Answer: The first thing you need to do is opt out of your bank’s bounced-check protection program. You may think you need to borrow money this way to make ends meet, but as you’ve discovered, it’s driving you further into the hole.

Next, rethink your participation in the debt management program. It was honorable of you to try to avoid bankruptcy, but it’s pretty clear you can’t afford to continue with this program if doing so leaves you in default on your student loan obligations. Credit card debts can be erased in Bankruptcy Court; student loan debt can almost never be wiped out that way.

If you have federal student loans, you may be able to qualify for the income-based repayment program, which caps your payment at a reasonable amount and erases any remaining balance after 10 years in a public service job (such as teaching in the public school system). Otherwise, the balance is erased after 25 years of payments. If you have private loans, you have far fewer options for repayment, but wiping out the credit card debt would free up more money to pay these loans back. Talk to your lenders to see what options you may have.

Another factor to consider is how much you’re spending on housing. If you own a home, the mortgage and related home-owning costs may simply be too much for you on your current income. Getting rid of the house in a short sale, or even letting it go into foreclosure, may be a far better option than continuing to cling to a home you can’t afford.

Bankruptcy, short sales and foreclosures are all drastic options. But some financial problems are so great that a drastic solution is the only reasonable choice if you ever want to get back on your financial feet.

Answer: Bankruptcy is frequently mentioned in this column as a possible solution for overwhelming debt. Having a lot of debt isn’t the same as being overwhelmed by it, however. What matters is whether you’re able to make sufficient progress on paying down that debt.

The gentleman in question might discover that getting rid of a too-expensive house frees up money to pay down the family’s debt. Otherwise, it would be smart to talk to both a legitimate credit counselor (the National Foundation for Credit Counseling, at http://www.nfcc.org, has referrals) and an experienced bankruptcy attorney (referrals from the National Assn. of Consumer Bankruptcy Attorneys are at http://www.nacba.orghttp://www.nacba.org).

Answer: You’ll probably have better luck with mom-and-pop landlords than with the corporate kind that run huge complexes. The mom-and-pop types tend to have more flexibility with potential renters who have tattered credit, particularly if those renters can make substantial deposits. If your parents don’t have much cash left over after bankruptcy — and they probably won’t — you may need to front them some money or consider letting them live with you while they save up.

You also should get a better idea of what caused their financial train wreck to see what you can do to help avoid further crises. If they’re suffering from diminished capacity, you may need to talk to an elder law attorney about taking over their finances for them. If they’re chronic overspenders, they may benefit from budgeting classes from a nonprofit credit counseling agency or community college. Even if the only bad decision they made was to continue borrowing against their home rather than paying it off, they could still benefit from some financial education and advice about how to live within their means. A session with a fee-only financial planner could help you all figure out what that will look like.

Answer: You’re already in trouble. You have an unaffordable mortgage, a whopping pile of debt and you’ve defaulted on your credit cards and student loans. Your desire to pay your bills is irrelevant at this point: You’re in too deep.

You may be able to avoid bankruptcy if you find a job after graduation that substantially boosts your income. In the meantime, you could give yourself some wiggle room by getting a roommate to help pay the mortgage and talking to your lenders about economic hardship options. (You can learn more about these at the financial aid site FinAid.org; search for “Trouble Paying Debt.”)

Before you make deals with any lenders, though, you should talk to an experienced bankruptcy attorney (check the National Assn. of Consumer Bankruptcy Attorneys at http://www.nacba.org for referrals) about your situation. You don’t say how much you owe on credit cards, but if the minimum payments are eating up that much of your income, it’s probably tens of thousands of dollars. If your job prospects when you graduate aren’t sterling, you may never be able to pay off that debt. You won’t be able to erase the student loans in bankruptcy, but you might be able to get rid of the credit card debt.

In the future, you need to understand two things. One is that carrying any credit card balance is a recipe for disaster. You shouldn’t have charged more than you could afford to pay each month, since that allowed you to keep living a lifestyle that wasn’t sustainable. Anyone who can’t pay more than the minimum on a credit card is in serious trouble, and using one card to pay another is insane.

The other thing to remember is that mortgages aren’t good debt if you can’t afford the payments — and a payment that eats up half your take-home pay is the very definition of unaffordable. Another clue that you bought too much house is the interest-only mortgage. If you can’t afford to buy a house using a 30-year, fixed-rate mortgage, you can’t afford the house.

Your credit scores should be the least of your worries at this point. Go get some good counsel, consider your options and make a plan to deal with this mess. Once you’re on the other side, you can start rebuilding your finances and your credit.

Answer: Not everyone can qualify for a Chapter 7 liquidation bankruptcy, which typically erases credit card debt. If your income is above the median for your area, or you’re trying to protect assets that would be taken in a Chapter 7 case, you could wind up in Chapter 13 bankruptcy, which requires a repayment plan.

The best way out of your situation may be to buckle down and pay off the debt as quickly as you can, even if it means your daughter’s taking a sabbatical from school for a while. You also could sell or cash in some non-retirement assets, if you have them, to pay off your debt.

If you really can’t afford these bills, you could contact a legitimate credit counselor such as one affiliated with the National Foundation for Credit Counseling at http://www.nfcc.org to see if you could swing a debt management plan that would allow you to pay off these bills at a lower interest rate.

