I’ve Liquidated My Savings, Checks and CDs But I’m Still in Debt. – Jennifer

“Dear Steve,

I currently have liquidated all my assets (savings, checking, CD’s) and have not tapped into my 401(k) yet. I am newly employed at a school district and make $32,275/year. I am now living paycheck to paycheck. My current debt is car loan of $10,943 at an interest rate of 5.5% and monthly payment of $552 – I am currently ALWAYS 15 days late on its payment since my new employment. I also have a total of $34,336.24 in credit card debt and additional $100K+ student loan balance. I have borrowed some money from family members. I still live with my parents because I cannot afford to rent anywhere.

I want to get out of this debt hole, but I’m not sure what to do or where to go or what is my next step. It’s ruining my self-esteem and quality of life where I cannot even purchase gas to get to work or groceries for the week. I need A LOT of help and direction.


Dear Jennifer,

Well the answer is pretty basic. Debt problems are solved by either increasing income, reducing expenses or a combination of the both.

I would imagine as a new teacher it would be difficult to take on a second job right now. But many teachers do work as bartenders, waiters or servers to help supplement income. That extra income can be used to pay down the debt.

If, as I suspect, i’s not really a possibility for you to take on a second job right now then bankruptcy is a logical solution. With bankruptcy your debt can be eliminated or reduced and give you a chance to move forward. And let’s say you did get a second job latter once you become more adjusted to your new teaching environment, you could use that money to help pay off your student loan.

I’m not trying to be cavalier about your credit card debt but that student loan debt is a massive mountain of debt that needs to be addressed. Student loan debt is not dischargeable in bankruptcy and it will follow you to your grave unless we focus on eliminating that first.

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Now if we flash forward a few years and you’ve made a real dent in the student loan debt and your income has risen, how would that make you feel? Pretty good huh?

The only fair thing to do is for you to accept responsibility for your debt, deal with it, and strongly look at bankruptcy. In fact you can click here to find a local bankruptcy attorney you might like. Continuing to borrow from family doesn’t help anyone and it certainly doesn’t change your situation but taking definitive action will.

And don’t touch that 401(k). Those funds are protected from your creditors and you will desperately need them to grow for you to use when you are older.

So what do you think, does that sound like a reasonable approach to consider?


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.
Damon Day - Pro Debt Coach

Steve Rhode

3 thoughts on “I’ve Liquidated My Savings, Checks and CDs But I’m Still in Debt. – Jennifer”

  1. Thank you, Steve, for the encouragement. I have used the bankruptcy link to make contact with an attorney, but I haven’t had a chance to call them back since I work during the day.

    In regards to my student loans, the situation doesn’t get any better because I’m still finishing my master’s program. It’s quite a bit of money at this private school I’m attending, so I’m a little lost as to what I should do – continue or just forget about it and start paying down my loans.

    I’m a little nervous talking to a bankruptcy attorney. It worries me because I’m not sure what will happen or how it’s going to affect anything I do. Yikes!

    Thank you again and I’ll get cracking on the bankruptcy info.

    • Jennifer,

      As far as the degree goes, if you are already most of the way through and the end is in sight, finish. Otherwise you only have residual debt and no prize. You could always look into finishing the Masters at another less expensive school.

      Being nervous talking to the bankruptcy attorney is common, I felt the same way when I went through my own problems. However, keep this in mind, those of us on the other side of debt issues, helping, have heard it all and don’t judge. If for some reason you don’t click with the bankruptcy attorney, find another you like.

      No worries my friend, we’ll get through this together. You’ve got a friend in me.

      Big hug.


      • Steve,

        I’m halfway through my Masters, so I have a 50/50 decision to make. I was already considering to stop until I can handle all the finanical issues.

        I’ve scheduled to see the bankruptcy attorney this evening, so I’ll see if this is a route to go. I’m thinking of keeping my car through the entire process, though, because I won’t have anything to drive to work to (or any money to buy a new car).

        Thank you for your support! I really am learning a lot from this experience!



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