I have been usign your site fro gudiance in the Allegro Law mess, as I was one of their former debt management plan clients. In the past year, I received a promotion at work, which gave me a huge pay bump–almost $15,000 a year. I decided to purchase my first home, which I successfully did, and my mortgage payment, is half of what my rent used to be, so I am saving money on housing. Also, since I did receive the first time homebuyer’s tax credit, I was able to pay off almost all of the credit cards I had been using the DMP to help pay down. I also made sure to put a portion of that money into savings so I would have a emergency fund. I am also lucky enough to not have a car payment.
However, even though I now make significantly more money than I used to, have less credit card debt, pay less in housing costs, I am stuggling to get by due to student loan payments. I have applied for, and qualify for the IBR repayment plan for my federal loans. Unfortunately, since my income went up, my payment skyrocketed for the one loan. I have applied to consolidate all of these federal loans into one loan, and if it works, my monthly payment will be more manageable. However, my private student loans are what are really killing me. I have talked to that lender and am on a gradauted repayment plan, which halves my monthly payment, but still, that monthly payment, is too much for me to make.
I have no idea what to do. I still am paying down some credit cards. I do not want to drain the little I do have in savings to pay off more, as honestly, it would not help all that much and I feel better having money set aside. On top of the student loan debt, I have a serious medical condition, and my monthly medical expenses are growing. I do not lead an extravagant life style–I have cut out all non-necessities in my life, such as cable, dining out, etc. However, after I pay all my monthly bills, I have less than $300 a month to spend on gas, groceries and medication.
I have looked into getting another job, but my work schedule is erratic now, and plus with the economy being as it is, it’s just not a feasible solution.
I know nothing will free me from those darn student loans. I thought about a debt consolidation. Should I file for bankruptcy to discharge my credit card debt, to free loan, as the interest rate might be lower on that and the total payment could be lower than what I currently pay per month on my cards, but, my credit is shaky due to the amount of student loan debt I have, plus not to mention that my mother had me as an authorized user on some of her credit cards, and the limits on those were extremely high, so it doesn’t really help me to look as though I once had a credit card in my name with a limit that is higher than what my annual income is.
Anyhow, since I haven’t even owned my home for a year, I don’t know if a home equity loan is even an option, as Idon’t have that much equity in it it yet.
I just feel stuck and don’t know what to do. I make all of my payments, never have defaulted and never want to. But this situation has me so worried that I don’t sleep at night.
Can you offer any adivce?
Well you’ve certainly been through the wringer with all your struggles.
Of everything you said the one statement that concerns me the most is that about your ongoing medical expenses. You say those expenses are growing and I’m not sure if they will result in a large expense you can’t pay? If so, bankruptcy at this point might not be the right move if you go bankrupt and then have a large unmanageable medical debt afterwards.
But, if I hear you clearly through your words this might just be ongoing medical care issues that are a regular part of your life.
When it comes to making the decision to file bankruptcy the student loans really change the equation. Student loans have all sorts of power and punishment and can’t be discharged in bankruptcy. If you are finding it difficult to get by after paying your ongoing medical expenses, student loans and living expenses then bankruptcy is a reasonable consideration.
And then there is the issue of you being so worried about your financial health that your physical health may be suffering as a result. Your lack of sleep and worry can add to the stress and that can significantly impact your health and it all becomes a vicious circle. Based on all of that, I think bankruptcy is an option you should investigate.
You can click here to talk to a local bankruptcy attorney and if you’d like a second opinion about your situation or a personal consultation by another debt coach, please feel free to contact Damon Day.
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.