If that won’t work, another option is to try to negotiate a settlement with your creditors. Settlements trash your credit scores, and your creditors could sue you if you stop paying your bills, so this solution isn’t for the faint of heart. You may want to return to that attorney and ask for guidance before you take such a drastic step.

Answer: When you’re struggling with credit card debt, you’d be wise to make two appointments: one with a legitimate credit counselor (you can get referrals from the National Foundation for Credit Counseling at http://www.nfcc.org) and one with a bankruptcy attorney.

The credit counselor can determine whether you can pay off your credit card debt within five years and avoid bankruptcy. The attorney can advise you about your eligibility for bankruptcy and your other options.

If neither credit counseling nor a Chapter 7 liquidation bankruptcy is a good fit for you, debt settlement can make sense.

You don’t, however, have to pay some debt settlement company a big upfront fee to negotiate for you. It is possible to negotiate debt settlements on your own, particularly if you can pay with lump sums of cash. For more on debt relief options, visit debt expert Gerri Detweiler’s site DebtCollectionAnswers.com.

Answer: If you come across a company touting a new federal law that makes it easier to settle debt, rest assured: It's a scam. There is no such law, and these outfits are capitalizing on people's confusion about changes in credit markets (for another example, see below).

If you're struggling with credit card debt, first make an appointment with a legitimate credit counselor, preferably one affiliated with the National Foundation for Credit Counseling. These counselors can review your situation and see if you could qualify for a debt management plan, which would allow you to pay off your debt over five years or so, typically at a reduced interest rate.

Also, make an appointment with a bankruptcy attorney to discuss your options. Credit counseling is designed to steer you away from bankruptcy, but you may be better off in the long run by filing. Meeting with both a credit counselor and a bankruptcy attorney will give you a better idea of your alternatives.

Some people are able to settle their debts for less than they owe, but many who try wind up getting sued by their creditors. The debt settlement field is filled with scam artists who charge huge upfront fees and then fail to settle any debts. If neither credit counseling nor bankruptcy is a good option for you, you can ask the bankruptcy attorney for a referral to one of the relatively few settlement companies that's legitimate and may be able to help you.

Answer: You can’t fix your credit until you fix your finances, and your first step is deciding what to do about your cards.

If your credit is “messed up” and your credit scores are low, you probably can’t consolidate this debt into a lower-cost loan—which is often the best option for people with good credit, since credit unions currently offer 3-year debt consolidation loans with rates under 10%.

A visit with a legitimate credit counselor (you can get referrals at www.nfcc.org) will determine whether you have enough income to pay off your cards over five years or so through a debt management plan, which typically lowers the interest rate you pay.

You also should visit a bankruptcy attorney to see whether filing for Chapter 7 liquidation is an option. If not, you may want to talk to the attorney about settling your debts for less than you owe.

Once you’ve visited both the credit counselor and the bankruptcy attorney, you’ll be able to make more informed decision.

After the debt is paid, erased or settled, you can begin to rebuild your credit. Until then, your efforts won’t come to much, since your inability to pay your credit cards will continue to erode your credit scores.

Answer: Debt settlement means you’re paying less than you owe — and creditors really don’t like that. Debt settlement can trash your credit, which is why it isn’t a good option if you can find other ways of dealing with your debt.

If your interest rates are relatively low and you can easily make your minimum payments, your best bet is to simply pay off the debt on your own, throwing as much money as possible at your highest-rate card while paying the minimums on your other debt. Once your highest-rate debt has been retired, you can apply that payment to your next highest-rate debt, and so on until you’re debt free.

Or you can transfer your debts to a fixed-rate personal loan and pay that off over time. Many credit unions offer three-year personal loans at rates of 10% to 15% to people with good credit.

If you’re struggling to make your minimum payments, you should arrange two appointments: one with a legitimate credit counselor (you can get referrals from the National Foundation for Credit Counseling at www.nfcc.org) and another with a bankruptcy attorney.

The credit counselor may be able to put you on a debt management program to pay off your debt at lower interest rates. Credit counseling is a neutral factor in credit scoring formulas — neither helping nor hurting — but your creditors may report you as late, which could hurt your scores.

Bankruptcy would really trash your scores, driving them down into the 500s. But it could wipe out your debt and give you a fresh start if you aren’t able to pay your bills.

What you want to avoid, if possible, is raiding retirement funds or home equity to pay credit card debt, particularly if bankruptcy may be an option. Retirement funds are protected in Bankruptcy Court and so, in many cases, is home equity.

People would try to sign up for the counselors’ debt management programs, only to discover they couldn’t make the payments credit card companies required and their only real option was bankruptcy.

The problem has become more critical as more people sink deeper into debt and often have less income to pay what they owe.

Last fall, the leading credit counseling organization–the National Foundation for Credit Counseling–formerly called on creditors to take additional steps to make debt management plans more affordable.

Today, the NFCC announced the creditors had come through. All top 10 of the nation’s credit card issuers agreed to provide additional relief to troubled borrowers by waiving fees, lowering interest rates and accepting smaller minimum payments.

What that means for the typical credit counseling customer who owes $24,000 on credit cards is a payment as low as $420 a month, versus the $540 that would have been required earlier.

If you’re having trouble making your minimum payments and trying to avoid bankruptcy, a call to an NFCC-affiliated agency may be in order. But also discuss your situation with a bankruptcy attorney to see if starting fresh may be a better option.

For more, read:

• The consumer’s guide to credit counseling
• Get a credit card reprieve
• 15 steps if bankruptcy is inevitable