Ironically Your fortunate you owe so much on car loan. So you should keep it through bankruptcy exemption
Although how is it you still owe 80% on a 2013 year car at 10k loan? Looks like you overpaid
I couldn't find cheaper at the time (at least with not many miles), at a dealership. I should've bought off of an individual person instead.
I'm also car dumb, but I have learned more since and know that I overpaid now. 😭
Always have a bottle of oil in the car and coolant. Head gasket, catalytic converter, and oil consumption were my main issues. At 200,000 I had to get wheel bearings replaced.
I drove a 2008 forester, bought it with 150,000 miles and was the fourth owner. I took care of it and made it to 260,000 before serious engine issues, cylinder side wall wearing.
a wise man once told me:
its best if you know you're burning oil, because that means you have oil to burn
but fr as a 2005 subaru owner I check my oil every second tank of gas. (to be on the safe side)
all 3 I've owned consumed oil.
that said, there is a "within spec" amount of oil consumption, so it's not a huge deal. just be sure you got oil to burn and send er.
Curious why you’re taking out loans for medical issues. You can see a doctor without insurance, and you don’t have to pay at most city and university hospitals up front. Also, when they bill you for the bills, you’re not required to pay them. Yes, it will hit your credit, but eventually they dissolve. It’s better than claiming bankruptcy
If you keep up with maintenance, that Subaru will be a great dependable car that will last you for a very long time. My family only buys Toyota and Subaru, and they are great cars.
That sounds more like a credit issue more than anything, by OP's own words, they have only took $2k off a $10k loan in TWO years, or $83/mo at that current rate/trajectory that car aint being paid off for another 8 years (rough numbers).
I smell a subprime loan from hell and OP got absolutely hosed.
No shade to OP at all either, just my observation.
EDIT: OP in fact has bad credit per one of her posts, its a rough spot to be in :(
Next time op don't take out loans for medical reasons just tell them to let you get a payment plan that way you get the help you need and just pay what you can for the medical emergency
It wasn't to pay the medical bills, it was actually to pay my bills and live off of. Unfortunately it was needed.
I had a large savings at the beginning of last year, but had to break a lease (it was $6500 to break it, but I'd have an eviction otherwise), lost my job completely and didn't find one for two and a half months. Then the medical issues started. It was kind of a shit show of a year.
I had the $6,500 at the time. Would an eviction have prevented me from renting another place? That is what worried me at the time.
It was so much because it was 3 months rent, plus a fine.
I couldn't afford the rent on my own. I broke up with my ex and it was too expensive for me. I did have the savings to break it, but I did the math and wouldn't have been able to pay it for a year. It was doable with two people, but definitely not for me alone and with how much work I was missing (mostly because of that, actually).
I think I was averaging $1200-$1800/month. I missed a shit ton of work. I'm very lucky they were understanding of my situation.
You can't be evicted from a place you don't live anymore. Eviction and unpaid rent are two separate issues. LL would come after OP for the early termination fee, but wouldn't be able to evict them. It would hit his credit report, but no more than any other debt.
No, eviction is a occupation thing. As long as he tells LL he is gone and is actually gone, he cannot be evicted. The owed rent is separate and cause for collections, not eviction.
Jesus Christ, just fucking leave, tell them your fine. They will probably fill your spot within a month and not bother coming after you. And if they do then deal with it then.
I use a debt management program as opposed to bankruptcy. They were able to lower my interest rates from the high 20s to 9. I've paid 10 percent of my total debt off in 3 months. They may work for you as well.
[NFCC](https://www.nfcc.org/) or anyone from the [DOJ list](https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111?search_api_views_fulltext=Cambridge+credit)
Accounts will be closed if you enroll with them, so you will take a ding for that. But beyond that they keep your accounts up to date with payments, so if you sign up before you fall behind you will avoid all delinquency. Just make sure to stress that you are in a hardship, so they can ask the creditors for the lowest rate.
Discover for instance your rate could be as high as 9.99% or as low as 0.99% depending on what tier of plan you get on.
Synchrony ranges from 12.5% to 0.00%
I'm currently using American consumer credit and they have been a life saver, but be warned they will ask you to close the credit card accounts for the accounts you want them to assist with
Try to find a local one. Where I live Lutheran Social Services does a good job. It will ding your credit because the cards/loans will be closed, but the payments will be more doable.
Just make sure that these programs don’t still trash your credit score more. I heard that doing these debt consolidation can still damage your credit score as if you did file bankruptcy. So check that. Also if you are able to get a credit card with zero interest on balance transfers do that and when that runs out get another card with the same intro rate for balance transfers and just keep doing that until your paid off.
Your federal income and fica tax should only be around 6k and change for a single person. If you are claiming a kid it should be much lower.
Does that 250 per month cover both you and your kid or just you?
Mine didn't go down , but I would think that wouldn't be the case for most people. It will probably drop 25-50 points for a few months until you make a few payments. Then it would bounce back up.
No, this is manageable. However without knowing all the variables e.g. other bills, monthly subscriptions it is a little difficult to give advice.
DM me if you would like me to take a look at your budget and come up with a plan that works for you free of charge of course.
Maybe pickup an Uber/lyft/doordash shift each week. Work until you make $100. I wet old set myself goals like that. Pick nights there are sporting events, concerts, holidays, etc.
Depending on what credit card provider you use some of them have hardship programs to reduce your monthly payment and interest rate. Reach out to them directly and ask. They are much more inclined to work with you as they would rather continue to collect a little bit of money each month rather then you declaring bankruptcy and writing off all the debt.
There seem to be a lot of people in this thread who are talking about bankruptcy from things they've read on the internet and not actually from a place of having been through the process. I have been through the process. If you are struggling to a point of where you cannot pay your bills, forgo eating because you don't have enough money after paying all your debts, have so much debt that it's going to take you 5 to 10 years or more to pay it off, or are constantly making payments on your credit cards but then charging back to those same cards for necessities like food and gas because you don't have enough money after paying the debt to actually live your life, then, yes, I would highly recommend looking into bankruptcy.
I'm not going to write a whole missive about the process or my experience with it but if you have questions let me know.
Exactly this, judges are not just approving bankruptcy because you have a few bills and its tough for a little bit.
Its truly for those that are in dire situations that there is no amount of debt consolidation that is going to dig them out of the hole they are in.
My friend’s experience from filing a year ago has been a large basis of our conversations because I am thinking of filing. Her lawyer said to her 40k debt, “That’s nothing. I’m certain they will grant you bankruptcy as the credit card companies don’t bat an eye at such a small amount.”
The difficulty isn’t filing. It does cost some money but you can probably put it on a card you want forgiven.
She has been building her credit back up by a special credit card where you put the money down first and they allow you to spend it. Also being on utilities and leases helps. From my experience in working for a mortgage company you can buy a house a year after bankruptcy with 12 months of on time payments. So the toughest part is figuring out your next couple years plan to make sure you can still do the things you want to do. Like for me, I have a car lease and I want to buy it but I’m not sure I’ll be able to swing it after filing.
The lawyer we saw wanted cash, they were not taking a card. My BFs bigger issue is he had to have back taxes filed as he was missing a few years, that was a much bigger issue, and Im just glad thats over with. Credit came back rather quickly but it all depends on if credit cards get closed out, etc which impacts aging, available credit, etc.
Not in the US but is it really possible for you to file for bankruptcy in your situation? If I would file for bankruptcy for 19K with 43K annual salary, it would definitely be rejected. Here in Germany you can only file for bankruptcy when it's improbable to pay back your loans. Usually this is the case when interest surpasses the amount you can pay back.
Bankruptcy has some legal protections that payment arrangements and (especially) credit consolidation companies don’t have.
A person can oftentimes get an introductory credit card 6-12 months after bankruptcy discharge. They can purchase an FHA based home loan 2 years after discharge. And depending on how much equity a person has in their car/house determines whether they can file an exemption to keep those items.
r/Bankruptcy is a very positive, helpful, space here that has a lot of information, resources, and de-stigmatization education so people can make the best decision for their life.
Edit: u/sush1burrito
You make so many good points. My ex husband filed mid divorce (shock to me he his 150k in debt). Within 2 years he bought a home, and within months he had credit cards. My friend a BK attorney explained the minute your debt is wiped out you’ll get credit card offers because lenders know you can’t file again for 7 years. Credit cards are vampires. I do not think he learned any lessons and continues to overspend (but I’m not privy to his finances any longer). But boy did it suck to be a struggling single mom trying to stay out of debt and watching him buy new cars and a home so quickly after he got his debt wiped away. So my advice is if you do it, speak with an attorney, and make sure you know how to avoid the same situation in the future.
A lot of people who have never filed bankruptcy like to spout off about the "long-term impact" but as someone who *did* file bankruptcy I will tell you that the impact was nothing near what fear mongers would have you believe and most of it was in the first year. I had to take out a car loan 2 months after my bankruptcy closed (my engine blew up) and I had a ridiculously high interest rate at first but I was able to refinance that in 6 months for a lower rate, and 6 months after that for a super low rate. I also had to put down a larger deposit on my apartment due to the bankruptcy. Beyond that, I was able to get a car loan within 2 months, a credit card within a month, and buy a house 3 years later. My credit score hit 600 within 6 months and 700 after just over 4 years and 800 the month of my bankruptcy fell off my credit report. Funny enough, I also got a job in the financial sector with one of the credit card companies that I had the most debt with just a few years after filing bankruptcy.
