Solve Your Money Troubles

Strategies to Get Out of Debt and Stay That Way

Solve Your Money Troubles

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Solve Your Money Troubles

New Edition!


, 16th Edition

Get out of debt and rebuild your credit.  With the step by step guidance in this book, you can regain financial freedom by:

  • stopping debt collector harassment cold
  • negotiating down your debt with creditors
  • reducing your student loan payments
  • creating a healthy financial plan that you can live with
  • wiping the slate clean with bankruptcy

Take the first steps toward living debt-free!

  Available as part of the Nolo's Credit Repair Bundle

Product Details

Overwhelmed by debt? Start here.

Conquering overwhelming debt starts with understanding your options. Solve Your Money Troubles gives you the tools you need to get your finances back on track. Learn how to:

  • stop debt collector harassment cold
  • negotiate down your debt with creditors
  • reduce your student loan repayments, and
  • create a healthy financial plan that you can live with.

But that's not all.  Solve Your Money Troubles helps you handle the big issues, too.  Find out how to:

  • stop a wage garnishment from leaving you penniless
  • get your car back after a repossession
  • prevent a foreclosure by applying for a workout program
  • respond to a action if you get sued, and
  • decide if it's time to wipe the slate clean by filing for bankruptcy.

Most importantly, you can count on getting the support you need. In addition to up-to-date legal information, you’ll find practical tools, such as sample creditor letters and budgeting worksheets. And, if the law changes, you won’t be left out of the loop. You’ll have online access to all of the latest debt, credit, and bankruptcy developments.

“This book is a must-have, even for people who don’t have debt problems.”
-Los Angeles Times

“One of the best books you can buy on all aspects of personal debt.”
-Michael Pellecchia, Nationally Syndicated Columnist

“This book will give you strength and the skills needed to respond to bill collectors and to rebuild your credit….”
-New Orleans Times-Picayune

Number of Pages
Included Forms
  • Worksheet 1: Monthly Income
  • Worksheet 2: Your Debts
  • Worksheet 3: Property Checklist
  • Worksheet 4: Property Exemptions
  • Worksheet 5: Daily Expenses
  • Worksheet 6: Monthly Budget

About the Author

  • Amy Loftsgordon, Attorney

    Amy Loftsgordon is a legal editor at Nolo, focusing on foreclosure, collections, and debt management. She writes for several sites, including and She has also updated several Nolo books, including The Foreclosure Survival GuideCredit Repair, and Solve Your Money Troubles. Amy has worked in foreclosure and related areas since 2001, most recently on suits against mortgage servicers for non-compliance with federal servicing standards. She has also developed customized foreclosure-related training programs, audited completed foreclosures to determine if they were processed in accordance with state laws, and reviewed servicer records to uncover extensive credit reporting errors as part of a national settlement involving the mortgage industry. She received a B.A. from the University of Southern California and a law degree from the University of Denver, and is licensed to practice law in Colorado.

  • Cara O'Neill, Attorney

    Cara O'Neill is a legal editor and writer at Nolo, focusing on bankruptcy, consumer credit, and debt. She writes for several sites, including,,, and She also edits a variety of Nolo book titles and updated Nolo’s  How to File Chapter 7 Bankruptcy,  19th  edition.

    Prior to joining Nolo, Cara practiced for over 20 years in civil litigation and bankruptcy. During that time, she served as an Administrative Law Judge mediating disputes in the automotive industry, taught undergraduate and graduate law courses, and served as house counsel for a large insurance company. She earned her law degree in 1994 from the University of the Pacific, McGeorge School of Law, where she served as a law review editor and graduated a member of the Order of the Barristers—an honor society recognizing excellence in courtroom advocacy. Cara maintains a bankruptcy practice in Roseville, California at the Law Office of Cara O’Neill.

