If you are like most Americans, the stimulus payments that you received have either already been spent or will be running out soon. In fact, according to the NY Times, the stimulus money received has left “many low-income Americans find their savings dwindling or even depleted.” The JPMorgan Chase Institute, also explained that this occurred “in part because those households went into the crisis with the thinnest financial buffers.

Stop using your savings to get yourself out of debt, you have options!

So, What Can You Do?

Using your savings to get yourself out of debt can leave you without a cushion for your future. You have several options to get yourself back on track:

  1. Organize: Taking stock of your expenses and income will help you get the best idea of where you are financially and what can be done.
  2. Set a Budget: It does not need to be complicated, especially when there are a number of free resources. You don’t need to spend more than 10 minutes on it a day. You can always adjust and evolve your budgeting habits over time! Cut out any unnecessary expenses and focus on repaying high-interest debt.
  3. Negotiate: Contact your creditor(s) to see if it is possible to establish a workable repayment plan or negotiate the balance down. This is possible and takes time and patience on your part. Many creditors will work with you to come up with a better repayment plan or even take a lump sum payoff. If you decide to hire a professional to help you with this process, please do your research. Keep in mind that some creditors will not work with debt consolidation companies. Another thing to consider is that there are tax ramifications of settling your debts. Whatever debt your creditors do forgive can be considered taxable income to you. So, if you’re struggling to pay your taxes now, settling with your creditors might make that problem worse.

Already Received a Judgment For a Debt?

Do not ignore it or throw any documentation away. Served by a process server? If so, it is a real lawsuit. In California, you must respond within thirty days of receiving the summons and complaint. However, the response time will vary based on the state in which you live. Many people ignore the summons and complaint thinking that the charged off debt is no longer collectible. Once a credit card has been unpaid for 120-160 days, many banks will charge off the debt and then sell the right to collect to debt buyers.

Once you have been served, you need to act quickly. If the company suing you wins, you will end up with a judgment against you which can result in garnished wages. However, you have options to avoid the judgment against you: fight it in court, settle your debt, or file for bankruptcy.


Don’t be scared! Bankruptcy can be your best bet for a fresh financial start. However, you want to be sure you go about it the right way. Do not hold off on speaking with a qualified bankruptcy attorney. Most attorneys offer free consultations to go over your situation and recommend your best options. In fact, our office is happy to speak with you about your financial concerns and offer you the best options to get you back on track. Click here to read more about California Bankruptcy and how it can help you.

Looking For More Information?

At the Law Office of Daniela Romero, we believe in relationships that are based on trust. Before we work together, we would like you to get to know us. We want you to be sure that we are the perfect fit for you. This will allow you to be completely comfortable sharing intimate and difficult details of your case, so we can offer you representation to the fullest extent of the law. Call us today to set up a free consultation.