Hello. This board has been very helpful to me, and I was hoping for some advice regarding my current debt and credit situation.
Several years ago I was let go from my job, and I decided to go back to school. Unfortunately poor grades from 15 years ago prevented me from getting federal student loans, so I turned to private loans. A family member helped me by co-signing for these loans. Just around the same time I was starting to rebuild my credit, and I opened several credit cards.
So now I'm in a situation where I've gotten myself into a lot of debt. I'm working full-time in the computer field, but starting out and not making a ton of money. During my period of school and unemployment, I've racked up about $23k worth of credit card debt, spread out over 8 cards (many of them now maxed). I'm also carrying 4 private student loan debts, totaling $50k (45k principal, 5k interest). My income is only about $37.5k / year. I have no assets whatsoever, except maybe my car which I still owe $5k on, and it's probably worth about the same.
The school loans are still in deferment because I'm still enrolled in school (pursuing my bachelors). I have not had to, nor have I started making any payments, however as private loans they are garnering interest. Another wrinkle is that I have a family member who co-signed on these loans, so I don’t want to do anything that will hurt their credit or finances. (Although this person doesn’t really have much in the way of assets either).
I've gotten to the point where the credit card minimum payments are approaching $600/month. I've been making them and not behind in anything as of yet, and credit score is in high 600's. I'm trying to 'right the ship' and start living within my means/paying-off my debts, but at this rate it's going to be tough.
I called a credit counseling company, who want to put me on a DMP to pay off the credit cards in 5 years. They can reduce the interest rates on the cards, but I'll still be in the $550/month range for payments. This doesn't even touch the student loans, which will continue to grow.
Should I consider bankruptcy? Is that even possible for private student loans? Would any consolidation loans be available to me for the student loans? What if I filed bankruptcy for the credit card debt, and then just focused on paying-off the student loans? Would contacting the card issuers themselves do me any good, as opposed to going through a counseling agency? Is there a way out of this situation without destroying my finances forever?