Until I’ve had a chance to finish updating all the corollary materials that reference the physical CD set, I will be offering both the physical and digital versions for purchase in the shopping cart.

If you have any question about which version to order, feel free to email me at [email protected].

Making the Tough Financial Decision, Part 3 — Paying Off $63,000 Credit Card Debt & Lessons Learned

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In Parts I & II of this series, I explained how a seasoned financial consultant like myself managed to get into credit card debt, and how I made the difficult decision to sell our dream home to resolve that growing financial crisis. In this final part, I’ll finish the story and then discuss some of the lessons learned along the way.

When you’re in the rapids and headed for a waterfall like I was, it’s time to steer for shore and get out of the water. That’s what I did by liquidating the equity in my property. And while it was incredibly difficult to get over my psychological resistance to selling that home, in hindsight it was a smart financial move. I sold into a steadily rising market at a healthy net profit, sufficient to pay off the credit card debt and still leave working capital and some emergency cash reserves.

As I noted earlier, I had been using credit cards as a shock absorber to support my sagging budget, and I did this in order to conserve liquid cash. During the period when I was building unsecured debt, I never had to dip into my long-term retirement accounts, because I never spent down all of my non-retirement cash.

I kept my eye on the ball and never let the situation get out of hand. I made sure I had sufficient reserves to implement my own debt settlement program if I had to. I certainly did cut it close, however.

For the year or so prior to making the decision to sell our home, the juggling act grew to absurd proportions. I was carrying balances on 17 different credit cards, structured in a way to minimize interest expenses. This doesn’t count regular bills like the mortgage, utilities, cable, telephone, car, home and auto maintenance, or medical expenses.

Needless to say, it was intensely stressful to keep so many plates spinning in the air at the same time. I had to keep spreadsheets so I would never miss a minimum payment. I couldn’t skip a beat or the whole row of plates would come crashing down.

One concern I had at the back of my mind was timing. Making a decision to sell a home you truly love is difficult enough. But then you have to implement the decision at the right time. I acted when I knew market prices in my neighborhood were rising at a faster clip than surrounding zip codes. So I can’t deny a bit of luck being on my side. Then again, I had only gone forward with buying this home back in 2010 after I had assured myself it would be a rock solid financial investment. They say that “fortune favors the bold,” but I believe fortune also favors those who are prepared for it and have done their homework.

Timing was relevant in other ways too. I checked my credit score every 3-6 months, to see whether my increasing use of credit was bringing down my score. I was well over 800 FICO when I bought the house. Sure enough, I watched the score come down as my credit utilization went up. Over time, my score dropped below 800, into the 770s, then 760s, then 750s. All this with never having missed a single payment.

What worried me was triggering a credit utilization threshold that would prompt my creditors to reevaluate my tradelines with them. Once that process kicks in, slow motion disaster is the usual outcome. One creditor lowers your open credit to limit their risk, which makes your usage ratio even worse, taking another notch off your score. Other creditors follow along, and soon you are maxed-out where before you had open credit. Game over.

That didn’t happen to me, but I got perilously close. I know because I finally got a glimpse of my true FICO score. I mean the score that creditors actually see, not the puffed up one they sell you at the bureaus. It was buried in a disclosure from a major creditor who turned me down for a $10,000 line of credit and offered me a $4,000 limit instead.

The disclosure letter gave my score as 722. (The most common figure cited for a “prime” credit rating is 720. If you’re over that bar, lenders will trip over themselves to get your business. Below that, not so much!) That’s how close I got to seeing my generous credit limits lowered on my existing accounts, two points from the edge.

By the time we finished preparing the house for sale in mid-2014, our credit card debt had grown to $63,000. After closing escrow and paying off those accounts one by one, I waited about a month and then ran my credit again. The score Experian gave me was above 800 again, where I had been in the 750s and dropping. I don’t know where my true score stands today, but I don’t care because I won’t be applying for any financing in the near future.

Let me tell you: It feels amazing to go from owing almost $500k on a mortgage, plus $63k of credit card debt, to having no mortgage and no credit card debt less than one month later. I had gotten so used to carrying credit card balances, it actually felt strange to not have those bills anymore. Yet given what I do for a living, I was annoyed at having to carry any credit card debt in the first place, so I considered it my professional duty to extricate myself from that situation and then write about it. Hence this article series.

I wrote about my analysis above, the Ben Franklin approach, the three-year rule, and how I concluded that selling the house was the right decision. I also want to make clear how I evaluated the various debt relief options available to me.

Debt roll-up didn’t make much sense for my situation. I didn’t have reliable income figures from month to month, so planning for overpaying the minimums consistently enough to do a roll-up strategy was not realistic.

Bankruptcy was off the table for me, but not for any emotional reasons. I had too much equity in my property to file Chapter 7 without a forced liquidation anyway, and I would have negotiated settlements long before considering a 5-year Chapter 13 bankruptcy.

You may be wondering. Why didn’t I just quit paying my credit cards and settle my debts later? This is an important question, especially for me. I’ve been teaching people how to settle their debts for 18 years, settlement works like magic when the situation warrants that approach.

