Dear Penny: I’m Barely Getting by and $60,000 in Debt. How Do I Pay It Off Without Working 24 Hours a Day, Seven Days a Week?

Dear Buried,

In your situation, I see a few options:

• Renegotiate debt payments.
• Refinance debts.
• File bankruptcy.
• Let go of the goal to “get out of debt.”

You could renegotiate your monthly payments with the creditor that sued you. If they believe you might not earn enough income to cover payments or you might file for bankruptcy, they could be willing to negotiate to ensure they continue to get paid. A nonprofit credit counseling agency can help you through the process.

Or you could negotiate with other creditors to bring down your overall monthly commitments.

If creditors won’t budge on payments, try consolidating your debts. You’ll take out a personal loan that pays all outstanding credit card and loan balances, so you have just one monthly payment. You usually get up to five years to pay it off, so use a loan calculator to see whether you could get to a favorable monthly payment in that timeframe.

Qualifying for debt consolidation could be tough with a judgment on your record, but a lender might work with you if you’re using the funds to pay off the debt you were sued for. Speak with lenders at local banks or credit unions, rather than online lenders, for more flexibility.

If the debt payments cause you financial hardship, you could file bankruptcy to discharge the judgment against you as well as other debts.

A bankruptcy judgment will likely drain any savings or major assets you have (but retirement accounts and primary vehicles are usually safe, if you have those). It would be a negative mark on your credit report for the next 10 years, but might not be more harmful than the situation you’re already in.

Finally, you could reframe your goal to “get out of debt.” If you can live with your current financial commitments, including your obligations to creditors and minimum loan payments, you could simply make those payments as long as necessary. You don’t have an obligation to eliminate debt, so if it’s not causing you hardship, maybe you can accept it, automate the payments and stop worrying about it.

Dana Miranda is a Certified Educator in Personal Finance® and author of YOU DON’T NEED A BUDGET. She writes Healthy Rich, a newsletter about how capitalism impacts the ways we think, teach and talk about money.