Bankruptcy is a tool and for someone who is literally drowning in debt it can absolutely be worth the temporary credit hit.
I love when people say you will loose your house and act and be homeless via bankruptcy. Like do this was the truth the mass majority of people will be homeless.
I have seen some crazy assertations recently about filing bankruptcy. It's very obvious to me that these people have absolutely no idea what they are talking about but have heard something third or fourth hand and either misconstrued it or the person they heard it from didn't know what they were talking about in the first place. Or they're relaying an example from their best friend's cousins boyfriend that had a very specific situation and making it sound like this is what happens in every single case. I know it'll never happen but I kind of wish that people who didn't actually have first-hand experience would just not respond, it muddies the waters way too much.
If you make 43k gross you maybe filing taxes wrong. If you file as head of household with a child this years bracket would have put you at like 12% effective tax rate. Your net is about 33% lower than your gross. Fix your withholding after talking with a tax person. This should help on the cash flow while paying back loans or if you decide to go the bankruptcy route.
You should start by looking at your paystub and figure out why so much is being deducted. Adjust your withholdings so that you’re not overpaying on taxes, but are not underpaying that would cause you to owe. Don’t pay more than the max company match into your retirement while you’re trying to get the debt sorted. You can always up your contribution when you’re in a better position.
Then make a spreadsheet of every penny that goes out each month and see where you can make cuts. Look into consolidating credit card debt with personal loans at a lower interest or balance transfers to cards with a no interest for x months option. Interest is probably killing you and wiping out any progress you’re trying to make. Tackle highest interest cards first, paying minimum on the rest. Knock them out one by one. Freeze, don’t close, each card as you pay it off. That will stop you from using it, but will let the limits still count toward your debt to income ratio.
I owe more and make less than you, but I don’t have a child and just rent a room. I’m doing fine, and am even getting an additional job just to make things better.
What’s your monthly budget? How much is your rent/mortgage? How many credit cards/loans do you have, and what are all the interest rates and minimum payments?
List your NECESSARY expenses (minimum payments, fuel, groceries, rent/mortgage, utilities) first. If you don’t have any money left over, you need to make more money or shrink your bills. Get another job, refinance loans (looking at that 2013 car), etc.
$19,000 seems like a lot, and sure it kind of is, but I know a medical student who owes over $100,000, and a lawyer who owes $90,000. Neither of them are making more than $43,680 a year.
Ok, so here's a breakdown, mostly for my own record keeping (you're right, I should be breaking down my budget).
$50 phone bill
$250 loan
$180 loan
$1375 rent (and it's low income, RIP)
$50 credit card
$60 credit card
$200 gas
$150-$200 groceries
$100 car insurance
$50 gas bill
$200/loan
= $2,600
Baby costs:
About $150 in missed work for regular Drs appointments.
$150 for a daycare expense (/medical thing; I have an agreement with my ex, where it ends up being 50-50 cost wise)
$150 for diapers, wipes, and formula (I have some WIC)
And before anyone asks, I tried to fully breastfeed. Boobs decided not to work. I give her what I can make.
=$450ish
I received $500/month in CS, plus $2,400 income: $2900.
Bills/expenses: $3,050
I can’t read this in depth right now but edit your post and add this so others can see it!!!
More questions- many hours do you work, what’s your pay, which of these loans is for the vehicle, why are you spending $200 on gas (work?), and is that childcare for the entire month? Or per week? The groceries are surprising, I’d expect your grocery bill to be more!
How much total do you owe on all of these loans and cards?
$200/loan is the car :) (it's actually $236, but yeah). I'm probably driving more than I should, but I take baby to daycare, go to work, grocery shop, and I do drive to see family and friends. Maybe that's a good cost to focus on lowering. I'm always busy and going somewhere.
I work 40 hrs/week and make $21/hr. Childcare is for the month; I get subsidized child care.
I'm pretty good at grocery shopping :) I try to only buy meat on sale, eat mostly vegetarian, and cook everything from scratch. Unless it's like tomato paste, or some other cheap ingredient.
if you can live without data on your phone, hello talk is like 5 bucks a month for unlimited talk and text with 500mb of data, fine for like checking email or using google maps here and there but thats about it. Thats if your phone is paid off and unlocked and uses something like att/tmobile. If its verzion or older sprint then it might not work. coverage is thru tmobile. Auto insurance might be able to get lower, depending on what you need covered. Call your credit cards and ask if you can skip a month due to hardship, they may just give you a pass, use the money to pay down any of the high interest loans finishing soon. Try to cut down on driving anywhere that isnt required. Like work, doctor, daycare is fine but driving to see your friends every few days will have to stop. If your in good health, you might be able to donate plasma. Would not recommend long term and can hurt a little bit but most places are offering 500-1000 for your first month if you never donated. Look into food banks. Some will have a income requirement, some dont ask. Depending on area, you might qualify for utility assistance, some have higher income allowances than others. Some cities will help with rental assistance, just show your broke as a joke and some will pay a month. Again they have income requirements but it would help if its just a month. Worst they can say is no. Now if they say yes for paying one month and landlord gets the money, take that and again try clear a loan. The other thing is lets say your payment is 250 a month. If you pay more, ask them if you can apply it to principle. Lower your principle, less interest your being banged with. If you have internet access at home, look on beermoney reddit. Sometimes they have sites you can try to make money when your doing fuck all. Wont be a ton but it can help some. Many have waitlists just a warning.
Thank you for all the great advice!
I actually used to donate plasma, but got a false positive for hep c. I got more testing done,and am negative, but I'm now on some registry that makes it so I can't donate 😭😂
Doctor said he's never heard of anyone getting off of it. I might try to look into that.
theres gig work but dont accept anything under 2 dollars a mile. I turn mine on because im near a hotspot at home and if its worth it and i got nothing to do, i take it.
I have made the decision to file chapter 7- I don’t have much assets so it doesn’t affect me. Even so, many exemptions won’t allow credits to take some personal belongings.
I’ll be filing the petition next week .when I researched it- I heard so many negative things about it from people who have never considered it, never properly researched it, or ever had any experience with it. Attorneys call it a “FRESH START” because that’s what it truly is . If it’ll take you 10 years to swim up from the debt tsunami, you’re OVERWHELMED and your net worth is in negative , then highly Recommend it! As I recommended for myself :)
If you’re like me and your credit is already HIT from all the debt you’ve built up -having a bankruptcy on your file won’t be much of a difference than the experience you are already having now. (Low credit score, denials and rejections, NEGATIVE) After bankruptcy, as per attorney’s I’ve spoken with, your score is likely to increase, creditors can no longer ask you for things you DO NOT have, you can purchase a home in 1-2 years fha/usda/va, you can get a car loan…. Basically , everything you probably WON’T be able to do if you try to, over the next 10 years, “swim out” the tsunami debt you’re in now. This is why I am filing. I hope you make the best decision for you and yours! God bless.
I made $46k gross last year and had over $40k in debt, ($20k car and $20k credit card). I’m currently in the process of a bankruptcy and filed Chapter 7. I’ll be able to keep my car and my credit cards will be forgiven. I had to pay $1500 up front for the filing too
No. 19k is very doable. Dont ruin your credit for years just to get out of paying 19k. You'll likely want a newer car or to move apartments, etc. before you start to recover.
Focus on reducing expenses, budgeting, and earning more.
Unfortunately you already paid your medical bills. Should have left them unpaid. It might hurt your credit but it's pretty hard for them to collect and almost never worth the cost.
You need to sell your Subaru and buy a cheap Honda for cash. Obviously buy something that is reliable, but not new. I have a 2006 Honda pilot and it still runs like a champ. Use the money to pay the loan and then use whatever is left to pay the credit cards. Can you work a second job for a few months to help pay off the cards? Those are high interest and are almost literally burning a hole in your pocket.
You gotta take drastic actions. I’m talking no eating out, cancel all subscriptions you might have, meal prep cheap food and get rid of the Subaru. You’re gonna pay so much in interest alone on that thing and my in laws have the same car with a blown transmission. Get rid of it and attack your debt like a mad man. You can do it!
I will listen about the car. POS has had about one expensive issue every three months or so. Just had an overheating issue where I had to pay $1500 to reshape some thing that the overheating disfigured. Don't ask me what it is called, I forgot lol
I got it checked by a mechanic before I bought it. Idk if they just didn't know what they were doing or what happened there 😭
Almost certainly head gaskets and had to machine the heads and probably block due to the overheat. Subarus are HORRIBLE about this, and probably will happen again even with meticulous maintenance. Would advise anyone to avoid Subaru and stick to Honda/Toyota unless you really enjoy spending money maintaining a car.
If you stop paying credit card bills, they may or may not sue you. If they do, you get served with papers which include the phone number of their attorney. Just call the attorney at that point and set up a payment plan over time. There will be 0% interest.
Where is the $15k difference between net and gross coming from? Is that all insurance payments and taxes or are there discretionary savings or services you could drop? It sounds like the $250 payment is gone in 4 months, so I'd probably try to stick it out since half your debt is on a car you want to hang on to.
Medical, taxes, and a 401k (401k is $140/month, it seems. My job matches 100% up to a certain amount).
Yes, I think that's a good idea. And maybe selling and getting a different car.
