“Dear Steve,
I live in Los Angeles, CA and was unemployed for several years and was not able to pay my credit card and student loan bills among other bills. Now I have a job with okay salary and my living expenses are not much. I can afford to start paying off my debt.
I have credit card debt in the neighborhood of $10,000. I have not paid any of my debt in several years nor have I paid any of my school loans in the same time span. Can I still work this out with creditors and begin to pay them back through a debt management program? Some people have advised me to file for bankruptcy but I think the amount is not so much that I cannot repay with reasonable payment schedule.
Is it too late or can I still work with creditors? Can you recommend a debt management program in the Los Angeles area? Also can you recommend someone to speak with that can help me get back on track with paying back my college loans? The bills I get are out of my ability to pay but with the right representative maybe we can work out a better repayment plan.
My college debt is around $60,000. I no longer answer my phone for fear of collectors and need to pay back my debt so I can be at ease now that I can pay down my debt. But prefer if I had the g uidance of a credit counselor to help with a debt management program.
Thank you for your help and I look forward to your reply.
Adan”
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The Answer
Dear Adan,
First off, congratulations on finding a job.
It’s not the amount of debt that’s a determining factor if bankruptcy is right for you, but the need for the protection it offers you.
I’d first set my sights on getting the student loan debt back on track. Hopefully these are government loans. If so, then you’ve got some great options. The best would be to consolidate them and then place them in the income based repayment program. For more information see this and this.
If these are private loans, before you do anything, update me in the comments below. I might suggest a different path for you then.
Either way, I think we need come clarity on the student loans first before we even begin to think about any strategy to repay other debts.
The good news is you are taking some initial steps and this process will result in addressing the debt. That will reduce your stress level, significantly.
One little nugget of advice, just make sure you NEVER call a debt collector toll0free telephone number from your cell phone. They can capture the number you are calling from and use it to hound you.
Please post your responses and follow-up messages to me on this in the comments section below.
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