At my wits end: have about $30K in unsecured debt some of which are currently in suit. Have approx. $150K in Student Loans (Law School — I know). Own a vehicle approx. value of $12K which was purchased from proceeds of life insurance policy from wifes – fathers passing. Still paying on another vehicle and possibly upside down on it (but not by a lot). Both wife and I work full-time & I also work a second job…..when paying all bills / living expences (including student loans – approx $1800 per month) – there is not enough $$. No mortgage as we were able to get out from under that through a short-sale.
What to do? I was looking at filing Chapter 7 – however we would most likely fail the means test (as student loans cannot be included in figuring pay outs for determining disposable income). And, under Chapter 7, would most likely lose the vehicle that is paid off. If we file a Chapter 13, it would appear that the repayment plan (including student loans) would keep us in a very similar position we are currently in — more going out than is coming in.
Your thoughts would be greatly appreciated.
One of the books I wrote, “The Beach Misses You” might be just the insight you are looking for. You can download the book for free as my gift.
At some point, looking at this situation based solely on the facts and numbers is going to be an incomplete view. Life is more than just the numbers.
You may have to come to a realization that some short term pain, like maybe the loss of the car, will result in a longer term advantage for you.
I think the particular question you need to answer is if a Chapter 7 bankruptcy would result in a higher quality of life for you moving forward? It seems like both the current path and Chapter 13 bankruptcy leave you on the “gerbil wheel of debt” that I described in my other free book you can download, “The Path to Happiness and Wealth.”
Unless I’m missing something you have not told me it seems your current situation is the result of too much student loan debt to support based on your current income. I would imagine that some of the credit card debt landed there because things were otherwise stretched thin. If your student loans are government backed you might want to contact the Department of Education and see what options may exist to give you some breathing room with those as well.
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.