Should I file bankruptcy or try to manage the debt?

Debt Management
1

I’m in a really tough spot with my finances. I owe $28,000 in credit card debt, over $50,000 in student loans, and $25,000 on a car loan. I live at home and pay my mom $1,000 in rent each month. My income is $1,490 every two weeks, and I have a master’s in education.

On top of that, I have a lot of medical issues and haven’t met my deductible yet, so doctor visits are super expensive. I have a side hustle, and I’m trying my best, but emergencies keep popping up, and the debt just grows. I’m completely overwhelmed and don’t know what to do anymore. Is bankruptcy my only way out? I can barely afford anything except my car payments.

2

Maybe, but there are other things to try first:

  1. See if selling your car and getting something cheaper could help.
  2. Check with your medical providers about payment plans—they might let you pay in smaller amounts.
  3. Try looking into debt consolidation or a 0% interest balance transfer credit card to help manage the credit card debt.
  4. For student loans, if they’re federal, look into income-driven repayment plans like SAVE.

Bankruptcy is an option, but it’s not always the best one. Think about whether it’s worth the long-term impact on your credit.

3

@Eli
I’ve already tried applying for debt consolidation but was denied. My credit score is 590, so I can’t get a transfer card either. I also didn’t qualify for the SAVE plan, and my student loans are both private and federal. They want over $500 a month.

4

@Nori
That’s a tough spot to be in. I hope you find some relief soon, whether it’s through bankruptcy or another way. Hang in there.

5

Why is your mom charging you $1,000 in rent? That’s basically covering her mortgage. If she let you stay rent-free for a while, it might help you catch up.

6

Jem said:
Why is your mom charging you $1,000 in rent? That’s basically covering her mortgage. If she let you stay rent-free for a while, it might help you catch up.

I’ve asked her, but she gets angry when I bring it up. She won’t let me stop paying rent.

7

@Nori
Could you stop paying for a couple of months to save up for filing fees? Some bankruptcy lawyers allow payment plans.

8

Jem said:
@Nori
Could you stop paying for a couple of months to save up for filing fees? Some bankruptcy lawyers allow payment plans.

She’d kick me out if I didn’t pay, and I don’t have anywhere else to go. Plus, I have a cat to take care of.

9

@Nori
Your mom should help you get back on your feet instead of adding to your stress. It’s tough to see parents doing this to their kids.

10

@Nori
What if you negotiated to pay her less, like $500 instead of $1,000? Would she still kick you out?

11

Tavi said:
@Nori
What if you negotiated to pay her less, like $500 instead of $1,000? Would she still kick you out?

She wouldn’t agree to that, and I can’t risk being homeless.

12

If your mom won’t lower the rent, maybe you could find a cheaper place or get roommates. Selling the car for something more affordable might help too. Could you pick up tutoring or another side gig?

13

Perrin said:
If your mom won’t lower the rent, maybe you could find a cheaper place or get roommates. Selling the car for something more affordable might help too. Could you pick up tutoring or another side gig?

She said I can move out if I don’t want to pay rent, but I can’t afford to live anywhere else right now.

14

Have you asked your credit card companies about balance transfers or lower interest rates? For medical bills, some providers offer financial aid programs. Can you explore student loan forgiveness programs, like those for public service jobs?

15

@Hollis
I’ve tried, but my credit score is too low to qualify for anything right now.

16

Nori said:
@Hollis
I’ve tried, but my credit score is too low to qualify for anything right now.

Some cards let you transfer balances without needing a new card. It’s worth checking with your current credit card providers.

17

If you can, sell the car and focus on paying down the credit cards. Living at home should make it easier to save money.

18

Teal said:
If you can, sell the car and focus on paying down the credit cards. Living at home should make it easier to save money.

I need the car for work and gas is already expensive. It’s hard to save when basic needs like food and gas cost so much.

19

@Nori
Could you look for a higher-paying job or one closer to home?

20

Lee said:
@Nori
Could you look for a higher-paying job or one closer to home?

I’m a teacher, so there aren’t many options that pay more.