I’m in a tough spot right now. I have $27k in credit card debt, over $50k in student loans, and $25k left on my car loan. I’ve got less than $1k in savings. My income is $1400 every two weeks, but $1k goes straight to my mom for rent.
Is bankruptcy my only real option, or should I try to figure out a way to pay this off? Any advice would be appreciated.
Before jumping to bankruptcy, call your credit card companies and ask for their hardship programs. Use words like ‘hardship’ and ‘loss of income.’ Sometimes they’ll reduce your interest rates to 0% or set up smaller monthly payments. If that doesn’t work, then you can look at bankruptcy as a last resort.
@Keir
Does doing this affect your credit score? And once the payment plan is done, do they close your account? I’ve heard that happens sometimes.
@Keir
All my cards are maxed out, and I’ve been trying to pay them off for over a year. Chase is threatening to close my account soon, and I might get sued if I don’t act. I don’t think calling them will help.
@Valen
It’s worth a shot. Worst-case scenario, they say no. Best-case, they work with you, and you start reducing your debt. Right now, it seems like most of your payments are just going toward interest.
Why are you paying your mom so much rent? Can you move somewhere cheaper or get roommates? She should be helping you out more if she knows about your situation.
Kai said:
Why are you paying your mom so much rent? Can you move somewhere cheaper or get roommates? She should be helping you out more if she knows about your situation.
Does your mom even know how much debt you’re in?
@Weston
You should talk to her about this. Communication is key.
Kai said:
@Weston
You should talk to her about this. Communication is key.
She does know about my situation.
Why is your rent with your mom so high? Can you move closer to work and sell the car to get a cheaper one? You could also look for a second job to boost your income and use any extra money to start paying off the credit cards. Focus on knocking out the highest-interest debt first.
@Peyton
I’m a teacher, and selling the car won’t fix my debt. I’ve tried finding roommates, but nothing worked. I also do eBay as a side hustle.
Valen said:
@Peyton
I’m a teacher, and selling the car won’t fix my debt. I’ve tried finding roommates, but nothing worked. I also do eBay as a side hustle.
Have you checked Facebook Marketplace or Zillow for rooms to rent near your school? You could also tutor your students or bartend on weekends. Even working summers could bring in more cash to tackle the debt. As a teacher, you might qualify for student loan forgiveness after a certain number of years. Look into that.
@Peyton
I’m in my fifth year, so I think I need to finish it to qualify for forgiveness programs.
Bankruptcy could help with some of your debt, but student loans are harder to include. You’d need a lawyer to file an extra case for those. Most bankruptcy consultations are free, so it’s worth talking to someone. As for your rent, paying $1k to a relative might raise questions unless you can prove it’s reasonable for your area.
@Darby
I already spoke to an attorney, and they said bankruptcy is my best option. I pay $1k per month to my mom.
Valen said:
@Darby
I already spoke to an attorney, and they said bankruptcy is my best option. I pay $1k per month to my mom.
You should ask your attorney how hard it would be to include your student loans in the bankruptcy. If you work in a low-income school district, you might qualify for other forgiveness options too.
Valen said:
@Darby
I already spoke to an attorney, and they said bankruptcy is my best option. I pay $1k per month to my mom.
If you’re paying someone for advice, it’s probably a good idea to follow it.
@Riley
I’m not paying the lawyer yet. The $1k is for rent to my mom.
If you file for bankruptcy, it might not help as much as you think. You’ll still have your student loans and probably your car loan. Bankruptcy might clear the credit card debt, but that’s only about $200 in monthly payments. Instead of bankruptcy, focus on increasing your income and cutting expenses. Paying $1k in rent when you make $2800 doesn’t make sense. Either move somewhere cheaper or ask your mom for a break on rent. Get a second job or a better-paying job. Without those changes, bankruptcy won’t fix the underlying problem.
@Sloane
Chase is demanding $3000 next month, and I don’t make that in a month. Teaching is already one of the higher-paying jobs in my area at $54k per year.