Table of Contents

  1. How Much Do You Owe?

    • How Much Do You Earn?
    • How Much Do You Owe?
  2. If You're Married, Divorced, or Separated

    • Community Property States
    • Common Law States
    • Rules for Domestic Partnerships and Civil Unions
  3. Create a Budget and Control Spending

    • Figure Out Where YOur Money Goes
    • Make a Spending Plan
    • Create Good Spending Habits and Avoid Financial Pitfalls
  4. Prioritizing Your Debts

    • Secured and Unsecured Debts
    • High-Priority Debts
    • Medium-Priority Debts
    • Low-Priority Debts
    • Review Your Worksheets
  5. Finding Money to Pay Your Debts

    • Cut Your Expenses
    • Increase Your Income
    • Get Some of Your Tax Refund Early
    • Get Your Tax Refund Fast
    • Sell a Major Asset
    • Sell Smaller Items
    • Withdraw Money From a Tax-Deferred Account
    • Apply for Government and Agency Help
    • Consider a Home Equity Loan
    • Use the Equity in Your Home If You Are 62 or Older
    • Borrow the Money
    • What to Avoid When You Need Money
    • Avoid Payday Lender Prepaid Cards
  6. Negotiating With Your Creditors

    • Prepare a Negotiating Plan
    • Communicate With Your Creditors
    • Tips for Negotiating With Creditors
    • Rent Payments
    • Mortgage Payments
    • Utility and Telephone Bills
    • Car Payments
    • Secured Loan Payments
    • Insurance Payments
    • Medical, Legal, and Other Service Bills
    • Child Support and Alimony Payments
    • Income Taxes
    • Student Loan Payments
    • Credit Card Payments
    • Negotiating When the Creditor Has a Judgment Against You
    • Pay Off a Debt for Less Than the Full Amount
    • Don't Write Postdated Checks
    • Beware of the IRS If You Settle a Debt
  7. What to Expect When You Can't Pay Your Debts

    • Eviction
    • Repossession
    • Tying Up Property Before a Lawsuit
    • Lawsuits
    • Lawsuits Against Third Parties Who Hold Your Assets
    • Liens on Your Property
    • Jail
    • Bank Setoff
    • Intercepting Your Tax Refund
    • Loss of Insurance Coverage
    • Loss of Utility Service
  8. Reducing Mortgage Payments and Dealing With Foreclosure

    • Foreclosure
    • Nonjudicial Foreclosure
    • Judicial Foreclosures
    • Right to Cure Default
    • Right of Redemption
    • The Sale
    • Defenses to Foreclosure
    • Watch Out for Deficiency Balances
    • Alternatives to Foreclosure
    • Federal Programs for Homeowners Facing Possible Foreclosure
    • Other Mortgage Workouts
    • Refinancing
    • Selling Your House 
    • Short Sales and Deeds in Lieu of Foreclosure
    • Finding Other Programs to Help Homeowners
  9. Dealing With Debt Collectors

    • Creditor or Debt Collector?
    • Negotiating Secured Debts
    • Before Your Debt Is Sent to a Debt Collector
    • When Your Debt Is Sent to a Debt Collector
    • Illegal Debt Collection Practices
    • How to Fight Back If a Debt Collector Violates the Law
  10. Understanding Loan and Other Credit Documents

    • Credit Disclosures
    • Common Terms in Credit Agreements
  11. Student Loans

    • What Kind of Loan Do You Have?
    • Figuring Out Who Holds Your Student Loan
    • Canceling Your Loan
    • Postponing Payments
    • Changing Your Repayment Plan
    • Getting Out of Default
    • Filing for Bankruptcy When You Can't Pay
    • Consequences of Ignoring Student Loan Debt
    • Private Student Loans
  12. Child Support and Alimony

    • How Child Support Is Determined
    • Modifying the Amount of Child Support
    • If Paternity Is Disputed
    • Enforcement of Child Support Obligations
    • Alimony
    • Bankruptcy and Child Support or Alimony Debt
    • Taxes, Child Support, and Alimony
  13. Lawsuits and Collection of Judgements

    • How a Lawsuit Begins
    • Negotiate
    • Alternative Dispute Resolution
    • Defenses and Claims
    • What to Expect While the Case Is in Court
    • When the Creditor Gets a Judgment Against You
    • How Creditors Collect Judgements
    • Stopping Judgment Collection Efforts
  14. Bankruptcy: The Ultimate Weapon

    • Chapter 7 Bankruptcy
    • Chapter 13 Bankruptcy
    • The Automatic Stay
    • Bankruptcy Exemptions
    • Will Bankruptcy Solve Your Debt Problems?
    • Getting Help With Bankruptcy
  15. Property Creditors Can't Take

