Question Should I consider filing?

[franks112233]

So the only living family for advice I have is my father, and he is very against me filing for bankruptcy. He feels I should just try and work my way out of it. In his defense, I can see it would be possible but I would like some others input.

I'm about to be 27, living at home as my expenses are just too large to afford my own place.
I currently have about 18,000 in CC debt. I pay about 540 a month in minimum payments.
I have a steady job at about 1000 take home a month, but with my other bills (car, insurance, cell phone, food, etc) I'm basically going minus 50-100 dollars a month.
I recently started my own small business and over the next few months I'll have an extra 4-5 thousand dollars from it. I do video work. Think Weddings, etc.

So, do I try and do nothing but work nonstop for the next two years and pay my way out of the debt, or do I consider filing? I think my father might be willing to help me out with 3-4 thousand dollars I could borrow from him and pay back with little to no interest rate.
I would eventually like to be able to get a place so I can propose to my girlfriend at some point!
I'm also considering going back to get a masters degree in the fall, if its nice and cheap. Will bankruptcy cause me to get less financial aid and loans through the government and fafsa?

Ugh! I need advice. I'm willing to make the changes to live more within my means, and I could do so easily if not for that 500-600 a month I have to toss at the credit cards!

[LadyInTheRed]

So, do I try and do nothing but work nonstop for the next two years and pay my way out of the debt, or do I consider filing? I think my father might be willing to help me out with 3-4 thousand dollars I could borrow from him and pay back with little to no interest rate.

Could you realistically pay off your debt in two years? Try this calculator to figure that out: http://www.bankrate.com/calculators/...alculator.aspx. You'll need to find out exactly how much your father is willing to help to determine the best path. Is going into debt to him a good idea?

It's good to avoid BK if you can. It should be your last resort, especially when you are starting a new business. If things don't go well with your business and you have already filed BK, you won't have it as an option for a few years. But, you have to balance that with the need to be self-sufficient.

A good rule of thumb is that if you can't realistically pay down your debt within 5 years, you should consider BK.

[franks112233]

Could you realistically pay off your debt in two years? Try this calculator to figure that out: You'll need to find out exactly how much your father is willing to help to determine the best path. Is going into debt to him a good idea?

It's good to avoid BK if you can. It should be your last resort, especially when you are starting a new business. If things don't go well with your business and you have already filed BK, you won't have it as an option for a few years. But, you have to balance that with the need to be self-sufficient.

A good rule of thumb is that if you can't realistically pay down your debt within 5 years, you should consider BK.

Thats a good question. Well using that calculator, paying my minimum payments it would take 4.75 years to get everything paid off. That's a long time to spend barely making ends meat, unable to save any money. So thats pretty unrealistic. Thats my problem, I'm just barely able to make the minimum payment. That leaves me no money to save, so when something comes up, lets say I need new car tires, or new brakes, or I have to go to the doctor, or my girlfriends birthday, etc - it all ends up going on the credit cards that are getting paid off in the first place. Jesus what a cycle.

[keepmine]

Your big problem is income and not debt.
Say you file bk. Yu still only make a $1K/month and still will have car, cell, and whatever other expenses you have. You still won't be able to affors an apt without a roommate. And, you're thinking of going back to school and incur more debt??

Were I you, I'd redouble my efforts to find a fulltime job and, until then pick up a 2nd pt job.
Do you have health insurance? You don't want to file and then 6 months later get sick or have an accident and have large medical debt you can't pay and you already played the bk card.

What you really need is just a basic safety net under and more income. Once you have that in place, reevaluate your situation.

[LadyInTheRed]

keepmine makes an excellent point.

[franks112233]

Well let me be more specific. My take home is 1000 at the moment and that's with our hours being reduced at the moment. I make 12 an hour, with my video jobs on the side I pick up another 6k a year or so. I'd be able to save 450 a month really easily if I was not dumping it into the cards essentially getting no where. I do have health insurance.

[keepmine]

So, your takehome is about $1300/month with the video job. And, likely not that much because I'm assuming you'll report the income on your taxes.
Just a reality check-you can't support yourself on $1300/month.
Agagin, get yourself in a position where you can support yourself then, take another look at the situation.

[franks112233]

So, your takehome is about $1300/month with the video job. And, likely not that much because I'm assuming you'll report the income on your taxes.
Just a reality check-you can't support yourself on $1300/month.
Agagin, get yourself in a position where you can support yourself then, take another look at the situation.