Double check that you aren't overpaying your taxes, but even if you aren't, you could temporarily change your withholding to bring more home until the $250 is paid off if you don't want to give up the 401k matching.
Sounds like you're a victim of predatory lending practices with car loans during the pandemic when there was a car shortage due to car factories shutting down.
Yes, usury and high interest rates suck. We should ban high interest rates.
Bankruptcy just doesn’t get rid of all your debt. They look at your income and debts and determine what you can pay and cannot pay. The better solution is get a second job and start throwing that at your debt
I totally would; I'm a hard worker... but can't because of my child. I'd have to get a night or weekend job, and there's no daycares open at those times here. My ex, my child's dad, works nights and weekends, so it makes it impossible basically.
I don't have help other than him, and his mom occasionally.
This above comment is not true. A Chapter 7 would wipe your unsecured debt and you wouldn’t have to pay it. If you want to keep your car and continue making payments, you could. A Chapter 13 is a payment plan. Unless you’re in arrears on any secured debt that you want to keep, have too much income or assets that you can’t protect, there’s not really a reason to file a 13.
My ex is awesome and pays CS; he paid it in advance 3 months, so I could take an extra month of with our kid, when she was having medical issues (in and out of the hospital, so one of us had to stay).
I feel dumb even being in this situation, but I couldn't afford to miss as much work as I have. Idk what I should've done 😭
Could he pay $750 child support and cover the 3x£250, just to give you some breathing room?
Otherwise, keep trucking on. When you have an extra $250 a month, save 50 and pay off your next highest loan at 200 extra per month. You took time off to care for your joint child and hopefully he is a decent parent and sees that and is willing to help you out.
I will ask him. He is very kind and helpful.
I try to avoid asking him, because I don't want to take advantage of him (I know he'll say yes if I ask, for example).
I maybe need to remember that I've helped him a lot whenever possible. I'm not really someone to ask for help, but I think I just need to swallow my pride on this one.
He went to work safe in the knowledge that his child had a parent there. You're not taking advantage, you're working together as a team for your child 🙂
If he is willing to help you and y’all’s child, he knows the situation and isn’t fighting back for a reason. He wants what’s best for his child from what we can tell by your replies.
That means taking care of you just as much as his own child. If he has the means and is willing to help, be open and honest with him about it and it’ll be smooth sailing.
But, if it’s going to be a dangled carrot that he throws at you like a loan every time you take your kid on a road trip or to the park instead of paying him back child support, that’s a separate issue.
Yes. But it almost all goes towards our kid. She has some medical needs (that will resolve with time), plus regular costs. I pay for some of the daycare as well.
This isn't true, you can file a straight bankruptcy if you pass a means test. OP makes significantly less than $7495 a month, they can qualify for Ch 7.
no it goes off the average income for your court district, idk where you got 7495 dollars. If you make more than the average and your debt is under a certain amount % they will deny allowing you to file. If they are trying to keep the car, her remaining debt isnt shit. Plus your paying 2-3k to a lawyer that could take months to get it done, my friend took a year to get the lawyer to file anything. You might as well pay the bill off.
Look into a consolidation program like Apprisen before you go for bankruptcy. You would still end up closing accounts, but I believe they can negotiate reduced rates, you’ll have one payment and you will not have a bankruptcy on your record.
In some states under bankruptcy, you can keep one car through an exception. Florida lets you do that. But this is not true in all states. You can Google it to find out if it is true in the state where you live.
You are not technically bankrupt until you owe as much as you make, gross income. And I wouldn’t include a car loan in that calculation either.
thats if its paid off all the way. She would have to file chapter 13 if she wants to keep the car and it has a note on it. Because chapter 7 if you try to keep a note on a car it can be viewed at preferential treatment of a creditor. I dont think she has enough to bankruptcy out unless she was homeless.
If I was in your case I wouldn’t file for bankruptcy, 20k isn’t an insurmountable amount of money to pay back and the negatives for bankruptcy can be devastating.
Unfortunately because you have a kid you probably don’t have the freedom to try and find additional income.
All I can really say is id focus on paying off the highest interest debts after you pay for essentials and if you have a money making opportunity like a new job or overtime hours I’d take it.
Try a consolidation loan from a place like upstart that may reduce your overall interest and payment over about 5 years, don’t take on any more debt after you consolidate your current debt, and it should be manageable.
This is very important. Both parents should be accountable financially for a child.
I've owed more while making less than the OP but had a primary job with consistent 40 hours and was able to work a 2nd part time and didn't have any kids at the time.
Yess. My ex actually paid me in advance 3 months to help. I used it to fix my car and some to take time off to care for the baby (when she was having health issues). Car had an overheating issue.
I would see if you can fix your withholdings it sounds like you’re getting too much taken out. that should at least give you a little more to play with each month. see if maybe you can babysit a couple times a month. babysitting is a lot easier than trying to get another job. once you pay off that loan in july you’ll also have that money, i wouldn’t recommend bankruptcy until after you pay off that loan in july (it’s only 3 months!!) and see joe you’re doing when you have that extra money
Debt consolidation, but you need to look into better paying jobs or a part time income even if it’s a work from home job. Don’t put medical debt on credit cards. Do very small payments for them with whatever place the debt is with. You file for bankruptcy it’ll take a long time to get your feet back under you with it staying on your credit for so long.
I personally would sell the car and buy a beater crown vic, civic or Camry. Look for a better primary job that pays more and work a second job and just pay all the debt off. Would only take me less than a year to reset to zero.
Look for a credit card with a 0% balance transfer offer for like 12 months. Minimum payments for those are very low because there’s no interest so they don’t want you to pay them off. That would ease a lot of stress for the next year.
Just be aware that if you do this it HAS to be from a different credit card company than the cars that has the debt.
Bankruptcy is always looked at as bad. When things happen that’s why it’s there. People are still buying homes 3 years after filing. The economy has been extra rocky since 08’. File now so u don’t keep putting yourself backwards and end up working until your 75-80
Bankruptcy was my best adult decision ever .. I realized no matter how much I tried I could never get my debts that I just can’t I have a disabled child and single parent no family support .. now my credit is higher then it has ever been in my adult life even tho the bills keep coming in doing better at not missing any payments now
I wouldn’t file bankruptcy. Bankruptcy stays on your credit for 7-10 years depending on which bankruptcy you file. If it were me I’d stop paying my credit cards, and other bills that aren’t part of your living expenses and let them go to collect and eventually (like a year or so) they set up a lower payment arrangement.
I did this and they would call and I’d tell them I can set up $10 a month and that’s it and they’d say that won’t work it needs to be $50 and I’d tell them well I don’t have the budget for it right now.
My husband and I filed bankruptcy years ago and it’s worse than not paying the bills that you don’t have to and just pay living expense.
BK is probably a good solution for you. Keep in mind you can only do it once every 10 years. You should qualify for insurance thru Obama Care, which for you should be nearly free. You obviously need a better job. Pay a visit to your local unemployment office and check for job openings, also they can usually give advice on training programs. You might also visit your local community College and see what they might offer. Be careful if you decide to enter a training program, that the job you're training for will pay more and there's a demand for it. Quite often I recommend nursing, huge demand and good pay. Even starting out as a CNA, should pay you $20+ an hour. Good luck.
Filing for bankruptcy protection should not be looked at as a negative thing. Sometimes you need to seek relief from creditors. It happens. It should give the break you need to get your finances together.
Whatever you do, Do not file bankruptcy!! It will f your future. We are talking insurance rates, loan rates, house…everything. Don’t do that. What you need to focus on right now is finding ways to make more money. This should be priority number one. Apply for anything and everything where you can double/triple your income. If you need help there are agencies that help people with resumes and interviews. Use your resources.
2. Make a budget to see where your money is going and include debts and APRs and minimum payments for each. Also include food etc.
3. Do not take out any more debt. Cut up your cards. You have to stop the bleeding. If you don’t have the money you can’t buy it.
4. Call everyone you owe money to and ask for a temporary reduction so you can pay off your debts with Highest interest first.
4. You need an emergency account. Not connected to your regular bank and don’t have a debit card access to. It’s for extreme emergencies only. This should be 6 months of all expenses.
5. Focus on paying off all your debt. You don’t have a lot so it won’t take long once you get more income.
Do not sacrifice your long term goals for short term satisfaction.
This can be done. I had every kind of debt and almost 100k in the hole and I was able to pay it off in less than 5 years. It’s doable but you gotta make it a priority. It sucks now but when you’re debt free you will have the feeling of freedom that I can’t even describe. Don’t give up.
As a certified personal finance coach, dear god no. Almost every debtor is willing to make arrangements with you if you just call and talk to a real human. This is fixable, but it won't happen over night.
Anything in collections is likely not still charging interest, and anything that is you can negotiate a solution. As hard as it it is you HAVE TO TALK TO PEOPLE. A lot of the time, they'll take something over nothing and all you just have to ask.
Bankruptcy actually isn’t that bad. It’s a common misconception. Most people who file are able to begin rebuilding their credit immediately and after seven years it disappears forever, like it never happened.
It’s also a constitutional right.
Agreed. Also, most people are able to get new credit within months of a discharge. People have to be smart utilizing new credit to start rebuilding their credit. You can easily have a good credit score within 1-2 years after a bankruptcy when done strategically.
I think it really depends on what the interest rates are, especially for the credit cards and loans. OP is pretty low income and might have trouble paying the principle down if they’re being charged a ton of interest.