    • Property Subject to Collection
    • Types of Exemptions
    • Is Your Property Exempt?
    • Claiming Exemptions
  16. Rebuilding Your Credit

    • Credit Scores and Credit Reports: What's the Difference?
    • Credit Reports
    • Cleaning Up Your Credit Report
    • Your Credit Score
    • Rebuilding Credit Without Getting New Credit
    • Rebuilding Credit by Getting New Credit
    • Don't Use a Credit Repair Organization
  17. Choosing and Managing Credit Cards

    • Avoiding Credit Card Traps
    • Consumer Credit Card Rights
    • Use Credit Card Disclosure Forms to Identify Traps
    • Trouble Paying Your Bill
    • Should You Get Rid of Unnecessary Credit Cards?
    • How to Close a Credit Card Account
    • Shopping for a New Card
    • Using Credit Cards Wisely
    • Cards You Didn't Request
    • Rejected and Blocked Cards
    • Liability If Your Credit Card is Lost or Stolen
    • Unauthorized Use of Your Card by an Acquaintance
    • To Dispute a Credit Card Bill
    • Debit Cards
    • Prepaid Cards

Sample Chapter

How Much Do You Owe?

To successfully plan your strategies with your creditors, you need to come to terms with your total amount of debt. This may make you shudder.

But happily, most credit counselors will tell you that people tend to overestimate their debt burdens.

To figure out your financial situation, you need to compare what you bring in each month with what you owe on your monthly expenses (such as food, housing, and utilities) and your other debts (for example, student loan payments).

Having a ballpark idea of the amount of your income and debt burden is not enough to tackle your debt problem. Getting precise numbers is a crucial part of the process—don’t skip it. In addition to laying out how much you earn and owe, this process will help you prioritize your debts, which will then help you decide which strategies to use to solve your money troubles.

To figure out how much you earn and how much you owe (both in monthly pay­ments and overall), follow the instructions on the next pages and use the worksheets in Appendix C. If you are married or have jointly incurred most of your debts with someone, fill out the worksheets together.

Warning Signs of Debt Trouble

If you have panic attacks when you try to figure out your total debt burden, you’ll feel better if you skip this chapter and come back to it when you are better able to confront the information. Before doing that, however, ask yourself the following questions. If you answer “yes” to any one of them, you are probably in or headed for serious debt trouble:

  • Are your credit cards charged to the maximum?
  • Do you use one credit card to pay another?
  • Are you making only minimum pay­ments on your credit cards while continuing to incur charges?
  • Do you skip paying certain bills each month?
  • Have creditors closed any accounts on you?
  • Have you taken out a debt consoli­da­tion loan? Are you considering doing so?
  • Have you borrowed money or used your credit cards to pay for groceries, utilities, or other necessities (for reasons other than convenience or to get perks on a credit card)?
  • Have you bounced any checks?
  • Are collection agencies calling and writing you?

How Much Do You Earn?

Start by figuring out how much you earn each month. Grab a calculator, your pay stubs, and complete Worksheet 1 in Appendix C, by entering your monthly income from each listed source. If you are paid more often than monthly, see the instructions in Worksheet 1 to convert your pay to a monthly amount. If you have income that doesn’t fit into one of these categories, list it as “other.”

How Much Do You Owe?

In Worksheet 2 in Appendix C, you list your debts. Gather the documents that show payments on all your debts, the total amount owed on each debt, and any amount past due, including any interest or fees that have been added. Be as thorough and complete as possible. The completed Worksheet 2 will tell you exactly how much you should be paying each month (to be current on your debts) and how far behind you are. Here’s how to fill it out.

Column 1: Debts and other monthly living expenses. In Column 1, enter the type of debt. Don’t enter a debt more than once. So, for example, if you already deducted from your income in Worksheet 1 a debt that is paid out of your paycheck, such as child support, don’t deduct that same debt again here.

If you are married, you may not be certain which debts are yours and which belong to your spouse. If your marriage is intact and you’re having mutual financial problems, approach your debt problems as a team. That is, enter all your debts in Column 1. If, however, you are separated or recently divorced, or are married but having financial problems of your own, see Chapter 2 for help on figuring out the debts for which you are obligated. If you generally share expenses and maintain a household with someone else, consider combining your income and paying all of your debts with joint funds, regardless of who actually incurred the debt. Enter both partners’ debts in Column 1.

