Underwater 70k in debt and can't find a way out

creditlady · ‎01-12-2017

My husband and I have been underneath debt for 5 years now. We are on hardship plans, we have contacted our creditors. We have about 10 credit cards all maxed so our scores are low. Making extra payments here and there have helped but we havent made a single dent in our debt. It was at 80k total debt and now just down to 74k

We are now starting to miss payments on our hardship plans because we just had another child and all of our extra money is going towards the child.

Is something like freedom debt relief a good situation? we cannot go for bankruptcy as we have family as our cosigners on our student loans and once we file for bankruptcy they will be liable for over 50k in our student loan debt in full. So that is not an option.

It seems now our only option is to stop paying and have others negotiate on our behalf. That would take our stress levels down a ton. Is that our only option?

rmduhon · ‎01-12-2017

Student loans aren't included in BK. Just thought I'd point this out.

MrsCHX · ‎01-12-2017

SL are not dischargeable in bankruptcy though -- are these private loans? Did an attorney tell you that the cosigner will be liable?

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StartingOver10 · ‎01-12-2017

First, does the $70k include your student loans? If so, then you are really only looking at $20k.

Second, you haven't given any income information. If your HH income is $100k per year and your debt is $70k including student loans - then that is a budgetary issue. Do you both work? What is your income? Your spouse's income? Do you have a written budget?

Also, the others are right. Since Student Loans are not dischargeable in Bk, that means you would still be responsible for repayment and not your co-signers. Does this information change anything for you?

creditlady · ‎01-12-2017

@rmduhon wrote:
Student loans aren't included in BK. Just thought I'd point this out.

Its a private student loan. So if I file for BK it automatically goes into default whether its included or not. Its written out in the terms

creditlady · ‎01-12-2017

@StartingOver10 wrote:
First, does the $70k include your student loans? If so, then you are really only looking at $20k.

Second, you haven't given any income information. If your HH income is $100k per year and your debt is $70k including student loans - then that is a budgetary issue. Do you both work? What is your income? Your spouse's income? Do you have a written budget?

Also, the others are right. Since Student Loans are not dischargeable in Bk, that means you would still be responsible for repayment and not your co-signers. Does this information change anything for you?

No the 70k is credit card debt and a 15k prosper loan. Student loans are a separate deal.

Our income combined is 82k

We bring in 8000 per month

Our bills with credit card payments/ gas/food/mortgage/car payments/insurance etc are 7700 per month

We are literally left with 400 per month after all of that.

We have depleted our savings, our 401k is not that much maybe 5000 max, we have no equity in our house. We have sold TONS of things to get the balances down without even making a dent.

Just freeing up this credit card debt and stop if we just paying it today will literally save us $2500 per month combined with what we are having left over now will be $3000 per month in savings and peace of mind. This money could go towards our savings and our newborns future(daycare costs, food, diapers etc).

RobertEG · ‎01-12-2017

Once you become delinquent on an account, the creditor has the option of bringing civil action seeking a judgment.

They can then seek an additional order by the court ("writ of satisfaction") to attach assets or garnish pay if you do not comply with satisfaction of the judgment.

It then becomes an issue with the court as to how much of your assets they can attach or pay they can garnish. Some assets or income is not subject to attachment or garnishment, while other assets or types/amounts of income may be. You need to know what they are able to go after......

I would recommend consulting an attorney for advise as to what they may or may not be able to obtain should they first obtain a judgment.

StartingOver10 · ‎01-12-2017

@creditlady wrote:
@StartingOver10 wrote:
First, does the $70k include your student loans? If so, then you are really only looking at $20k.

Second, you haven't given any income information. If your HH income is $100k per year and your debt is $70k including student loans - then that is a budgetary issue. Do you both work? What is your income? Your spouse's income? Do you have a written budget?

Also, the others are right. Since Student Loans are not dischargeable in Bk, that means you would still be responsible for repayment and not your co-signers. Does this information change anything for you?

No the 70k is credit card debt and a 15k prosper loan. Student loans are a separate deal.

Our income combined is 82k
We bring in 8000 per month
Our bills with credit card payments/ gas/food/mortgage/car payments/insurance etc are 7700 per month

We are literally left with 400 per month after all of that.

We have depleted our savings, our 401k is not that much maybe 5000 max, we have no equity in our house. We have sold TONS of things to get the balances down without even making a dent.

Just freeing up this credit card debt and stop if we just paying it today will literally save us $2500 per month combined with what we are having left over now will be $3000 per month in savings and peace of mind. This money could go towards our savings and our newborns future(daycare costs, food, diapers etc).

Ok, now we have a better picture. It is worth exploring bk in your situation. You may end up in a Ch 13 with your income (or not), but it is worth exploring with a few good Bk attorneys'. In fact a Ch 13 may be preferable given your particular circumstances. There are plans starting as low as zero/month (rare), but you already are in payment hell. Consider interviewing a few attorney's (debtor attorney's and not creditor attorney's) to see if a payment to the SL co's can be included in your plan. I don't know. Here is a link to get you started with your research: https://www.nolo.com/legal-encyclopedia/student-loans-chapter-13-bankruptcy.html

enjoimorenow · ‎01-12-2017

I included a private student loan (with co-signer) in BK and it was not discharged or given derog marks. It still shows all payments were made on time, and is still current, paying as agreed and I continue to make my monthly payments on it. They did send a letter to the co-signer that I filed BK, but I was able to keep the loan and continue paying it. They didn't go after the co-signer for the money.

May be worth a call and looking into, because I don't think you can discharge a private student loan in BK, but maybe I'm wrong.

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creditlady · ‎01-12-2017

@enjoimorenow wrote:
I included a private student loan (with co-signer) in BK and it was not discharged or given derog marks. It still shows all payments were made on time, and is still current, paying as agreed and I continue to make my monthly payments on it. They did send a letter to the co-signer that I filed BK, but I was able to keep the loan and continue paying it. They didn't go after the co-signer for the money.

May be worth a call and looking into, because I don't think you can discharge a private student loan in BK, but maybe I'm wrong.

Really?

Who is your student loan through? This gives me some hope

As to Roberts response I live in Texas so they cannot garnish any of our wages except for alimony, child support and student loans.