I’ve made some bad financial decisions over the years, including taking out some predatory loans when I was desperate. Bankruptcy feels like a last resort I want to avoid, especially since I’m 41 and my health isn’t great. I’m overwhelmed by how to start fixing this and worried about falling for scams offering debt relief.
My income is small, and my debts are huge—medical and otherwise. I’m open to sharing more details if that helps. Any advice would mean a lot. Thank you.
I filed for Chapter 7 bankruptcy two years ago and it wiped out about $60k in credit card and loan debt. It can also clear medical bills. My credit score dropped, but it started improving pretty quickly. Some people say theirs didn’t drop much at all.
You can still keep things like a house or car if you reaffirm the loans. I’d recommend meeting with a bankruptcy lawyer for a free consultation—they’ll explain everything. It might not be as bad an option as you think.
Payne said: @Eliot
You make a good case for it. I owe way more than I can pay, and my credit score is already terrible. What’s involved in the process?
It’s not too hard. We met with a lawyer, gathered documents like taxes and bank statements, and listed all creditors. Then we did a 2-hour online credit counseling course. After that, there was a short call with the trustee to review everything. It was done in under a month.
@Payne
Our lawyer charged $1750, which we paid before filing. We used retirement savings to cover it and catch up on our mortgage. Some lawyers might be willing to work with you on payment. If you stop paying certain debts, you might save enough for the lawyer fee.
@Eliot
Thanks so much for explaining. I feel a bit less scared about it now. I’ll start looking for consultations and see if I can find someone flexible with payment.
Payne said: @Eliot
Thanks so much for explaining. I feel a bit less scared about it now. I’ll start looking for consultations and see if I can find someone flexible with payment.
Definitely give it a try. It’s like a weight lifted once you know you can fix it.
Payne said: @Eliot
You make a good case for it. I owe way more than I can pay, and my credit score is already terrible. What’s involved in the process?
Just a heads-up, federal student loans can’t be discharged in bankruptcy.
It might help to list out your income, expenses, and debts to see where you stand. Start by making a budget and cutting unnecessary spending. Meal prep, avoid eating out, and work on building a small emergency fund before tackling your highest-interest debts.
If you can increase your income or pick up extra work, it’ll speed things up. It’s tough, but it’s doable.
Can you share more details about your situation? Like your income, types of debt, interest rates, credit score, housing costs, and monthly spending? That would help us give better advice.
Look into Dave Ramsey’s resources. He’s not everyone’s favorite, but his debt snowball method helped me pay off over $20k. It takes time, but if you stick with it, you’ll make progress. Good luck!
Consumer Credit Counseling agencies can negotiate with your creditors and set up a single monthly payment for you. They often secure lower interest rates. I used one in the 90s, and it really helped me turn things around. Here’s a list of government-approved agencies.
@Jamie
That’s not how it worked for me. I filed Chapter 7 two years ago, and the only cost was the $1750 lawyer fee. My accounts weren’t frozen, and I got to keep my house and car by reaffirming those loans. It might depend on your situation, but it was much simpler than I expected.