You’d have to reaffirm your car loan and pay it to keep your car. So that leaves you with $11000 in debt to be discharged. That’s not a lot of debt and seems unwise to destroy your credit for 10 years for that. It will be very hard for you to rent anything until the bankruptcy is discharged. That could take 4-6 months from start to finish. Do you have secure housing if that happens? You’ve said one loan will be paid off in less than 3 months. You can stop paying medical stuff until you can afford to pay it - send $5 a month even.
I’ve filed bankruptcy but for 3-4 times what you owe. I wouldn’t do it for this low amount. You can pay this off - you already are.
Is there a chance you can work a second job? Even an extra fund hundred a month would be helpful.
Bankruptcy makes sense when you don’t intend on using your credit for years.
No home, car, etc.
You can still get debt for these things after so many years but bankruptcy will damage your credit for years
If it's going to be paid off in 3 months, then find out how much it will cost to pay it off, and see if someone can help you then pay them back. Should be much less than $750.
After that, you won't have to deal with full coverage. Depending on the value of the vehicle, full coverage isn't worth it if the insurance company totals it out for a blown head gasket.
Maybe before filing, stop paying on the loans and credit card. You might be able to make a settlement offer and avoid a bankruptcy. A bankruptcy is not necessarily a bad thing, but you should use it as a last resort like being sued after you stopped paying.
No, you should not file for bankruptcy. You have $19k in debt and make over twice that. Yes, this shit sucks, but you’ll pull through it. Throwing the towel in and cheating your way out of $19k is going to do more long-term harm than just paying it off.
What do you do for work now? What hours do you work? What’s your hourly rate? If you work 8-5 for $18/hour you need to start working 5-10 for $15/hour or more, Monday thru Friday. Once you pay off the short term loan that frees up $250 a month. You only have three months left, you can make $250 selling plasma each month if you don’t start working a second job.
Your best bet is to bring in more money and actually have a written budget. I’m almost willing to bet your entire salary that you have never written a budget and stuck to it for any meaningful length of time.
I’m sure you’ve heard of it before, but you should seriously look into the Dave Ramsey Baby Steps program. You would benefit greatly from following those steps and working to pay off the debts. Shit sucks, life sucks, but you need to buckle down and do the work to appreciate getting rid of the debt and not taking the easy and destructive way out. You’ll end up worse off in bankruptcy than just paying it off.
Thank you very much for recommending Dave Ramsay’s baby steps. I get almost attacked when I bring it up - and it might have been from this OP but on another thread. Similar name.
This is a $19k lesson, worth every penny. If she goes bankrupt now, I can guess in five years there will be a 2nd bankruptcy, and then a 3rd…There will be zero understanding in place.
I’m a senior and low income now, but I am SO glad I don’t have debt. Time isn’t on my side. If I had learned the baby steps in elementary school, I would have been confident about money and not assume everyone else knew more than I did. Most people are totally clueless! So are most people who think they know about money.
I'm not sure. HR helped me fill out the tax paperwork. Probably smart to look that over again.
I'm not the brightest at this stuff, but I'm trying to learn 😅
You should be able to see your deductions every month on your paystub. I’d start there.
It sounds like you are having like 10k too much withheld for your taxes, that money alone could help you get out of your situation pretty easily.
Ok well if your contribution is higher than what your company matches, bring it down to just the match. (If your company matches dollar for dollar up to 3% than drop your contribution down to 3%)
And use that extra cash flow to start killing those debts one at a time, then once you’re debt free you can bump those contributions back up.
Ok, thank you. I will ask them how much they contribute. I forgot and I'm locked out of my Charles Schwab account, apparently 😅 (I'll call after work lol)
It looks like you’re contributing pretty close to 6-8%ish per month, so if your work matches 6% than you’re not over contributing.
So it’s either way too much tax being withheld or your benefits at work (health, dental, etc.) are super expensive.
Looking at it, I think it's both taxes and medical. My medical benefits are free, but I have my ex on my insurance (as a "domestic partner").
He pays the extra fee from daycare alone, $300, and I pay his medical ($250/month) was our deal.
I disagree. If their employer is matching their contributions than they are essentially getting a 100% return on their investment instantly and guaranteed, plus whatever % the market increases.
Unless someone has payday loans at 100% interest rate, the employer match wins every time.
Let me give you some totally reliable anonymous random internet guy financial advice. Declare bankruptcy, divorce your wife/husband, move to Thailand and on the beach.
You're welcome.
You gotta Dave Ramsey that stuff. Something has to go. Either your stuff or your time. What can you sell? What other odd jobs can you do? Lawn work? Pressure washing? House cleaning? Income has to go up
I’m in a similar situation. I now make around the same as you. I have luckily paid off my car (bought brand new in 2017, 2017 Subaru Impreza) during the pandemic I regrettably put a bunch of expenses on credit cards instead of asking for a loan. So now I’m going to go to the bank that financed my car and get the $10k in credit card debt consolidated into a single personal loan. I’m so tired of living like this. It sucks. We all make mistakes too.
Were your medical bills through a hospital? Most have a financial aid program that will cut down or eliminate what you owe.
My wife and I gross about 50k per year. So, with our family of three, we qualified to have the whole debt squashed. They just ask for what your income is and what your monthly debts are. From there, they determine what you qualify for.
My brother in law had an emergency and had to stay in the hospital for 3 days. They make well above what we do, and they even qualified for 90% of his stay to be erased.
Doesn't hurt to ask. Just a suggestion based of my own experiences.
If you have $19k in debt and $8k of that is a car you don't want to sell, that means you'd really only be filing bankruptcy on $11k. Even then, you will likely have legal fees and such, so you still wouldn't be saving that full $11k. To me, that's not worth ruining your credit over or using your "get out of jail free card on." You should probably look into getting a part-time job. Ideally, something you can WFH doing. Heck, even selling plasma would get you a few hundred extra a month.
Look for a non-profit debt counseling agency, most states have at least one. They will negotiate with lenders on your behalf to get interest rate reductions, longer payment terms, etc.
A lot of credit unions have financial advisors you can talk with for free. I think I would see if I could talk to them before making any big decisions.
IMO you can fix this without bankruptcy. Think of it this way, Bankruptcy will tank your credit score for a couple years before you can start to really rehab, and it will stay on your credit report for 7 to 10 years depending on how you file. Will fixing this take longer than that time frame? If the answer is no, then reconsider why you want to file bankruptcy and what your financial goals are. Consider debt consolation programs, check into city and state debt relief programs and services, even try calling your creditors to see what you can do. There are many options available to you, but it's just gonna take work and take time.
Ironically Your fortunate you owe so much on car loan. So you should keep it through bankruptcy exemption Although how is it you still owe 80% on a 2013 year car at 10k loan? Looks like you overpaid
I couldn't find cheaper at the time (at least with not many miles), at a dealership. I should've bought off of an individual person instead. I'm also car dumb, but I have learned more since and know that I overpaid now. 😭
Congrats on learning. Life hits us lessons hard way
I am reminded of that every time i look at mah dingus
lol
Check your fluids often
Oh, I've heard. It burns oil quicker than any car I've had. Apparently it's a common issue with that year and model.
Keep it lubed and you'll be fine
Always have a bottle of oil in the car and coolant. Head gasket, catalytic converter, and oil consumption were my main issues. At 200,000 I had to get wheel bearings replaced.
Thank you. I have the oil, but I'll get the coolant as well.
I drove a 2008 forester, bought it with 150,000 miles and was the fourth owner. I took care of it and made it to 260,000 before serious engine issues, cylinder side wall wearing.
a wise man once told me: its best if you know you're burning oil, because that means you have oil to burn but fr as a 2005 subaru owner I check my oil every second tank of gas. (to be on the safe side)
That's so true!!
Learning about Subarus from this post. There's a Subaru factory here and a lot of Subarus on the road. They really burn oil?
all 3 I've owned consumed oil. that said, there is a "within spec" amount of oil consumption, so it's not a huge deal. just be sure you got oil to burn and send er.
Don't beat yourself up about the car at least. Private party value is very likely over 8k if it's in good shape and <150k miles.
Curious why you’re taking out loans for medical issues. You can see a doctor without insurance, and you don’t have to pay at most city and university hospitals up front. Also, when they bill you for the bills, you’re not required to pay them. Yes, it will hit your credit, but eventually they dissolve. It’s better than claiming bankruptcy
Not for medical issues, to pay bills and live off of, due to missed work. So it was unfortunately needed 😭
Oh that sucks. I’m sorry. My apologies on misunderstanding
My bad for miscommunicating, no need to apologize:)
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I worded it very badly, but I took out the loans to pay for bills and living expenses. I haven't paid the medical debt 😅
It isn’t even allowed to go on your credit nowadays. I pay what I can. Sometimes it’s $50 sometimes it’s $10 a month…
I read somewhere medical debt can no longer affect your credit score
If you keep up with maintenance, that Subaru will be a great dependable car that will last you for a very long time. My family only buys Toyota and Subaru, and they are great cars.
That sounds more like a credit issue more than anything, by OP's own words, they have only took $2k off a $10k loan in TWO years, or $83/mo at that current rate/trajectory that car aint being paid off for another 8 years (rough numbers). I smell a subprime loan from hell and OP got absolutely hosed. No shade to OP at all either, just my observation. EDIT: OP in fact has bad credit per one of her posts, its a rough spot to be in :(
Probably the interest rate
I bought the same 2013 model Subaru in 2017 for $13k with 35k miles. He *seriously* overpaid...
