There are no easy solutions in circumstances such as yours that involve a reduced income. The only three ways to improve cash flow are to increase income (e.g., second job?), reduce expenses, or do both. Your $40,000 debt load is another issue, especially since the outstanding balance now exceeds your annual income. Start by reaching out to a nonprofit credit counseling agency. See the Web site of the National Foundation for Credit Counseling at www.nfcc.org for information about credit counseling and links to credit counselors in your area. If they can't assist you (because your debt is far in excess of your capacity to repay it within three to five years), you may need to consider bankruptcy. In this case, you'll need to contact a local attorney in your area who specializes in this area of law. We would like your feedback on this Personal Finance Frequently Asked Question.

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