hello guys, I hope you’re all doing well.
I’m seeking some advice. I currently have around $50k in debt, broken down as follows:
- $5,400 for my car loan (the car is worth about $10k)
- $32,000 in credit card debt
- $14,000 in personal (unsecured) loans
I make about $60k annually after taxes and work in EMS, where I can earn extra through overtime. I plan to work 60-72 hours a week at $25 an hour starting this month. My monthly expenses include: $1,800 for rent, $160 for internet, $115 for two cell phone lines, $90 for pet insurance (three cats), $170 for electricity, and about $400 for groceries. I live with my SO, who contributes a few hundred dollars monthly for groceries and other bills. She’s also looking for a job and hopes to start door dashing with our old car, which is nearing 180k miles.
Right now, I’m overdrafted each week, and late fees are starting to accumulate. I’m in discussions with MMI about a Debt Management Plan (DMP) that would consolidate my credit card debt into a $750 monthly payment, which would save me money over time. I’ve also thought about bankruptcy, but I’m concerned about losing my car (which is more reliable than the one I plan to give to my SO) and possibly being without credit for several years. I’m open to giving up my credit if it means finally being stress-free. I’ve seen many people turn their lives around with great advice on here. Thanks for your help!
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It’s not like you lose your automobile. Despite filing for bankruptcy, I kept my automobile. Yes, your credit will be bad for a while, but at least you’ll have a fresh start and a great deal of peace of mind from it. Consult a lawyer. Typically, a consultation is free of charge.
Your sweetheart is in your arms. It is appropriate to split the rent. Utilities and phone bills would be cut in half. Your meals may cost you $300 a month or more. I’m not sure who brought the three cats in, but if they belong to her, she is responsible for covering their food and insurance costs. You would receive an additional $1100 each month as a result.
For a lot less, you may hire a room with notice. It’s your girlfriend’s housing issue, not yours. If the stakes are increased, she can be motivated to look for work at any time.
This is the Bay Area rent for a one-bedroom unit.
Insolvency will also incur expenses.
Make the SO work any job and contribute all of their income to the debt. The notion that someone cannot obtain employment is utterly absurd. In my region, Chipotle has signs indicating that they are recruiting at $16 per hour. Retail and restaurant businesses of all kinds are hiring.
You mentioned that your annual income after taxes is $60k, which breaks down to $5,000 per month. With $2,735 in listed expenses, that should leave you around $2,265 to apply towards your debt each month. So, it’s puzzling that you’re going into overdraft. It seems like there might be additional bills or expenses you’re not accounting for like car insurance, gas, pet food (unless that’s included in your grocery budget), and any discretionary spending or entertainment costs.
To address this, start by creating a detailed budget to track all your spending accurately. Based on your numbers, there shouldn’t be a reason for you to be overdrafting, let alone considering bankruptcy. It’s particularly concerning since your SO is not working full-time. If you’re truly only left with $100 extra each month after covering all minimum payments, that’s one thing. But if you should have $1,200 left over, then the situation looks different. I’d suggest focusing on getting a clear picture of your finances before deciding on bankruptcy, especially if there’s a full-time job opportunity that hasn’t been explored yet.
I’m not sure how viable DoorDash is, especially with an older car that might need repairs as it gets more wear and tear. However, getting your SO a job is crucial to avoiding bankruptcy. That said, bankruptcy might still be a valid option to consider.
The important thing is to figure out how to prevent this situation from happening again. Reflect on what led to this debt and how you can avoid similar issues in the future. If you can increase your work hours by 20 a week and apply that extra income to your credit card debt, it would help, but you might still be looking at a few years to pay it off. This makes bankruptcy a more appealing option.
Additionally, consider reaching out to your banks to explain your situation and see if they can offer any assistance. It’s worth asking.
Bankruptcy shouldn’t be on your radar right now. It’s a shortcut that might not solve your underlying issues.
The main problem is that your girlfriend isn’t working. If she found a job, even a fast-food position, it would significantly improve your financial situation. She needs to focus on getting a job immediately her full-time job right now is finding work. She should be dedicating at least 40 hours a week to job hunting.
With her working (even in a less-than-ideal job or two), you taking on extra hours, and cutting out all non-essential expenses, you could turn things around quickly.
It won’t be easy or enjoyable, but if you manage to get through this, you’ll likely learn valuable lessons and avoid similar problems in the future.
If you file for bankruptcy, they might force you to sell one of your two cars, but you might give it to your girlfriend instead. However, it would require a fair market value. Given that it’s a beater, it might also be included in your permitted resources.
It takes ten years for the bankruptcy to be removed from your file. It is better to take action right away. Your credit will suffer, but if you make as few late payments as possible, your score will return to average in two years.