Jen Z asked:
I have 40k in credit card debt, and 50k in student loans. I have zero assets and rent. I do have a car that is 21/2 years old and a loan that is current because I can’t lose my car. I pay a total of $1100 in credit card bills to make minimum payments. I have attempted consolidation numerous times and transferred balances. However, after the zero percent for a year they go up to 30%! I need out of this mess. I don’t see how at an income of only 36k a year. My credit union turned me down for a loan at a lower interest to consolidate. I work various part-time jobs, but it only stops the additonal need to charge so that I have extra cash for gas, food, and occassional entertainment. I live in NV and the median income to file chapter 7 is 39,500, so I’m below that. I can’t buy a future home on my salary. I have a stable car that should last the next 10 years (camry). I may move to out of the country giving me new credit anyway in the next few years. Any ideas? Thanks.
I have 40k in credit card debt, and 50k in student loans. I have zero assets and rent. I do have a car that is 21/2 years old and a loan that is current because I can’t lose my car. I pay a total of $1100 in credit card bills to make minimum payments. I have attempted consolidation numerous times and transferred balances. However, after the zero percent for a year they go up to 30%! I need out of this mess. I don’t see how at an income of only 36k a year. My credit union turned me down for a loan at a lower interest to consolidate. I work various part-time jobs, but it only stops the additonal need to charge so that I have extra cash for gas, food, and occassional entertainment. I live in NV and the median income to file chapter 7 is 39,500, so I’m below that. I can’t buy a future home on my salary. I have a stable car that should last the next 10 years (camry). I may move to out of the country giving me new credit anyway in the next few years. Any ideas? Thanks.
Unless you you have a rich Mom in Switzerland you should try to make it here!
Pay more than minimum on your cards!
Creditors can tell if you are making larger than minimum payments.
Start using your cards for gas/maintenance and groceries and learn to live off less entertainment for a while.
Your car is the best asset you have, so don’t let it run down.
After six months of over payments you should start to see a change in your credit, but don’t stop!
Prove to your creditors that you have the ability to pay your debts and soon you’ll get that consolidation loan!
Good Luck!
Left by Human on February 11th, 2010
Keep in mind you do not get “new credit” by leaving the country–You start out at ground zero again and have to build it up.
Bankrupcy is not the deal it used to be.
Left by ptstrobl on February 13th, 2010
7 most important things about bankruptcy will help you get an answer.
1. Bankruptcy is process adopted by federal court process catering to individuals and businesses repay their debts or clear their debts under the protection of bankruptcy court. Also known as “reorganizations ” or “liquidations”, bankruptcy is often the last recourse to get out of any debt.
2. When the property of the debtor is sold to recover and pay off the debt it is called Chapter 7 bankruptcy. Contrary to popular belief, all the property owned by a debtor is not sold, some part of it is left with him to allow him to start afresh.
3. When there is no sale of property but the debt are reorganized so as the debtors, are able to repay them over a long period it is called Chapter 13 bankruptcy.
4. Both these types of bankruptcy have a large number of rules, and exceptions, suited to different kind of debts, individuals and other concerns.
5. The “ticket in” is counseling session that everyone who wishes to file a bankruptcy must attend. This session must be attended at least six months prior to filing for bankruptcy. This term was adopted in the new bankruptcy law. Read more about it at:
Left by alexa dion on February 16th, 2010
Bankruptcy will not forgive a student loan. You will have to pay that $50,000 back at some point. The longer you take, the more interest will pile up.
So basically, all you will declare in a bankruptcy is $40,000 in credit card debt.
Your credit sounds like it is pretty much destroyed right now anyway, so bankruptcy may be a good solution.
You will need to focus on rebuilding your credit, and learning to live within your means after you declare bankruptcy:
To Rebuild Credit: has a great newsletter that gives recovery advice. The Resources section on their website has a bunch of great articles to get you started.
To Live Within Your Means
Make a commitment to dramatically cut you spending. No eating out, no movies, no new clothes, no nightclubs, etc, until the student loan is paid off. It will be hard, but you can pay it off in a couple of years. You may have to get a job waiting tables on weekends, or working at UPS early in the mornings (or both). This not only will increase your income, but it keeps you busy so you don’t spend money on entertainment.
I’ve been there too, so I’m not just talking out of my butt. I did similar what I suggested above (I started consulting on the side, instead of the other jobs though). I got used to the hours and loved the extra income, so I still do it and work about 70-80 hours every week. All my debts except my house are paid off, and my house should be paid off in 5 years or less.
You can do it, and it isn’t as hard as it sounds. There are no tricks managing your finances….just spend less than you earn.
Left by Brian H on February 19th, 2010