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Considering Bankruptcy....need some financial advice!

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    Considering Bankruptcy....need some financial advice!

    So I will get directly to the point.. I have quite a bit in debt and I do need to either do one of two things. Either I need to pay it out, which will take a while or even consider bankruptcy. I am a young man, and without my student loans I have about $3,500 racked up in debt. My student loans are about down to $28,000 at this point. Unfortunately I had some medical issues and didn't have insurance so I am paying out of pocket for it. I do know that banko can affect your credit, and so many of the jobs these days will even check your credit. I want to look into getting a house someday, and with all this debt makes it difficult trying to get my own place because then I have to pay more because of it.. I know that after banko you can work on building your credit, but it still shows on your credit for 7-10 years. Any advice would be appreciated!

    #2
    The 2005 bankruptcy reform law basically made it all but impossible to discharge student debt with a bankruptcy. Unless you can prove that you're destitute and likely to stay that way, you're probably out of luck.

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      #3
      As pointed out, Student Loans aren't forgiven in bankruptcy.

      Quite frankly, you don't have that much debt. I wouldn't even consider bankruptcy if I were you. Sell a few things that you don't need or want, pick up a part time job, and trim expenses wherever possible. You should be able to get out of debt in not too long of a timeframe.
      Brian

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        #4
        As Wino said, you can't discharge student loan debt through bankruptcy. So the most debt you could possibly get rid of is the $3,500 CC debt and possibly some of the medical debt. You will not find any fans of bankruptcy on this forum anyway, except in the most dire of circumstances. If you want help, post your budget - your income and all expenses along with the debts, including interest rates, balances, and minimum payments. There are lots of smart and helpful people on here who are more than willing to help pick through budgets and find areas to cut in order to get debts paid back faster.

        If you aren't willing to do that, the best advice any of us can offer is to increase income (sell stuff, pick up odd jobs like dog walking or house cleaning, get a second job, etc) and cut expenses (don't eat out, drop cable, go to pre-paid cell, eat rice and beans, etc). Extra money goes to either the smallest balance debt or highest interest rate debt, depending on your exact situation and what will keep you motivated to keep paying things off.

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          #5
          Bankruptcy is definitely not the best option. Are you currently working? What's your income? Do you have a budget plan?

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            #6
            I do not know how much medical debt you have but your student loan and CC debt are not difficult to pay. Pretend these debts are cancers threatening your life. What would you do to get rid of them?

            I'm a big believer in financial bootcamp. This means that you sell all luxuries, stop buying luxuries(cable, cells, internet, beer, pop, cigs etc.) and start working as much as possible.

            You are nowhere near BK. You just need a more motivated mindset.

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              #7
              I too say, find a way to pay off your debt. Why skunk the companies that loaned you the money in good faith that you would pay it back? Stop using that credit card and cut out everything that can be cut out to get it and the other bills paid as soon as possible. Have you worked out a payment plan for the medical bills? With no other info aout your financial situation that is all we can say, but last I heard it costs something like $1500 for the lawyer, etc. to file for bankruptcy. Even if the cost is only $500 why spend that much to get rid of less than $4000 in debt. You owe the money, pay it back. And yes, I know what being deeply in debt means. To dig out once I had to divorce my husband, sell my house and be frugal to the bone.
              Gailete
              http://www.MoonwishesSewingandCrafts.com

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                #8
                Will a bankruptcy affect a student's future eligibility for student loans and other financial advice
                I don't have a clue what you mean about a bankruptcy affecting future financial advice, but with the amount of student loans and cc debt that the OP needed to get rid of, which I hope they have in the last 2.5 years since they posted, why would they even be thinking about MORE student loans??? The last thing a person should be thinking about when bogged down with debt is how it will affect their ability to borrow more, or to finance a home etc. Too many people think they are entitled to everything they want whether they can afford it or not. But the only real way to get out of debt is to work extremely hard to pay off the debt they have and then save up for the other things they want after that, including saving at least 20% for a down payment on a home if that is their dream. And I'm only talking about a home that can be paid off with only forking out 25% of their pay monthly. Yes, an old fashioned approach, but one that worked for many years.
                Gailete
                http://www.MoonwishesSewingandCrafts.com

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