i am considerin
[ Edited ]
09-05-2011 08:07 PM - edited 09-05-2011 08:15 PM
i am 25 years old with a federal job making approx $32k a year. I have approx $10,200 in consumer debt and about $42k in student loans..would i qualify for bankruptcy?..any suggestions? i REALLY do not want to go this route!
also if i file would i still have to pay a fee to someone for the next 7 years or do i just put everything in it? only about $3500 of the conumer debt is CC, about 2k is a loans, a doctors bill and other misc..i dont know my all of my credit scores..one of them is 650 and one maybe a 602.
Re: i am considerin
09-05-2011 08:20 PM
i am 25 years old with a federal job making approx $32k a year. I have approx $10,200 in consumer debt and about $42k in student loans..would i qualify for bankruptcy? also if i file woiuld i mean i still have to pay a fee to someone for the next 7 years or do i just put everything in it? only about $3500 of the conumer debt is CC, about 2k is a loans, a doctors bill and other misc bills..any suggestions? i REALLY do not want to go this route..
Who are your student loans with? Sallie Mae (and I'm sure many others) is very willing to work with you as far as reducing payments or granting you a financial hardship forbearance. They'll probably charge you a small fee, like $150, but it's better than having to pay every month.
This might seem obvious, but definitely look into reducing everyday costs. Bring a lunch to work, consider public transportation, move to a cheaper apartment if possible. I did a bit of this myself when I noticed my CC debt wasn't going down even though I was putting a good amount of my paycheck into it every 2 weeks. I noticed I was spending on average $900/mo and I had no idea where it was all going. For the past 6 weeks I've cut spending down to $75 per week without much trouble.
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Re: i am considerin
09-05-2011 08:38 PM
i consiladed all my loans with the goverment awhile ago..im actually on a 6 month forberance from them rignt now..i have 5 CC total and they are all maxed out but the balance on the highest one is 1060 which is also the credit limit, and the balance on my lowest is 300 which is also my credit limit. i take public transportation already cause i have a vison disorder that makes driving difficult but i must admit i have an online shopping problem and i have been taking out payday loans to cover alot of bills. i just want to wipe my slate clean but dont know if this is my OJLY option...
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.
Re: i am considerin
09-11-2011 05:21 PM
thank you so much for your advice! what i really want to do is to consolidate everything that i can (excluding the loans) but i dont know if i should do credit counseling or debt reduction etc. i want to avoid the BK route but i swear every month it feels like im drowing. i will talk to my currrent psychiatrist about help for my shopping problems though. i am worried that this 10K is going to turn into 20 or 30k in a few years. I also want to move to NYC in about a year and i knmow that a BK will probably cripple my chances of finding an apartment and i do not want to get a roommate. again i thank you A LOT for your advice
Re: i am considerin
09-12-2011 06:56 PM
You might try negotiating directly with your creditors and avoid credit counseling and debt reduction. I was able to negotiate with most of my creditors directly to get sizeable reductions in interest rates. For example, Bank of America reduced the interest on my two credit cards from 28.9 percent down to 6 percent on one card and 4 percent on another card. If you have debts on medical bills, I think you'll have also have a good chance there to work out a payment plan.
A problem with both credit counseling and debt reduction is, as I understand it, you might have multiple late payments show on your credit report while those programs negotiate with your creditors and put your accounts under their programs. If you negotiate yourself, you avoid the late payments and better protect your credit.