Should I or shouldn't I?

[Ndebted]

Hi!
I just found this forum and signed up. I have been stressed out for days trying to decide if bankruptcy is my best option or not. I cannot afford an attorney so would file the papers myself if I went that route. Most of my debt-almost $70,000- is in students loans which I know can't be dismissed anyway. The rest, about $6,000 is credit card debt. I have a judgment against me and it's only a matter of time before they start garnishment.

[spidge]

So would you be filing to settle $6K or is there more with the judgement? I believe the most that can be taken from your paycheck is 25%, but its been a while since I have looked at those rules.
How much better off will you be if you filed?
Can you do more to settle like a second job or negotiate a settlement? A second job is temporary where BK would be with you for some time.
Can you adjust your living or transportation situation for a few years to dedicate more toward the small debt? I struggled with this one and still wonder if I made the best decision.

[bcohen]

There is not enough information in the OP to really offer any meaningful advice. For example, are you employed, and is the job stable? Approximately how much do you make, and how much are your necessary living expenses, such as rent, utilities, car payment, insurance, healthcare, food, etc? Can you currently afford your student loan payments, or are they in default, or deferral/forbearance? Are the student loans private or federal? Are you contemplating Chapter 7 or Chapter 13 bankruptcy?

[Ndebted]

I am now employed. I lost my job in 2010, and found only part-time work for a couple of years, during which I lost my house, spent my retirement and accumulated the credit card debt. In 2013, I finally found a full-time job but the pay was very low. My yearly income for the past three years has been about $20,000. So, I am making minimum student loan payments and everything I make goes to living expenses. I realize $6,000 is kind of crazy to go bankrupt over, but if my wages are garnished, losing 25% of my income would put me out in the street.

[leonel9]

Seems like a consultation with an attorney may be warranted here. You are likely eligible for Chapter 7 based on your income. Although student loans aren't typically discharged, there may be an argument that $70k will never get repaid and trying to pursue that while making $20k is itself a hardship, if it is reasonable that your income will not increase significantly (this is an assumption on my part).

We still don't have enough to provide a real clear direction one way or the other. However, if I were you I'd gather the numbers (starting with the items bcohen referenced), statements and collection letters and talk to a few attorneys. Specifically address the question on whether or not you would qualify to have your student loans discharged.

As far as affording an attorney goes: Your first step should be to come up with a good action plan. Free consultations can help with that. Your local Legal Aid group may offer a bankruptcy clinic.If you file a Chapter 13 bankruptcy, your attorney's fees may be paid via monthly payments.

[JDAVIS79]

Have you tried to see if you could negotiate a payment plan over the 6k? Maybe they would be willing to work with you on that.....If that's the only negative debt you have and are current and can stay current on the others.

[bcohen]

As leonel9 said, if you have been working for 3 years at the same rate of pay, and have been unable to find a higher-paying job anywhere else despite ongoing efforts to find one, then it may be possible to make the argument that you have maximized your earning potential. If that argument can be made, then it should not be too hard to show that paying off $70k of student loans--together with rent and other bills--on $20k of income poses an undue hardship. A good attorney may be able to assist with this.