Re: i am considerin
09-05-2011 11:05 PM
I know your debt must feel overwhelming. I can relate to that because I filed BK six monts ago on $33,000 on credit card debt. I also have $60,000 in student loans, and I understand your concerns about this. The student loans were not discharged and student debt can't be discharged. (I read one case where a judge thought a private student loan lender had treated someone unfairly and discharged those student loans in BK, but that is highly unusual.) Student loan debt possibly can be discharged if a BK judge finds someone has a disability that will make it too difficult to repay the loans. You have a stable government job and you're young, so I don't how a judge might view your vision difficulties on forgiving student loans. It might be something to talk to an BK attorney about.
BK is a very serious matter, and my advice is that $10k in dischargable debt isn't worth the heartache and other pain it will cost you. BK can also affect federal government security clearances. That is somthing you may want to consider. It can make it difficult to rent an apartment, buy a home, buy a car, etc. That said, those of us who file BK move forward and recover. I have no regrets about filing but wish I knew more so I could have filed smarter. For example, I just learned this week from a Transunion credit rep that the number of accounts you include in bankruptcy affects your credit score; the more accounts you have in BK the harder hit your score takes. If I had known that, I would have paid off small accounts of a just a few hundred dollars and included only the larger amounts so it would have harmed my credit score less.
Credit counseling programs that help you consolidate your non-student loans,negotiate lower interest rates and set up a repayment program with your lenders (not debt reduction), doesn't hurt your credit score, according to Credit.com. Even better is to try to negotiate with your creditors yourself to get lower interest rates or reasonable repayment plan, if that would help you.
There are options available to you for student loans that I don't know if you've looked into. If you have federal student loans, because you work for the government you can participate in a federal program that will allow you to make payments based on your income and then any outstanding loan amounts you have after you've paid on the loans for 10 years will be forgiven. That might be a good deal for you. Here is the link for that information:
federal student loan, public service repayment plan
Another option open to you as a federal employee is that some federal agencies appear to have a recruitment and retention program whereby the agency you work for may repay up to $10k annually for you in student loan debt. Here is some information on that:
student loan assistance for federal employees
If you feel your shopping impulses areserious and harming you by pushing you further into debt, you might use your health insurance to get counseling to help you control your shopping impulses. You might also talk with somone you trust and think is wise about your debt situation. You might also seek the advice of a financial advisor. A BK attorney will probably tell you to file; that's how he/she makes a living. I would try to find someone else to advise you about whether to file than a BK attorney, who otherwise can be most helpful if you decide to file.
I really wish you the best. It must be overwhelming to you to be so young and feel you have this burden of debt. But you're employed and $10k in dischargeable debt really isn't worth the hit you'll take, in my opinion. I think if you start exploring options open to you and get expert advice on how to deal with your debt and control your spending, there'll be a way you can pull out of this and avoid BK, and you'll be much better off.