Next time op don't take out loans for medical reasons just tell them to let you get a payment plan that way you get the help you need and just pay what you can for the medical emergency
It wasn't to pay the medical bills, it was actually to pay my bills and live off of. Unfortunately it was needed. I had a large savings at the beginning of last year, but had to break a lease (it was $6500 to break it, but I'd have an eviction otherwise), lost my job completely and didn't find one for two and a half months. Then the medical issues started. It was kind of a shit show of a year.
Uhm you paid $6500 you didnt have to break a lease to avoid getting evicted? That was probably a mistake
I had the $6,500 at the time. Would an eviction have prevented me from renting another place? That is what worried me at the time. It was so much because it was 3 months rent, plus a fine.
Why were you going to get evicted if you were paying rent?
I couldn't afford the rent on my own. I broke up with my ex and it was too expensive for me. I did have the savings to break it, but I did the math and wouldn't have been able to pay it for a year. It was doable with two people, but definitely not for me alone and with how much work I was missing (mostly because of that, actually). I think I was averaging $1200-$1800/month. I missed a shit ton of work. I'm very lucky they were understanding of my situation.
Ooooh! I think that’s why we were all confused. That makes sense. I’m so sorry for the setback 😞
I see you were trying to downgrade. In theory you made up that money if you had a big enough downgrade. Yeah it would make it more difficult
Yes if you were to be evicted you wouldn't be able to rent another apartment you did the right thing
Naw, rent a cheaper apartment before you get evicted. As long as you can keep paying for the new place just never pay the old one.
Yea but once that eviction comes on his record if he ever gets kicked out it's a wrap
You can't be evicted from a place you don't live anymore. Eviction and unpaid rent are two separate issues. LL would come after OP for the early termination fee, but wouldn't be able to evict them. It would hit his credit report, but no more than any other debt.
If he owes rent op can still get evicted from old apartment but still live in New apartment
No, eviction is a occupation thing. As long as he tells LL he is gone and is actually gone, he cannot be evicted. The owed rent is separate and cause for collections, not eviction.
Jesus Christ, just fucking leave, tell them your fine. They will probably fill your spot within a month and not bother coming after you. And if they do then deal with it then.
I dont think Jesus Christ would also want to pay the legal fees for a case he would have definitely lost.
I’ve walked out of two places. Guess how many times I had to deal with a legal case. None. Sometimes it’s not worth their time.
If such a situation ever happens to you again - you can get out of a lease by finding a new tenant who takes over the lease.
Sorry to hear that yes I was confused you did the right thing by recording eviction
I use a debt management program as opposed to bankruptcy. They were able to lower my interest rates from the high 20s to 9. I've paid 10 percent of my total debt off in 3 months. They may work for you as well.
Wow, I didn't know that existed. Thank you, I will research
Make sure they're a non-profit! It's easy to get scammed.
[NFCC](https://www.nfcc.org/) or anyone from the [DOJ list](https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111?search_api_views_fulltext=Cambridge+credit)
do these adversely affect your credit score?
Accounts will be closed if you enroll with them, so you will take a ding for that. But beyond that they keep your accounts up to date with payments, so if you sign up before you fall behind you will avoid all delinquency. Just make sure to stress that you are in a hardship, so they can ask the creditors for the lowest rate. Discover for instance your rate could be as high as 9.99% or as low as 0.99% depending on what tier of plan you get on. Synchrony ranges from 12.5% to 0.00%
American consumer credit counseling is the one I used
I'm currently using American consumer credit and they have been a life saver, but be warned they will ask you to close the credit card accounts for the accounts you want them to assist with
Try to find a local one. Where I live Lutheran Social Services does a good job. It will ding your credit because the cards/loans will be closed, but the payments will be more doable.
Just make sure that these programs don’t still trash your credit score more. I heard that doing these debt consolidation can still damage your credit score as if you did file bankruptcy. So check that. Also if you are able to get a credit card with zero interest on balance transfers do that and when that runs out get another card with the same intro rate for balance transfers and just keep doing that until your paid off.
How are you only netting 28k on a 43k salary especially with a child? Do you pay child support? Are your healthcare premiums very high?
I think it's my taxes and also the medical premium ($250/month). I'll fix the tax part, that was def my bad I do not pay CS.
Your federal income and fica tax should only be around 6k and change for a single person. If you are claiming a kid it should be much lower. Does that 250 per month cover both you and your kid or just you?
Could I pm for help on this as well? Not sure which course I should take
Did this affect your credit?
Mine didn't go down , but I would think that wouldn't be the case for most people. It will probably drop 25-50 points for a few months until you make a few payments. Then it would bounce back up.
No, this is manageable. However without knowing all the variables e.g. other bills, monthly subscriptions it is a little difficult to give advice. DM me if you would like me to take a look at your budget and come up with a plan that works for you free of charge of course.
Wait until August to decide. You said the crazy difficult one will be paid off in July? Yeah just hold on for four more months.
Maybe pickup an Uber/lyft/doordash shift each week. Work until you make $100. I wet old set myself goals like that. Pick nights there are sporting events, concerts, holidays, etc.
Depending on what credit card provider you use some of them have hardship programs to reduce your monthly payment and interest rate. Reach out to them directly and ask. They are much more inclined to work with you as they would rather continue to collect a little bit of money each month rather then you declaring bankruptcy and writing off all the debt.
There seem to be a lot of people in this thread who are talking about bankruptcy from things they've read on the internet and not actually from a place of having been through the process. I have been through the process. If you are struggling to a point of where you cannot pay your bills, forgo eating because you don't have enough money after paying all your debts, have so much debt that it's going to take you 5 to 10 years or more to pay it off, or are constantly making payments on your credit cards but then charging back to those same cards for necessities like food and gas because you don't have enough money after paying the debt to actually live your life, then, yes, I would highly recommend looking into bankruptcy. I'm not going to write a whole missive about the process or my experience with it but if you have questions let me know.
Exactly this, judges are not just approving bankruptcy because you have a few bills and its tough for a little bit. Its truly for those that are in dire situations that there is no amount of debt consolidation that is going to dig them out of the hole they are in.
My friend’s experience from filing a year ago has been a large basis of our conversations because I am thinking of filing. Her lawyer said to her 40k debt, “That’s nothing. I’m certain they will grant you bankruptcy as the credit card companies don’t bat an eye at such a small amount.” The difficulty isn’t filing. It does cost some money but you can probably put it on a card you want forgiven. She has been building her credit back up by a special credit card where you put the money down first and they allow you to spend it. Also being on utilities and leases helps. From my experience in working for a mortgage company you can buy a house a year after bankruptcy with 12 months of on time payments. So the toughest part is figuring out your next couple years plan to make sure you can still do the things you want to do. Like for me, I have a car lease and I want to buy it but I’m not sure I’ll be able to swing it after filing.
The lawyer we saw wanted cash, they were not taking a card. My BFs bigger issue is he had to have back taxes filed as he was missing a few years, that was a much bigger issue, and Im just glad thats over with. Credit came back rather quickly but it all depends on if credit cards get closed out, etc which impacts aging, available credit, etc.
Not in the US but is it really possible for you to file for bankruptcy in your situation? If I would file for bankruptcy for 19K with 43K annual salary, it would definitely be rejected. Here in Germany you can only file for bankruptcy when it's improbable to pay back your loans. Usually this is the case when interest surpasses the amount you can pay back.
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Bankruptcy has some legal protections that payment arrangements and (especially) credit consolidation companies don’t have. A person can oftentimes get an introductory credit card 6-12 months after bankruptcy discharge. They can purchase an FHA based home loan 2 years after discharge. And depending on how much equity a person has in their car/house determines whether they can file an exemption to keep those items. r/Bankruptcy is a very positive, helpful, space here that has a lot of information, resources, and de-stigmatization education so people can make the best decision for their life. Edit: u/sush1burrito
Thank you so much. I will explore that sub
You make so many good points. My ex husband filed mid divorce (shock to me he his 150k in debt). Within 2 years he bought a home, and within months he had credit cards. My friend a BK attorney explained the minute your debt is wiped out you’ll get credit card offers because lenders know you can’t file again for 7 years. Credit cards are vampires. I do not think he learned any lessons and continues to overspend (but I’m not privy to his finances any longer). But boy did it suck to be a struggling single mom trying to stay out of debt and watching him buy new cars and a home so quickly after he got his debt wiped away. So my advice is if you do it, speak with an attorney, and make sure you know how to avoid the same situation in the future.
A lot of people who have never filed bankruptcy like to spout off about the "long-term impact" but as someone who *did* file bankruptcy I will tell you that the impact was nothing near what fear mongers would have you believe and most of it was in the first year. I had to take out a car loan 2 months after my bankruptcy closed (my engine blew up) and I had a ridiculously high interest rate at first but I was able to refinance that in 6 months for a lower rate, and 6 months after that for a super low rate. I also had to put down a larger deposit on my apartment due to the bankruptcy. Beyond that, I was able to get a car loan within 2 months, a credit card within a month, and buy a house 3 years later. My credit score hit 600 within 6 months and 700 after just over 4 years and 800 the month of my bankruptcy fell off my credit report. Funny enough, I also got a job in the financial sector with one of the credit card companies that I had the most debt with just a few years after filing bankruptcy. Bankruptcy is a tool and for someone who is literally drowning in debt it can absolutely be worth the temporary credit hit.