Well thats great advice about me moving out, thank you for addressing it.

So you feel then bankruptcy is a poor choice? What do I do about the 18,000 at 20% a month. Again, every cent I'm making is going to just making the minimum. To pay it off in two years I would need to nearly double the minimum payment which isn't possible at the moment. What exactly is everyone's advice about the issue of bankruptcy here? I assure you that while I'm going to continue looking for better jobs, the 18k is still there and growing.

[keepmine]

Well, you gotta stop using those cards to begin with.
And, get a realistic grip on your situation. You're all over the place with your posting. At first, you make a $1K/month and were starting a business. Later, the business is established and bringing in $6K/year.
Now, you say every cent you make goes to minimums but in an earlier post you say the minimums are $540/month.

You might want to contact the cc companies and ask about hardship plans they have that may lower interest rates some.

[Drazil65]

First and priority, stop using the credit cards, that is your biggest lifestyle change at this point. You mentioned you should be able to make a few extra thousand in the next few months? Then pay the cards down with that money so the amount is reduced then you may have to get that 2nd job to payoff the debt quicker. I would think twice about assuming more debt to go back to school, if you have a degree now and are only making $12.00 you may need to go to a recruiter to get a better paying job in whatever it is you do. A new job with a company that will perhaps pay for your graduate degree or at least help in some way with the tuition costs.

Truthfully whether you file bankruptcy or not you will still be in no position to go back to school and assume more debt or even think about getting an apartment (without room mate as someone else mentioned) or get married. Get your financial life straight before you get married and get rid of the credit cards that will be about all you can handle right now, that is a big lifestyle change.

[bluediamond2077]

I was taking home $1300 a month working full time. After I lost my job I went back to college and will have $50,000 in student loan debt. Hope my degree earns me a better job when I go back to work.

Good thing is even though i'll have $50,000 in student loan debt i'll discharge about $36.000 in credit card debt.

Some times it just isn't worth trying to pay them back if your income is to low. Let them find another slave who will work 2 jobs to make the payments.

[Drazil65]

Maybe that is something you need to re-evaluate? There are many of us "slaves" who have worked 2 jobs or sometimes 4 between the 2 of us to make ends meet, we used the credit cards and it was our problem, you do what you need to do and you take 100% responsibility for it. Don't put all your eggs in the "I have a degree" basket, anyone can get a degree and there are thousands out there with one or two or three degrees, so before you pile on more student loan debt only to complain much later down the road that you are not making enough to pay the debt (so many out there employers do not need to pay a lot of money when someone else with a degree or two will do it for cheaper), think real long and hard. You need more income right now and even after you file if you want to live on your own, it happens.

[bluediamond2077]

Maybe that is something you need to re-evaluate? There are many of us "slaves" who have worked 2 jobs or sometimes 4 between the 2 of us to make ends meet, we used the credit cards and it was our problem, you do what you need to do and you take 100% responsibility for it. Don't put all your eggs in the "I have a degree" basket, anyone can get a degree and there are thousands out there with one or two or three degrees, so before you pile on more student loan debt only to complain much later down the road that you are not making enough to pay the debt (so many out there employers do not need to pay a lot of money when someone else with a degree or two will do it for cheaper), think real long and hard. You need more income right now and even after you file if you want to live on your own, it happens.

The "I have a degree" is the only basket I’ve had after losing my job in 2010 due to Degenerative disk disease and not being able to stand more than an hour. Life is too short to work 2 or three jobs. I could never do that and never see my children grow up just to pay some credit cards that I have all ready been paying for 10 years. Credit cards that added up and went out of control for emergencies beyond my control.

Income based repayment will make sure the student loan payment doesn't go above 15% of our discernable income.

You make some good points and it is true they try to find people to do the work cheaper. I've learned in the last 4 years to live on almost nothing, No cell phone, no cable, one $2445 car and only car insurance to cover the other guy. All our bills add up to $1398 for a family of four. Living this way should help once college is finished.

Getting an income right now is not going to happen. Takes 60 hours a week for school now that I am in the last year. Then with the kids.

