For context, I’m 23 years old and was never really taught money management. I moved out when I was 16, got my first credit card at 18, and was doing well—my credit score was in the high 700s. A year ago, I opened a salon under my name (not as an LLC) using a $30k personal loan. Unfortunately, the salon didn’t succeed, and now I’m struggling to repay my loans.
I owe roughly $20k in personal loans, $5k in student loans, and $3k in credit card debt. I’ve been working hard to pay off what I can (starting with the smallest amounts first—my credit cards), but I’m still getting calls from debt collectors, and I’m really scared they’re going to sue me. I did contact them and explained that I had a significant decrease in income, so they paused my payments for two months. I’ve since paid off two credit cards and am working on the last one.
I currently do hair as a booth renter, making anywhere from $1.1k to $2.1k a month. I don’t pay our mortgage (I’m not on the mortgage at all), don’t have a car payment (the car has been paid off since 2020 and isn’t in my name), and don’t have any assets. I cover our utilities, my salon overhead, groceries, and take care of our animals, which leaves me with about $100 to $300 a month to put toward bills. I’m feeling so overwhelmed, and if I get sued, I have nothing to give them unless they garnish my wages.
Is filing for Chapter 7 bankruptcy a good idea? How much does it cost in North Carolina? Or should I stick to what I’ve been doing and slowly keep paying everything off, from smallest to largest? I’ve heard that’s the best way to get out of debt quickly. I’m just clueless and feel really uncomfortable discussing my finances with anyone close to me.
