I Have Some Debt Issues That Are Scaring Me. – Ryan

“Dear Steve,

My name is Ryan, I am 24 years old. I have some debt issues that are scaring me and I am hoping you can point me in the right direction because, honestly, I don’t know where else to go.

In 2008 I was eager to get back into school and finish up my degree in Mathematics to finally start my career. I had failed out of UCSC in 2006 due to bad decisions and debilitating depression so, at the time, it felt great to be moving forward again. I was accepted into Cal State Fullerton for Fall of 2008. In order to afford the move to CSU Fullerton, I took out $25,000 private student loan to cover my living expenses, car, and tuition/books. At the time, the plan was to find a job and use the whole $25,000 for the 2 to 3 years it would take to finish up my degree. But, as fees and living expenses increased, I had to take a high stress job at an IT company. 40 hours a week of engineering work on top of a full math regimine at CSUF really hurt my grades and I was subsequently unable to keep them up to the school’s standards.

I am now in a situation where I owe: $8,500 on two credit cards, $10,000 on a car, $1,300 on a computer, and $33,000 on a student loan. I make $16 / hour and work 40 hours a week.

Something that is very important to me is my mental/physical health. I am unable to afford health insurance so I cannot seek the professional help I need. However, I’ve taken up a martial art over the past year and that has severely helped my personal growth and overall well being. Right now I’m training to be a competitive fighter. (I am 6’8″ 300 lb so I’m physically a great fit for it) I am not banking my future on this, of course, it’s just a passion I’ve discovered. I am just telling you this because I need to make sure I can still train. I really fear slipping back into depression without it so it’s my #1 priority after all the necessities are taken care of.

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My question really is where do I start? I don’t trust most of the debt consolidation companies I hear about. Friends have told me to file Chapter 7 but I don’t think my student loan qualifies.

I just want to be a normal single 20 year old guy again. Is there any advice you could give me?

Thank you very much for reading this,


Dear Ryan,

Congratulations on finding a physical activity that you enjoy. It will certainly help to take away the edge of depression. But let’s try to address the underlying issues here.

The big problem I see is that the student loan is a private loan rather than a government backed loan. Any adjustment to payments are going to be up to the individual lender and not subject to one of the government programs available.

A Chapter 7 bankruptcy will not eliminate your student loan obligations but it might give you some peace of mind to focus on the student loan without your other debt in the way.

Depending on how much you want to reduce your debt burden and get to a point where you can reduce your stress and then have enough money to focus on health care, especially with your new hobby and depression, you might want to consider handing the car back to the lender.

If you decide to do that and you have alternative transportation then you could quite possibly eliminate your credit card debt, car loan, and computer loan. This might free up enough money to get back to creating a better life for you.

Before you make a decision either for or against bankruptcy you should click here to find a local bankruptcy attorney to discuss your situation with. I really don’t see a debt relief company as being a good fit based on your situation. My overall concern is to get your debt down to a point where you can seek treatment for the depression and once you get that under control your life will take a turn for the better.

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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.

Steve Rhode

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