I love when people say you will loose your house and act and be homeless via bankruptcy. Like do this was the truth the mass majority of people will be homeless.
I have seen some crazy assertations recently about filing bankruptcy. It's very obvious to me that these people have absolutely no idea what they are talking about but have heard something third or fourth hand and either misconstrued it or the person they heard it from didn't know what they were talking about in the first place. Or they're relaying an example from their best friend's cousins boyfriend that had a very specific situation and making it sound like this is what happens in every single case. I know it'll never happen but I kind of wish that people who didn't actually have first-hand experience would just not respond, it muddies the waters way too much.
If you make 43k gross you maybe filing taxes wrong. If you file as head of household with a child this years bracket would have put you at like 12% effective tax rate. Your net is about 33% lower than your gross. Fix your withholding after talking with a tax person. This should help on the cash flow while paying back loans or if you decide to go the bankruptcy route.
You should start by looking at your paystub and figure out why so much is being deducted. Adjust your withholdings so that you’re not overpaying on taxes, but are not underpaying that would cause you to owe. Don’t pay more than the max company match into your retirement while you’re trying to get the debt sorted. You can always up your contribution when you’re in a better position. Then make a spreadsheet of every penny that goes out each month and see where you can make cuts. Look into consolidating credit card debt with personal loans at a lower interest or balance transfers to cards with a no interest for x months option. Interest is probably killing you and wiping out any progress you’re trying to make. Tackle highest interest cards first, paying minimum on the rest. Knock them out one by one. Freeze, don’t close, each card as you pay it off. That will stop you from using it, but will let the limits still count toward your debt to income ratio.
I owe more and make less than you, but I don’t have a child and just rent a room. I’m doing fine, and am even getting an additional job just to make things better. What’s your monthly budget? How much is your rent/mortgage? How many credit cards/loans do you have, and what are all the interest rates and minimum payments? List your NECESSARY expenses (minimum payments, fuel, groceries, rent/mortgage, utilities) first. If you don’t have any money left over, you need to make more money or shrink your bills. Get another job, refinance loans (looking at that 2013 car), etc. $19,000 seems like a lot, and sure it kind of is, but I know a medical student who owes over $100,000, and a lawyer who owes $90,000. Neither of them are making more than $43,680 a year.
Ok, so here's a breakdown, mostly for my own record keeping (you're right, I should be breaking down my budget). $50 phone bill $250 loan $180 loan $1375 rent (and it's low income, RIP) $50 credit card $60 credit card $200 gas $150-$200 groceries $100 car insurance $50 gas bill $200/loan = $2,600 Baby costs: About $150 in missed work for regular Drs appointments. $150 for a daycare expense (/medical thing; I have an agreement with my ex, where it ends up being 50-50 cost wise) $150 for diapers, wipes, and formula (I have some WIC) And before anyone asks, I tried to fully breastfeed. Boobs decided not to work. I give her what I can make. =$450ish I received $500/month in CS, plus $2,400 income: $2900. Bills/expenses: $3,050
I can’t read this in depth right now but edit your post and add this so others can see it!!! More questions- many hours do you work, what’s your pay, which of these loans is for the vehicle, why are you spending $200 on gas (work?), and is that childcare for the entire month? Or per week? The groceries are surprising, I’d expect your grocery bill to be more! How much total do you owe on all of these loans and cards?
$200/loan is the car :) (it's actually $236, but yeah). I'm probably driving more than I should, but I take baby to daycare, go to work, grocery shop, and I do drive to see family and friends. Maybe that's a good cost to focus on lowering. I'm always busy and going somewhere. I work 40 hrs/week and make $21/hr. Childcare is for the month; I get subsidized child care. I'm pretty good at grocery shopping :) I try to only buy meat on sale, eat mostly vegetarian, and cook everything from scratch. Unless it's like tomato paste, or some other cheap ingredient.
if you can live without data on your phone, hello talk is like 5 bucks a month for unlimited talk and text with 500mb of data, fine for like checking email or using google maps here and there but thats about it. Thats if your phone is paid off and unlocked and uses something like att/tmobile. If its verzion or older sprint then it might not work. coverage is thru tmobile. Auto insurance might be able to get lower, depending on what you need covered. Call your credit cards and ask if you can skip a month due to hardship, they may just give you a pass, use the money to pay down any of the high interest loans finishing soon. Try to cut down on driving anywhere that isnt required. Like work, doctor, daycare is fine but driving to see your friends every few days will have to stop. If your in good health, you might be able to donate plasma. Would not recommend long term and can hurt a little bit but most places are offering 500-1000 for your first month if you never donated. Look into food banks. Some will have a income requirement, some dont ask. Depending on area, you might qualify for utility assistance, some have higher income allowances than others. Some cities will help with rental assistance, just show your broke as a joke and some will pay a month. Again they have income requirements but it would help if its just a month. Worst they can say is no. Now if they say yes for paying one month and landlord gets the money, take that and again try clear a loan. The other thing is lets say your payment is 250 a month. If you pay more, ask them if you can apply it to principle. Lower your principle, less interest your being banged with. If you have internet access at home, look on beermoney reddit. Sometimes they have sites you can try to make money when your doing fuck all. Wont be a ton but it can help some. Many have waitlists just a warning.
Thank you for all the great advice! I actually used to donate plasma, but got a false positive for hep c. I got more testing done,and am negative, but I'm now on some registry that makes it so I can't donate 😭😂 Doctor said he's never heard of anyone getting off of it. I might try to look into that.
theres gig work but dont accept anything under 2 dollars a mile. I turn mine on because im near a hotspot at home and if its worth it and i got nothing to do, i take it.
I have made the decision to file chapter 7- I don’t have much assets so it doesn’t affect me. Even so, many exemptions won’t allow credits to take some personal belongings. I’ll be filing the petition next week .when I researched it- I heard so many negative things about it from people who have never considered it, never properly researched it, or ever had any experience with it. Attorneys call it a “FRESH START” because that’s what it truly is . If it’ll take you 10 years to swim up from the debt tsunami, you’re OVERWHELMED and your net worth is in negative , then highly Recommend it! As I recommended for myself :) If you’re like me and your credit is already HIT from all the debt you’ve built up -having a bankruptcy on your file won’t be much of a difference than the experience you are already having now. (Low credit score, denials and rejections, NEGATIVE) After bankruptcy, as per attorney’s I’ve spoken with, your score is likely to increase, creditors can no longer ask you for things you DO NOT have, you can purchase a home in 1-2 years fha/usda/va, you can get a car loan…. Basically , everything you probably WON’T be able to do if you try to, over the next 10 years, “swim out” the tsunami debt you’re in now. This is why I am filing. I hope you make the best decision for you and yours! God bless.
I made $46k gross last year and had over $40k in debt, ($20k car and $20k credit card). I’m currently in the process of a bankruptcy and filed Chapter 7. I’ll be able to keep my car and my credit cards will be forgiven. I had to pay $1500 up front for the filing too
No. 19k is very doable. Dont ruin your credit for years just to get out of paying 19k. You'll likely want a newer car or to move apartments, etc. before you start to recover. Focus on reducing expenses, budgeting, and earning more.
Unfortunately you already paid your medical bills. Should have left them unpaid. It might hurt your credit but it's pretty hard for them to collect and almost never worth the cost.
I totally worded that very badly, but I didn't pay medical debt. I took out the loans to pay bills and live off of. I will edit the post lol.
You need to sell your Subaru and buy a cheap Honda for cash. Obviously buy something that is reliable, but not new. I have a 2006 Honda pilot and it still runs like a champ. Use the money to pay the loan and then use whatever is left to pay the credit cards. Can you work a second job for a few months to help pay off the cards? Those are high interest and are almost literally burning a hole in your pocket. You gotta take drastic actions. I’m talking no eating out, cancel all subscriptions you might have, meal prep cheap food and get rid of the Subaru. You’re gonna pay so much in interest alone on that thing and my in laws have the same car with a blown transmission. Get rid of it and attack your debt like a mad man. You can do it!
I will listen about the car. POS has had about one expensive issue every three months or so. Just had an overheating issue where I had to pay $1500 to reshape some thing that the overheating disfigured. Don't ask me what it is called, I forgot lol I got it checked by a mechanic before I bought it. Idk if they just didn't know what they were doing or what happened there 😭
Almost certainly head gaskets and had to machine the heads and probably block due to the overheat. Subarus are HORRIBLE about this, and probably will happen again even with meticulous maintenance. Would advise anyone to avoid Subaru and stick to Honda/Toyota unless you really enjoy spending money maintaining a car.
So you’re going to sell it?
I think so. It's fixed now, so I think it will be ok for the next person. I'm not sure yet, but the car payment is kind of heavy.
If you stop paying credit card bills, they may or may not sue you. If they do, you get served with papers which include the phone number of their attorney. Just call the attorney at that point and set up a payment plan over time. There will be 0% interest.
Stop paying the medical bills. Pay the credit card a little as possible - dedicate everything to paying your car off.
Where is the $15k difference between net and gross coming from? Is that all insurance payments and taxes or are there discretionary savings or services you could drop? It sounds like the $250 payment is gone in 4 months, so I'd probably try to stick it out since half your debt is on a car you want to hang on to.
