I’m 28 and trying to figure out if filing for bankruptcy is the right choice. I make $48,000 a year before taxes and do some side work as a driver for extra income. My total debt is $32,000—$22,000 from a car loan and the rest in collections. My monthly expenses include $880 for rent and $700 for my car payment and insurance.
I want to pay off my debt, but it feels like I’d have nothing left after covering bills. I’d love to focus on my future, like traveling, improving my living situation, or starting a business. This debt has been hanging over me for a while, and I just want to start fresh. Is bankruptcy the right choice, or should I try something else?
Have you thought about selling your car, paying off the loan, and buying an older, cheaper one? Not sure if that’s realistic these days, but it could help.
You’re 28 and already thinking of a ‘fresh start’? You’ve barely started.
Look, you earn $48k, which is about $3k a month after taxes. Your rent and car costs are $1,500, so where’s the other $1,500 going? You can figure this out. Cut expenses, find ways to earn more, and start paying off what you owe. It’ll take some work, but it’s better than bankruptcy.
@Aris
I agree. What are you spending that extra money on? If you want to achieve your goals, you need to focus on lowering expenses and boosting income. Have you tried negotiating with the collections agencies? Are you making any payments to them now?
If you want to pay off your debt, you might need to put vacations on hold for now. Your income seems decent, but it looks like your expenses are the problem. Cut back wherever you can and start from there.
I’ve been there. I’m 42 now, but last year, I owed $67,000 total—$45k on credit cards and $22k for my car. I got tired of just making minimum payments, so I worked seven days a week and paid off $32,000 in a year. Now, I’ve got $9k left on my cards and $21k on my car. Once the cards are cleared, all my income will go to the car loan. It’s hard work, but it’s worth it. Bankruptcy might sound easier, but grinding through it teaches you how to manage money better. You’ve got this.
Are you planning to keep your car if you file for bankruptcy? If you give up the car, it might make more sense to consider bankruptcy. Otherwise, it seems like your main issue is an income gap.
Jules said:
Are you planning to keep your car if you file for bankruptcy? If you give up the car, it might make more sense to consider bankruptcy. Otherwise, it seems like your main issue is an income gap.
Yeah, it sounds like the income is the real issue here, not the debt.
Your car might be repossessed if you try to file, so selling it and buying something cheaper could be a better option. Focus on minimum payments and put any extra cash toward the smallest debts first. Once those are gone, it’ll feel a lot easier. Forget about vacations for now—cut back and keep reminding yourself this is just temporary. The sooner you handle this, the sooner you can live the life you want.
I filed for bankruptcy after my divorce, and I regret it. Nine years later, I’m still struggling to get credit cards with decent limits or interest rates. I can’t get a car loan or mortgage. Bankruptcy stays with you for a long time. If I could go back, I’d just pay it off.
@Sage
I had the opposite experience. I filed 20 years ago, and it was the best decision for me. I learned how to manage money without credit, and now my credit score is close to 800. I’ve bought a house and paid off a car since then.
@Corey
That’s great it worked for you. I’m nine years in and still struggling. I make three times what I used to, but it’s been hard with the limits bankruptcy puts on you.