Column 2: Outstanding balance. In Column 2, enter the entire outstanding balance on the debt. For example, if you borrowed $150,000 for a mortgage and still owe $125,000, enter $125,000. If you don’t want to contact the creditor until you are ready to negotiate (and that will only be after you’ve determined how much you can pay), you have a few options. Your latest account statement might list the entire outstanding balance. If not, the creditor’s automated telephone system or online account information might provide the information you need. If you can’t get the balance and you prefer not to talk to the creditor, use your best guess for now.

Columns 3 and 4: Monthly payment and ­total you are behind. In Columns 3 and 4, enter the amount you currently owe on the debt. If the lender has not established set monthly payments—for example, for a doctor’s bill—enter the entire amount of the debt in Column 4 and leave Column 3 blank. If the debt is one for which you make regular monthly payments—such as your car loan or mortgage—enter the amount of the monthly payment in Column 3 and the full amount you are behind (monthly payment multiplied by the number of missed months, plus any fees or charges that have been added, like over-limit fees or late payment charges) in Column 4.

For credit card, department store, and similar debts, enter the monthly minimum payment in Column 3 and your entire balance in Column 4. But keep in mind that eventually you should make more than the minimum payment on your credit cards. (Chapter 10 discusses the danger of making only minimum payments each month.)

Column 5: Is the debt secured? In Column 5, indicate whether the debt is secured or unsecured. A secured debt is one for which a specific item of property (called “collateral”) guarantees payment. The most common type of secured debt occurs when you sign a credit agreement (sometimes called a security agreement) that allows the creditor to take a particular item of property under certain specified conditions—without suing you first. Examples of conditions that might allow the creditor to take your property include your failure to make a payment, your failure to maintain insurance on the property, or your failure to comply with the payment agreement in some other way. Typically you sign a credit agreement, giving the creditor a security interest in your property when you finance a car purchase; get a mortgage; get a second, third, or additional loan on your home; or buy an appliance or piece of furniture with store credit.

A creditor may also be able to secure its debt without your agreement by filing a lien against your property. This can happen in two circumstances. First, the creditor can file a lien if the law specifically allows for it. An example is a mechanic’s lien—the law specifically states that a worker or material supplier may file a lien against your real property if you or the contractor fail to pay them. Second, a creditor can file a lien against your property if it has sued you and obtained a judgment against you. This is called a judgment lien.

Unsecured debts are typically bank credit card debt; bills owed for utilities, medical, or legal services; student loans; and spousal or child support.

Secured property is usually something very important, like your car or house. Because it can be taken quickly, without the delay of a lawsuit, secured debts are usually a high priority for you to pay.

Specify the collateral the creditor is entitled to grab if you default. (After you have read more about whether a debt is secured or not in Chapter 4, you can come back and review Column 5 to see if you need to make any changes.)

Column 6: What priority is the debt? Leave Column 6 blank until you read Chapter 4. It will help you prioritize the debts.

Add it up. When you’ve entered all your debts in the worksheet, total up Columns 2, 3, and 4. Column 2 represents the total balance of all your debts, even though some of it may not be due now; Column 3 represents the amount you are obligated to pay each month; and Column 4 shows the amount you would have to come up with to get current on all your debts.

Related topic

Don’t forget your other expenses. None of us have monthly expenses consisting entirely of loan or credit payments. We also have to pay rent and buy groceries, pay for movies and restaurants, buy clothing and household goods, and so on. These other expenses are covered in Chapter 3. Now might be a good time to review the information in Chapter 3’s “Figure Out Where Your Money Goes.” By listing your non-debt-payment expenditures, you will get a more complete picture of your finances.

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Customer Reviews

3 Reviews





Review by Cliff M.
Great Deal of Knowledge (Posted on 5/10/2019)

Thanks a bunch!!! by Anonymous
The book and PDF came through with no problems. The book is uses plain English and very helpful tips. (Posted on 7/13/2017)

Invaluable epic! by Anonymous
The book enabled me to mount a profound debt collection defense, which was not available from any attorney; in other words, an invaluable and compelling epic! (Posted on 7/13/2017)

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