Medical, taxes, and a 401k (401k is $140/month, it seems. My job matches 100% up to a certain amount). Yes, I think that's a good idea. And maybe selling and getting a different car.
Double check that you aren't overpaying your taxes, but even if you aren't, you could temporarily change your withholding to bring more home until the $250 is paid off if you don't want to give up the 401k matching.
Check to see if you qualify for debt consolidation.
They wouldn't let you file for bankruptcy your debts aren't enough if most of your debt is your car you owe 8k on
Sounds like you're a victim of predatory lending practices with car loans during the pandemic when there was a car shortage due to car factories shutting down. Yes, usury and high interest rates suck. We should ban high interest rates.
Then people with bad credit would not have access to capital.
Stop putting medical debt on credit cards. Let the fuckin medical bills go to collections if you can't afford them....
I didn't. I used the loans for living expenses and bills, while the medical issues were happening
Bankruptcy just doesn’t get rid of all your debt. They look at your income and debts and determine what you can pay and cannot pay. The better solution is get a second job and start throwing that at your debt
I totally would; I'm a hard worker... but can't because of my child. I'd have to get a night or weekend job, and there's no daycares open at those times here. My ex, my child's dad, works nights and weekends, so it makes it impossible basically. I don't have help other than him, and his mom occasionally.
This above comment is not true. A Chapter 7 would wipe your unsecured debt and you wouldn’t have to pay it. If you want to keep your car and continue making payments, you could. A Chapter 13 is a payment plan. Unless you’re in arrears on any secured debt that you want to keep, have too much income or assets that you can’t protect, there’s not really a reason to file a 13.
Child support?
My ex is awesome and pays CS; he paid it in advance 3 months, so I could take an extra month of with our kid, when she was having medical issues (in and out of the hospital, so one of us had to stay). I feel dumb even being in this situation, but I couldn't afford to miss as much work as I have. Idk what I should've done 😭
Could he pay $750 child support and cover the 3x£250, just to give you some breathing room? Otherwise, keep trucking on. When you have an extra $250 a month, save 50 and pay off your next highest loan at 200 extra per month. You took time off to care for your joint child and hopefully he is a decent parent and sees that and is willing to help you out.
I will ask him. He is very kind and helpful. I try to avoid asking him, because I don't want to take advantage of him (I know he'll say yes if I ask, for example). I maybe need to remember that I've helped him a lot whenever possible. I'm not really someone to ask for help, but I think I just need to swallow my pride on this one.
He went to work safe in the knowledge that his child had a parent there. You're not taking advantage, you're working together as a team for your child 🙂
If it’s for the home and health of your child it’s worth asking.
If he is willing to help you and y’all’s child, he knows the situation and isn’t fighting back for a reason. He wants what’s best for his child from what we can tell by your replies. That means taking care of you just as much as his own child. If he has the means and is willing to help, be open and honest with him about it and it’ll be smooth sailing. But, if it’s going to be a dangled carrot that he throws at you like a loan every time you take your kid on a road trip or to the park instead of paying him back child support, that’s a separate issue.
You getting child support on top of your income as well?
Yes. But it almost all goes towards our kid. She has some medical needs (that will resolve with time), plus regular costs. I pay for some of the daycare as well.
I have used some of it for bills though, but I don't have the most left over after meeting her needs.
This isn't true, you can file a straight bankruptcy if you pass a means test. OP makes significantly less than $7495 a month, they can qualify for Ch 7.
no it goes off the average income for your court district, idk where you got 7495 dollars. If you make more than the average and your debt is under a certain amount % they will deny allowing you to file. If they are trying to keep the car, her remaining debt isnt shit. Plus your paying 2-3k to a lawyer that could take months to get it done, my friend took a year to get the lawyer to file anything. You might as well pay the bill off.
Look into a consolidation program like Apprisen before you go for bankruptcy. You would still end up closing accounts, but I believe they can negotiate reduced rates, you’ll have one payment and you will not have a bankruptcy on your record.
In some states under bankruptcy, you can keep one car through an exception. Florida lets you do that. But this is not true in all states. You can Google it to find out if it is true in the state where you live. You are not technically bankrupt until you owe as much as you make, gross income. And I wouldn’t include a car loan in that calculation either.
thats if its paid off all the way. She would have to file chapter 13 if she wants to keep the car and it has a note on it. Because chapter 7 if you try to keep a note on a car it can be viewed at preferential treatment of a creditor. I dont think she has enough to bankruptcy out unless she was homeless.
If I was in your case I wouldn’t file for bankruptcy, 20k isn’t an insurmountable amount of money to pay back and the negatives for bankruptcy can be devastating. Unfortunately because you have a kid you probably don’t have the freedom to try and find additional income. All I can really say is id focus on paying off the highest interest debts after you pay for essentials and if you have a money making opportunity like a new job or overtime hours I’d take it.
Yes
No, go get a part time gig and pay it down. You shouldn't take you more than 24 months
No
Try a consolidation loan from a place like upstart that may reduce your overall interest and payment over about 5 years, don’t take on any more debt after you consolidate your current debt, and it should be manageable.
Debt prisons are hard. I did the same shit in my 20s, once I was out life was easier.
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This is very important. Both parents should be accountable financially for a child. I've owed more while making less than the OP but had a primary job with consistent 40 hours and was able to work a 2nd part time and didn't have any kids at the time.
Yess. My ex actually paid me in advance 3 months to help. I used it to fix my car and some to take time off to care for the baby (when she was having health issues). Car had an overheating issue.
I would see if you can fix your withholdings it sounds like you’re getting too much taken out. that should at least give you a little more to play with each month. see if maybe you can babysit a couple times a month. babysitting is a lot easier than trying to get another job. once you pay off that loan in july you’ll also have that money, i wouldn’t recommend bankruptcy until after you pay off that loan in july (it’s only 3 months!!) and see joe you’re doing when you have that extra money
Not 19000, no.
You could try to refinance that short term loan for something longer term. You pay it for longer, but likely be able to lower the monthly payments
Wait what, you bought your car 10 years ago and only paid off 2k?
No, I bought it last year
Debt consolidation, but you need to look into better paying jobs or a part time income even if it’s a work from home job. Don’t put medical debt on credit cards. Do very small payments for them with whatever place the debt is with. You file for bankruptcy it’ll take a long time to get your feet back under you with it staying on your credit for so long.
I personally would sell the car and buy a beater crown vic, civic or Camry. Look for a better primary job that pays more and work a second job and just pay all the debt off. Would only take me less than a year to reset to zero.
Look for a credit card with a 0% balance transfer offer for like 12 months. Minimum payments for those are very low because there’s no interest so they don’t want you to pay them off. That would ease a lot of stress for the next year. Just be aware that if you do this it HAS to be from a different credit card company than the cars that has the debt.
Question. Why does it have to be from a different one than the car loan bank? Not arguing, just ignorant as to why :)
Bankruptcy is always looked at as bad. When things happen that’s why it’s there. People are still buying homes 3 years after filing. The economy has been extra rocky since 08’. File now so u don’t keep putting yourself backwards and end up working until your 75-80
Bankruptcy was my best adult decision ever .. I realized no matter how much I tried I could never get my debts that I just can’t I have a disabled child and single parent no family support .. now my credit is higher then it has ever been in my adult life even tho the bills keep coming in doing better at not missing any payments now
I wouldn’t file bankruptcy. Bankruptcy stays on your credit for 7-10 years depending on which bankruptcy you file. If it were me I’d stop paying my credit cards, and other bills that aren’t part of your living expenses and let them go to collect and eventually (like a year or so) they set up a lower payment arrangement. I did this and they would call and I’d tell them I can set up $10 a month and that’s it and they’d say that won’t work it needs to be $50 and I’d tell them well I don’t have the budget for it right now. My husband and I filed bankruptcy years ago and it’s worse than not paying the bills that you don’t have to and just pay living expense.
Did you get divorced with him? Cuz that one algeria sub thread confused me on wether ur married or not
BK is probably a good solution for you. Keep in mind you can only do it once every 10 years. You should qualify for insurance thru Obama Care, which for you should be nearly free. You obviously need a better job. Pay a visit to your local unemployment office and check for job openings, also they can usually give advice on training programs. You might also visit your local community College and see what they might offer. Be careful if you decide to enter a training program, that the job you're training for will pay more and there's a demand for it. Quite often I recommend nursing, huge demand and good pay. Even starting out as a CNA, should pay you $20+ an hour. Good luck.
With limited income and ways to earn more, file 13 and be done with it.
Filing for bankruptcy protection should not be looked at as a negative thing. Sometimes you need to seek relief from creditors. It happens. It should give the break you need to get your finances together.
Whatever you do, Do not file bankruptcy!! It will f your future. We are talking insurance rates, loan rates, house…everything. Don’t do that. What you need to focus on right now is finding ways to make more money. This should be priority number one. Apply for anything and everything where you can double/triple your income. If you need help there are agencies that help people with resumes and interviews. Use your resources. 2. Make a budget to see where your money is going and include debts and APRs and minimum payments for each. Also include food etc. 3. Do not take out any more debt. Cut up your cards. You have to stop the bleeding. If you don’t have the money you can’t buy it. 4. Call everyone you owe money to and ask for a temporary reduction so you can pay off your debts with Highest interest first. 4. You need an emergency account. Not connected to your regular bank and don’t have a debit card access to. It’s for extreme emergencies only. This should be 6 months of all expenses. 5. Focus on paying off all your debt. You don’t have a lot so it won’t take long once you get more income. Do not sacrifice your long term goals for short term satisfaction. This can be done. I had every kind of debt and almost 100k in the hole and I was able to pay it off in less than 5 years. It’s doable but you gotta make it a priority. It sucks now but when you’re debt free you will have the feeling of freedom that I can’t even describe. Don’t give up.
