Dear Liz: I'm in mega credit card debt. I'm 50, single and make more than $130,000 a year. But I owe more than that, excluding my mortgage. I've been living beyond my means for the past few years; there's no one else to blame and no catastrophe that caused me to go into debt. I was foolish and didn't pay attention to the fact that credit card minimum payments were going to double. I now find myself owing more each month than I take home.

I have gone to a legitimate credit counseling organization, but the plan they developed would leave me almost nothing once utilities and basic living expenses were paid. Should I get another opinion? I hate the thought of bankruptcy and have even tried negotiating with my creditors to reduce the minimum payments so that I can get back on track. I've canceled newspaper, cable and other optional expenses. I am literally living from paycheck to paycheck. If you could point me in the right direction, I would be grateful.

Answer: If you owe more on credit cards than you make, your situation is dire indeed.

As you've discovered, even the lower interest rates available under the credit counselor's debt management plan sometimes aren't low enough to make repayment affordable.

At the same time, your high income probably precludes you from filing for a Chapter 7 bankruptcy liquidation, which would allow you to erase your credit card debt. Instead, you likely would be shunted into a Chapter 13 repayment plan, which would require you to make payments on your debt for five years, after which your remaining credit card balances would be erased. The repayment plan could be as burdensome as the one the credit counselor suggested, however.

Another option is to try to negotiate lump-sum settlements of your debts -- a perilous path that could result in your creditors suing you.

In any case, you need to consult with a bankruptcy attorney about the details of your situation and what solutions might make sense.

Ex-spouse can wreck your credit

Dear Liz: Thank you for writing about former spouses ruining people's credit. I am a living example of what can happen when your ex wants to be vindictive. My former husband was ordered by the court to refinance our joint mortgage into a loan in his own name. Instead, he decided to sell the home, but fell behind on the payments before he finally succeeded. When I went to buy a house of my own, I discovered the lender had put the late payments on my credit report as well, since the loan was in both our names. Because my credit scores have been ruined, my daughter and I must remain in rental properties for the foreseeable future. My only recourse, according to my attorney, is to file a suit for damages, which of course means spending more money with no certainty as to the judge's mood on the day. Clearly, refinancing should have been a requirement before the divorce was granted.

Answer: The good news is that the clock is already ticking on the black marks that trashed your credit. After seven years, all mention of the late payments will disappear from your credit reports, and their effect is diminishing even now. Credit scoring formulas are designed to weigh your recent behavior more heavily than your past, so paying your bills on time and using credit responsibly should help to improve your scores.

You're much better off than people whose exes simply continue to pay late without ever selling the home. Those folks are in credit jail with little hope for parole because creditors don't have to pay any attention to what a divorce decree says. What matters is what names are on the loan and whether the loan is paid on time.

Tax credit helps home buyers

Dear Liz: We just bought our first house and were told we qualified for a $7,500 tax credit. How do we find out more about it?

Answer: Search for "first-time homebuyer tax credit" on the IRS website ( www.irs.gov) for the details of this tax break, which is really more of an interest-free loan.

The credit is available for home purchases after April 8, 2008, and before July 1, 2009, but under current law the tax break must be repaid over the following 15 years. So if you got a $7,500 credit on your 2008 return, you would have to repay one-fifteenth of the amount, or $500, on 15 future returns starting in 2010. Congress is considering removing the payback requirement, but hasn't done so yet.

Liz Pulliam Weston is the author of the book "Easy Money: How to Simplify Your Finances and Get What You Want Out of Life." Questions for possible inclusion in her column may be sent to 3940 Laurel Canyon Blvd., No. 238, Studio City, CA 91604, or via the "Contact Liz" form at www.asklizweston. Distributed by No More Red Inc.