I will try to be brief:
I owe about $12k to installment payday loan companies such as Checkngo.
I owe about $2k in medical bills
I owe $9k on my car
I owe $2k to the IRS (new this year)
Credit isn’t great – about 680 but I do have a good job that I’ve been at 6 years.
Had cancer last year and my husband was unemployed and sick and as you can see I panicked and got very high interest rate loans
Payments on just the payday loans are $2k a month, Car loan is $350
We have cut back on pretty much everything we can, have 1 car only, no cable tv, don’t water the lawn even !
I cannot pay these huge amounts each month
Would debt relief help me? I did take these loans and I just cannot every pay them back at the 100% interest rates – Even if I could make the payments a $5k loan would be $40k by the time it was paid back.
Or would bk be a better option? I read horror stories about how I will never be able to even rent a house again etc.
Any advice would be very much appreciated.
First, let me dispel some of the myths about bankruptcy and renting. Yes, it is possible that a major apartment complex might have an issue renting following bankruptcy but for the vast majority of private landlords, it’s not a problem. Additionally, I can’t remember a single past client that was ever turned down by an apartment complex when they offered to put up a larger security deposit.
The critical issue here is that, as you describe it, your level of money available for payments sounds barely able to meet your obligations. In a situation like that some form of intervention is required to alter the monthly payment to make it more affordable.
This would be either through a legal payment reduction and financial second chance with bankruptcy or a more aggressive approach through debt settlement.
At this point I think the better approach is going to be to assign you homework to learn more about each option and what it would mean for you.
Only by educating yourself can you make a good and informed decision about what the best next step is going to be. My gut reaction is bankruptcy because I think that is the fastest way for you to regroup and be able to save money in an emergency fund to protect yourself moving forward.
I’d like for you to click here for debt settlement information and click here to find a local bankruptcy attorney. Once you talk to each, come back and update me in the comments and let me know which approach seems more reasonable for your personal situation.