The bottom line is you should only do debt settlement if you have to. I knew if I sold the property at the right price, I’d have enough to simply pay off my debts in full. That was the ethical thing to do and the correct business decision as well. There is a time when letting go of your credit score is the right thing to do. But in my case, I wanted to keep my financing options open for business reasons. When I looked at all the factors, it made the most sense to free up the cash that was locked up in the property, pay off the debts, get ship-shape again, and then focus on doing what I do best — providing life-changing information to struggling Americans trying to make ends meet.

So where did we land after selling our dream home? I’ve always loved the mountains of Southern California, and did my share of day hiking in the San Gabriels and Cuyamaca Mountains. One of the things I loved the most about our “dream home” was its amazing view of the mountains. I figured if I actually went to live in the mountains instead of just looking at them, then I’d be happy about the move instead of depressed at having to leave such a nice home. So we moved to the small mountain town of Idyllwild, nestled about a mile high in the San Jacinto Mountains.

With the help of yet another crackerjack realtor, we secured a nice home under a long-term lease agreement. We wanted to “try before we buy” in this small mountain community, so a lease made perfect sense for our situation. Home ownership can indeed be a wonderful thing, provided the financial winds are in your favor. But it can also be a huge burden when the numbers are working against you. So we were looking for a breather, a time without a mortgage or the responsibility of home ownership.

After getting past the move itself, I had expected to feel something of a letdown. I figured I’d feel a sense of loss at having to give up the house. Instead, I felt liberated. The mortgage debt was paid off and the credit card debt was GONE! I had 17 fewer bills each month to worry about. No more worrying about covering the next property tax installment. And I had found a nice place to live in the mountains where I had always wanted to be. Not so bad.

Through this process I’ve gained invaluable experience about making tough financial decisions, and I felt a need to share that story with my readers. As a debt coach who regularly encourages clients to make such decisions, I had to step up and take the exact same advice I’d have given a client facing my situation.

But … this is not just about selling a dream home!

There are many types of tough decisions you might have to face in your financial future. The decision to file bankruptcy is a difficult one for most people. I often see clients who have ruled out bankruptcy purely for emotional reasons, rather than sound financial arithmetic. If your “tough decision” means filing Chapter 7 bankruptcy to solve your problem, then so be it! Life will go on. Millions of people have survived bankruptcy and have done just fine afterwards, and you will too.

If you can’t do Chapter 7 bankruptcy and would have to file under Chapter 13, then you’d be facing a totally different decision. Chapter 7 wipes out unsecured debt and provides a fresh start within months, with the only cost outlay being the case fees (usually in the range of $1,500 to $2,500). Chapter 13, on the other hand, requires a repayment over 3 to 5 years, at a monthly figure determined by the court. Facing the prospect of being in a long-term bankruptcy case, one should consider debt settlement as an alternative. Again, a tough decision all the way around, but one that must be made with almost Spock-like detachment!

To take a different example, perhaps the problem is the recreational vehicle sitting out in your side yard, little used but a sentimental favorite. You’ve had some good weekends on the road and camping in your RV, and you hate to give it up. But the payments are $740/month and you are coming up short by more than that every month after getting hit with a pay cut at work. What to do? How about a voluntary turn-in, so they don’t have to repossess the vehicle or sue you to recover it? That’s a tough decision for sure, but emotion has no place in that decision. Let the numbers dictate the solution, and the answer becomes obvious.

I could go on describing various hypothetical scenarios for tough financial decisions, but I trust that the above is enough to give readers an appreciation for the approach I’ve been arguing for throughout this series.

A few final thoughts on lessons learned:

1. Nothing lasts forever, including income sources. Give some consideration to how you would handle a gap in income of 3 months, 6 months, and 12 months.

2. Home ownership is not always better than renting. It may or may not be better, depending on your financial situation. Run your figures to see what your home is actually costing you year-over-year, then compare to renting.

3. Life is about a lot more than income and net worth, whether or not you own a home, etc. Apply the three-year rule and see how you feel about a particular decision.

4. Evaluate your financial affairs from the perspective that your assets should be working for you (that is, to generate income and support), rather than you always working to support your assets.

5. All problems are relative. There are young soldiers back from Iraq and Afghanistan who are missing two, three, even all four limbs. They are learning to do kayaking and skiing and other sports using prosthetic limbs. Compared to those brave young men and women, I have no problems I care to complain about, financial or otherwise. How about you?

6. Do your research. There are no magic bullets, but there certainly are a lot of scams in the debt relief world.

I’ll close with a personal note. Before publication, I shared this article with a good friend, and he expressed some concern I might be revealing too much about my personal financial status. “People want their debt coaches to be financially stable,” he reminded me.

I thought about it, and concluded this was precisely the point of the article. I had applied my own methods and made the adjustments dictated by my own financial self-analysis. The result was a return to long-term stability and a lot less day-to-day stress.

In the end, it comes down to honesty. When you are facing a tough financial decision, the path to a solution begins with an honest look at your situation. You have to face reality, and that is simply not possible until you strip away all forms of emotional pretense and denial.

In this article I’ve tried to use myself as an example, to show how I got in trouble when I ignored this principle of objectivity, and how I was able to turn things around when I finally faced facts and took my own advice. I hope the example was of value to you if you needed a nudge in the right direction. To those seeking reliable debt relief information, please refer to my website at zipdebt.com for resources, ideas, and program information.