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Is bankruptcy something I should be thinking about?

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Anonymous
Not applicable

Is bankruptcy something I should be thinking about?

Hello everyone,

I am 21 still in college finishing my degree in actuary.

I have accumulated approximately 135000 in debt.

Approximately 39000 is student loan (saline Mae)
11000 my car lease
And the rest miscellaneous personal loans and credit card debt
-approx 35000 in CC debt
-the rest in personal loans from navy federal

I have a decent income approximately 5000 a month.

I find myself struggling to pay my bills (I always pay more than the minimum) however sometimes my bills are late (not over 30 days late)

I find that my checking account is overdrawn more than it is possitive.

My current fico scores are hovering around 592

Should I be thinking about chapter 7 being so young? I did not aimlessly spend money, but was involved in a real estate deal that well went south.

I am committed to paying down this debt. I know I can tackle it. But should I consider chapter 7

Thank you all
Message 1 of 6
5 REPLIES 5
Anonymous
Not applicable

Re: Is bankruptcy something I should be thinking about?

In my opinion you should consider bankruptcy if you are unable to repay your debts. If you are committed to repaying them, I'd explore a debt management plan through a credit counseling agency. In addition, it's important to create a viable budget -- bankruptcy or not.

 

You should also know that the 40k you have in student loan debt is likely not dischargable. 

Message 2 of 6
StartingOver10
Moderator Emerita

Re: Is bankruptcy something I should be thinking about?


@Anonymous wrote:
Hello everyone,

I am 21 still in college finishing my degree in actuary.

I have accumulated approximately 135000 in debt.

Approximately 39000 is student loan (saline Mae)
11000 my car lease
And the rest miscellaneous personal loans and credit card debt
-approx 35000 in CC debt
-the rest in personal loans from navy federal

I have a decent income approximately 5000 a month.

I find myself struggling to pay my bills (I always pay more than the minimum) however sometimes my bills are late (not over 30 days late)

I find that my checking account is overdrawn more than it is possitive.

My current fico scores are hovering around 592

Should I be thinking about chapter 7 being so young? I did not aimlessly spend money, but was involved in a real estate deal that well went south.

I am committed to paying down this debt. I know I can tackle it. But should I consider chapter 7

Thank you all

From your original post -Taking a look at your debt, it looks like this (to me):

 

  1.  $39,000 in student loans
  2.  $11,000 with a car lease
  3.  $35,000 in cc debt
  4.  $50,000 with Navy Federal CU in personal loans.

Did you recently acquire these loans from Navy or did you obtain these loans throughout your collage education? 

 

If they are recent, it is very possible that Navy would contest your Bk.  Have you paid any of the debt back at all?  You need to make sure that if you are going to file, that the rest of your debt, other than the student loans, is actually dischargeable.  

 

From this side of the computer...it looks a little like you lived on the personal loans while attending school and now that you are graduating, you are filing Bk so you don't have to repay.  No judgment here....just food for thought. http://www.nolo.com/legal-encyclopedia/what-is-the-difference-between-dischargeable-nondischargeable-debts-bankruptcy.html

 

One more point:  your checking account is overdrawn because you aren't managing it with the right tools. You can't just use the online portal to your bank account for balances without also using some sort of ledger.  You can use a manuel ledger (free and easy) for your debits and credits to keep track so you don't overdraw your funds or you can use an electronic type ledger - separate from your bank's online portal. It will save you many hundreds of dollars over the year by simply tracking your expenses and your balances. 

 

Also, use a budget.  YNAB comes to mind. There are many others. 

Message 3 of 6
Anonymous
Not applicable

Re: Is bankruptcy something I should be thinking about?

Great idea for the checking account. I don't want to file bankruptcy I have been paying my debt down. I just find it hard to stay motivated. Let me ask, is a 5 year debt pay down strategy a good one (as an alternative to Bk and keeping my credit good)?
Message 4 of 6
Anonymous
Not applicable

Re: Is bankruptcy something I should be thinking about?

The loans thru NFCU are from February, they are two consolidation loans (internal consolidation) -navcheck and credit cards
Message 5 of 6
StartingOver10
Moderator Emerita

Re: Is bankruptcy something I should be thinking about?


@Anonymous wrote:
Great idea for the checking account. I don't want to file bankruptcy I have been paying my debt down. I just find it hard to stay motivated. Let me ask, is a 5 year debt pay down strategy a good one (as an alternative to Bk and keeping my credit good)?

^^Yes, a 5 year debt paydown strategy is a good one.

 

You will need to set up your budget so you aren't charging as you are going. One of the ways you can knock down your debt is through the snowball method. Look it up. 

 

After you have made payments for a year or two, you can re-evaluate your debt. 

If I were in your shoes I would find additional income too - like UBER or LYFT and apply the income toward savings (for a cushion) and your debt. 

 

You are at the beginning of a career (almost). Don't shoot yourself in the foot by filing BK without trying to pay it off. You just now got those consolidation loans 3 months ago. Navy is an excellent CU. I think you would regret burning them so early in your lifetime. 

 

Message 6 of 6
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