[bcohen]

My advice is to quit paying the credit cards "cold turkey" and let them charge off. But don't file for bankruptcy at this time, because you could have a medical emergency, or otherwise incur more debt which you would need to eliminate when you ultimately do file. You are poor enough that a creditor could not garnish your wages even if they were to sue and obtain a judgment--which is very unlikely since you own nothing. To put your debt into perspective, if you were to continue paying the minimum payment, with a typical interest rate of 21%, it would take over 4 years to pay off the debt. Even assuming you could somehow convince the creditors to cease charging interest, a monthly payment of $540 on a debt of $18000 would take 34 months to pay off. That's almost 3 years of busting your butt, working two jobs just to pay towards debt, when you desperately need every penny you can get to pay for living expenses going forward!

One other thing you should be aware of is that a college degree is not a panacea. While people who graduate with a high GPA in certain fields of study do find good paying jobs quickly, people who study less desirable majors and/or earn a GPA of less than 3.0 generally find themselves searching for work for a long time. I am speaking from personal experience in this matter--I just graduated from a state university with a B.S. in Computer Science, however since I only attained a 2.61 GPA, I am having difficulty finding work in my field. Many companies simply won't accept applicants with less than a 3.0 GPA, and state this very bluntly on their recruitment literature and/or website. Even companies which do not openly state this as a requirement have not given me the time of day.

I have decided to accept a position in an unrelated industry, which will pay about $45k per year, however I do not have student loans to worry about repaying. Since you are planning to take on non-dischargeable student loan debt in order to pay for your education, you need to take a long and hard look at what kinds of jobs you hope to obtain after graduation, and the requirements set forth by companies for those positions. If you see, for example, that most employers in your field will require much higher grades than you can realistically obtain, or that there are very few available positions, then you really should think twice about going through with it.

[bluediamond2077]

My advice is to quit paying the credit cards "cold turkey" and let them charge off. But don't file for bankruptcy at this time, because you could have a medical emergency, or otherwise incur more debt which you would need to eliminate when you ultimately do file. You are poor enough that a creditor could not garnish your wages even if they were to sue and obtain a judgment--which is very unlikely since you own nothing. To put your debt into perspective, if you were to continue paying the minimum payment, with a typical interest rate of 21%, it would take over 4 years to pay off the debt. Even assuming you could somehow convince the creditors to cease charging interest, a monthly payment of $540 on a debt of $18000 would take 34 months to pay off. That's almost 3 years of busting your butt, working two jobs just to pay towards debt, when you desperately need every penny you can get to pay for living expenses going forward!

One other thing you should be aware of is that a college degree is not a panacea. While people who graduate with a high GPA in certain fields of study do find good paying jobs quickly, people who study less desirable majors and/or earn a GPA of less than 3.0 generally find themselves searching for work for a long time. I am speaking from personal experience in this matter--I just graduated from a state university with a B.S. in Computer Science, however since I only attained a 2.61 GPA, I am having difficulty finding work in my field. Many companies simply won't accept applicants with less than a 3.0 GPA, and state this very bluntly on their recruitment literature and/or website. Even companies which do not openly state this as a requirement have not given me the time of day.

I have decided to accept a position in an unrelated industry, which will pay about $45k per year, however I do not have student loans to worry about repaying. Since you are planning to take on non-dischargeable student loan debt in order to pay for your education, you need to take a long and hard look at what kinds of jobs you hope to obtain after graduation, and the requirements set forth by companies for those positions. If you see, for example, that most employers in your field will require much higher grades than you can realistically obtain, or that there are very few available positions, then you really should think twice about going through with it.

Good information bcohen

I left MCC with a 3.6 GPA and then took some really hard classes at pima and seen my GPA fall to 2.4 but was able to get it back to 3.0 the last year at pima community before I earned my associates degree. So far I have $34,000 in student loans and my wife also has about that much debt. We have one year left at NAU and estimate we will both have a little over $50,000 in student loan debt. So far wife and I both have a 4.0 GPA and I think a large part is due to us studying together all the time. I don’t see my GPA falling far in the fall and spring semester. We only have a year left. Your program was probably much harder.

All of my credit card debt is from 4 years ago and I stopped paying in 2010. I now have two judgments after me and they seem as if they wont go away. They are constantly coming to my home and my families home looking for me. I filed because if I don’t work things out soon I’ll never have the credit to move to a city that has jobs in my field. We are eyeing salt lake with the unemployment at 3.9% and a lot of jobs in our degree field.

If we stopped now with about $68,000 in student loan debt we would surly sink.

We are both going for a bachelor in science in public administration degree. I have no idea how it will work out just that in salt lake there are many job openings for people with a bachelor’s degree. I thought about the medical bills but we are on Arizonas free healthcare due to our no income and living on student loans and that covers every thing 100%.