We owe close to $50k ($46,558 to be exact). We’re a family of 4 (two adults, two young kids). It started during Covid when we both lost our jobs for 8+ months and still had bills to pay. Now I’m in school full-time, and my husband works full-time making about $83k/year (paid biweekly, $2700 per check). We live in a high-cost area.
Monthly expenses: Rent $1850, car payment $200, car insurance $400 (for 2 cars, one is paid off), health insurance $340, daycare $500, electric $250, credit card minimums $2023. Groceries are $150–200/week (shop at Aldi). We rarely eat out, maybe twice a month for takeout.
We don’t qualify for personal loans or refinancing. What options do we realistically have? Any advice is appreciated.
Joey said:
I’m in a similar situation. It’s so overwhelming trying to figure out where to start. You’re not alone.
A friend who works in finance suggested looking into Chapter 7 bankruptcy. Your credit will take a hit for about 3 years, but after that, you can start rebuilding with no debt. I’m considering it myself and plan to consult a bankruptcy lawyer soon. The $1300/month I’ve been paying toward credit cards could go into savings instead.
@Blake
I went through Chapter 7 a few years ago. The process was smoother than I expected but required gathering a lot of paperwork. Filing fees and lawyer costs vary, but it was worth it to start fresh.
Blake said: @Harley
How much did it cost you to file? I’ve heard quotes ranging from $800 to $2000.
My Chapter 7 filing cost $1200, and the process was straightforward. My lawyer handled everything, and it took about six months from filing to discharge. I had a credit card six months later, a car loan within a year, and a mortgage after three years.
Blake said: @Harley
How much did it cost you to file? I’ve heard quotes ranging from $800 to $2000.
I paid $2000 for my filing last year. It was stressful, but I started receiving credit card offers shortly after my discharge, and rebuilding has been manageable.
@Blake
I did Chapter 7 too. You’ll get credit card offers in the mail within a few months. It’s not as bad as people think and was one of the best decisions I made.
@Blake
Just keep in mind that a Chapter 7 bankruptcy stays on your credit report for 10 years. It may affect things like renting or getting loans, but it could still be the best option in your case.
Jobs need to pay more. I lived like this through most of my 20s and 30s. Once I got a better-paying job, things improved drastically. The problem isn’t debt—it’s income for most hardworking families.
Blaise said:
Jobs need to pay more. I lived like this through most of my 20s and 30s. Once I got a better-paying job, things improved drastically. The problem isn’t debt—it’s income for most hardworking families.
I agree 100%. My husband just got a better-paying job, so we’ve finally been able to stop using credit cards for daily expenses. But digging out of this debt is going to be tough.
@Blane
What’s your degree in? Unless it’s going to lead to $100k/year within the next two years, you might want to pause school and work. You could sell the car with a loan on it and make some cuts elsewhere.
@Kipp
Or they could find a side hustle they can do from home, like selling on eBay or working part-time. Putting education on hold can be risky. It’s better to find small ways to add income without sacrificing long-term goals.
Ollie said:
Pick up a part-time job. Not trying to sound harsh, but with finances this tight, a second income might be necessary.
You’re not harsh! It’s something we’ve been thinking about. Finding something that fits around my husband’s night shifts and my school schedule has been the hard part.
Look into shopping around for car insurance. $200/month per car seems high. If you can save money there, use it to pay off one of your higher-interest credit cards.
Flynn said:
Look into shopping around for car insurance. $200/month per car seems high. If you can save money there, use it to pay off one of your higher-interest credit cards.
I’ve tried, but this is the lowest we can get in Florida. It’s frustrating because we don’t have any accidents or tickets on our records.