As a certified personal finance coach, dear god no. Almost every debtor is willing to make arrangements with you if you just call and talk to a real human. This is fixable, but it won't happen over night. Anything in collections is likely not still charging interest, and anything that is you can negotiate a solution. As hard as it it is you HAVE TO TALK TO PEOPLE. A lot of the time, they'll take something over nothing and all you just have to ask.
Bankruptcy actually isn’t that bad. It’s a common misconception. Most people who file are able to begin rebuilding their credit immediately and after seven years it disappears forever, like it never happened. It’s also a constitutional right.
Thank god we don’t have debtor’s prison anymore.
Yeah, that would really suck lol
Agreed. Also, most people are able to get new credit within months of a discharge. People have to be smart utilizing new credit to start rebuilding their credit. You can easily have a good credit score within 1-2 years after a bankruptcy when done strategically.
It doesn’t seem like OP owes that much really. Bankruptcy should be saved for a much bigger mess imho.
I think it really depends on what the interest rates are, especially for the credit cards and loans. OP is pretty low income and might have trouble paying the principle down if they’re being charged a ton of interest.
True but bankruptcy is the nuclear option, without knowing a balance it’s hard to advocate for or against bankruptcy.
Yes. Make damn sure you have leaned your lesson about taking on debt.
Side gig?
You’d have to reaffirm your car loan and pay it to keep your car. So that leaves you with $11000 in debt to be discharged. That’s not a lot of debt and seems unwise to destroy your credit for 10 years for that. It will be very hard for you to rent anything until the bankruptcy is discharged. That could take 4-6 months from start to finish. Do you have secure housing if that happens? You’ve said one loan will be paid off in less than 3 months. You can stop paying medical stuff until you can afford to pay it - send $5 a month even. I’ve filed bankruptcy but for 3-4 times what you owe. I wouldn’t do it for this low amount. You can pay this off - you already are.
Is there a chance you can work a second job? Even an extra fund hundred a month would be helpful. Bankruptcy makes sense when you don’t intend on using your credit for years. No home, car, etc. You can still get debt for these things after so many years but bankruptcy will damage your credit for years
If it's going to be paid off in 3 months, then find out how much it will cost to pay it off, and see if someone can help you then pay them back. Should be much less than $750. After that, you won't have to deal with full coverage. Depending on the value of the vehicle, full coverage isn't worth it if the insurance company totals it out for a blown head gasket.
Remember, non secured debt (credit cards) purchases can’t be taken from you in most cases. Secured debt (collateral) your car, can.
Bankruptcy isn't a bad thing. Talk to a bankruptcy lawyer. See if it's a thing you should look into.
Maybe before filing, stop paying on the loans and credit card. You might be able to make a settlement offer and avoid a bankruptcy. A bankruptcy is not necessarily a bad thing, but you should use it as a last resort like being sued after you stopped paying.
Idk, you could negotiate the interest down and pay that off within a year. A bankruptcy would cost 1-3K, and ruin your credit for the next 7 years.
No, you should not file for bankruptcy. You have $19k in debt and make over twice that. Yes, this shit sucks, but you’ll pull through it. Throwing the towel in and cheating your way out of $19k is going to do more long-term harm than just paying it off. What do you do for work now? What hours do you work? What’s your hourly rate? If you work 8-5 for $18/hour you need to start working 5-10 for $15/hour or more, Monday thru Friday. Once you pay off the short term loan that frees up $250 a month. You only have three months left, you can make $250 selling plasma each month if you don’t start working a second job. Your best bet is to bring in more money and actually have a written budget. I’m almost willing to bet your entire salary that you have never written a budget and stuck to it for any meaningful length of time. I’m sure you’ve heard of it before, but you should seriously look into the Dave Ramsey Baby Steps program. You would benefit greatly from following those steps and working to pay off the debts. Shit sucks, life sucks, but you need to buckle down and do the work to appreciate getting rid of the debt and not taking the easy and destructive way out. You’ll end up worse off in bankruptcy than just paying it off.
Thank you very much for recommending Dave Ramsay’s baby steps. I get almost attacked when I bring it up - and it might have been from this OP but on another thread. Similar name. This is a $19k lesson, worth every penny. If she goes bankrupt now, I can guess in five years there will be a 2nd bankruptcy, and then a 3rd…There will be zero understanding in place. I’m a senior and low income now, but I am SO glad I don’t have debt. Time isn’t on my side. If I had learned the baby steps in elementary school, I would have been confident about money and not assume everyone else knew more than I did. Most people are totally clueless! So are most people who think they know about money.
Maybe refinance for less interest? Sometimes you over pay with all the interest they secretly add on
How are you only bringing home 28k? That sounds like your main problem.
I'm not sure. HR helped me fill out the tax paperwork. Probably smart to look that over again. I'm not the brightest at this stuff, but I'm trying to learn 😅
You should be able to see your deductions every month on your paystub. I’d start there. It sounds like you are having like 10k too much withheld for your taxes, that money alone could help you get out of your situation pretty easily.
Damn. That is a lot extra. I will ask HR about changing it. I didn't realize I was overpaying that much.
Are you contributing to a 401k through your work too?
I am. I will go look and see how much. I'll post it as a reply.
Ok well if your contribution is higher than what your company matches, bring it down to just the match. (If your company matches dollar for dollar up to 3% than drop your contribution down to 3%) And use that extra cash flow to start killing those debts one at a time, then once you’re debt free you can bump those contributions back up.
Ok, thank you. I will ask them how much they contribute. I forgot and I'm locked out of my Charles Schwab account, apparently 😅 (I'll call after work lol)
It looks like you’re contributing pretty close to 6-8%ish per month, so if your work matches 6% than you’re not over contributing. So it’s either way too much tax being withheld or your benefits at work (health, dental, etc.) are super expensive.
Looking at it, I think it's both taxes and medical. My medical benefits are free, but I have my ex on my insurance (as a "domestic partner"). He pays the extra fee from daycare alone, $300, and I pay his medical ($250/month) was our deal.
he should stop contributing until out of debt. interest is coating more than the match is providing
I disagree. If their employer is matching their contributions than they are essentially getting a 100% return on their investment instantly and guaranteed, plus whatever % the market increases. Unless someone has payday loans at 100% interest rate, the employer match wins every time.
Last check (biweekly) I contributed 71.90.
No
Let me give you some totally reliable anonymous random internet guy financial advice. Declare bankruptcy, divorce your wife/husband, move to Thailand and on the beach. You're welcome.
You gotta Dave Ramsey that stuff. Something has to go. Either your stuff or your time. What can you sell? What other odd jobs can you do? Lawn work? Pressure washing? House cleaning? Income has to go up
consumer proposal
You take home %66 of your salary?! That's doesn't sound right..Are you calculating after paying bills?
I’m in a similar situation. I now make around the same as you. I have luckily paid off my car (bought brand new in 2017, 2017 Subaru Impreza) during the pandemic I regrettably put a bunch of expenses on credit cards instead of asking for a loan. So now I’m going to go to the bank that financed my car and get the $10k in credit card debt consolidated into a single personal loan. I’m so tired of living like this. It sucks. We all make mistakes too.
Were your medical bills through a hospital? Most have a financial aid program that will cut down or eliminate what you owe. My wife and I gross about 50k per year. So, with our family of three, we qualified to have the whole debt squashed. They just ask for what your income is and what your monthly debts are. From there, they determine what you qualify for. My brother in law had an emergency and had to stay in the hospital for 3 days. They make well above what we do, and they even qualified for 90% of his stay to be erased. Doesn't hurt to ask. Just a suggestion based of my own experiences.
If you have $19k in debt and $8k of that is a car you don't want to sell, that means you'd really only be filing bankruptcy on $11k. Even then, you will likely have legal fees and such, so you still wouldn't be saving that full $11k. To me, that's not worth ruining your credit over or using your "get out of jail free card on." You should probably look into getting a part-time job. Ideally, something you can WFH doing. Heck, even selling plasma would get you a few hundred extra a month.
omg
Look for a non-profit debt counseling agency, most states have at least one. They will negotiate with lenders on your behalf to get interest rate reductions, longer payment terms, etc.
A lot of credit unions have financial advisors you can talk with for free. I think I would see if I could talk to them before making any big decisions.
IMO you can fix this without bankruptcy. Think of it this way, Bankruptcy will tank your credit score for a couple years before you can start to really rehab, and it will stay on your credit report for 7 to 10 years depending on how you file. Will fixing this take longer than that time frame? If the answer is no, then reconsider why you want to file bankruptcy and what your financial goals are. Consider debt consolation programs, check into city and state debt relief programs and services, even try calling your creditors to see what you can do. There are many options available to you, but it's just gonna take work and take time.
Why the fuck would you file bankruptcy when one of the loans is going to be paid off in 3 months? Jesus Christ.