I owe about 22K school loan, 7K in credit card, and a $230 phone bill. I only make roughly $1800/month . I don’t have car payments, I have rent which takes about half of what I make then the rest is for food, gas, and child support. The whole situation has gotten out of hand, and I’m so confused how and where to start repairing my credit. I don’t really want to file Bankcruptcy but is that my only option?
This is not so clear cut as you would wish. With the student loans as part of the mix it complicates things a bit. The biggest danger is if those loans are deferred or on forbearance where you are not making payments on them. If that is the case they are growing with interest that will have to only be paid back.
If your loans are government backed then you should look into the Income Based Repayment (IBR) program and see if it will provide you with some payment relief for the student loans.
Child support is also a priority debt. If you don’t pay your child support you can go to jail. Child support is court ordered and not an optional debt. Child support and student loans cannot be eliminated with bankruptcy.
So that leaves your credit card debt and phone bill as your only unsecured creditors. What should you do there? Well if you can’t afford to pay them after meeting your student loan, child support and basic expenses, then you can’t pay them. When you don’t pay them you will wind up in collections and possibly be sued by the creditors. If you had money to go bankrupt it could eliminate those two debts. But in the absence of being able to afford to file bankruptcy you’ll just have to let them sue you.
If you would like to know more about bankruptcy then click here to find a local bankruptcy attorney you like. Make an appointment and go talk to them.
Someone might comment that $7,000 in credit card debt isn’t enough to go bankrupt over but it might as well be $70,000 for you. Even though the number is not as big as other people it is still way out of reach for you.
Your only other option is to find a higher paying job or get a second job to increase your income. With expenses already trimmed to the bone, increasing income is the only way out with the intervention of bankruptcy.
Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.