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Single Mother With Tons of Bills, Upside Down on Car and Private Student Loans

“Dear Steve,

Car payments are to much and i have to much negative equity. Single mother with toms of bills including a high interest rated private student loan.

Cant afford the payments on my car I tried to refinance and trade it in. Wasnt successful I have to much negative equity on the car. What should I do? Is a voluntary repo a good idea.”

This is a classic and logical time for you to consider bankruptcy to clear the decks of your debt that’s dragging you under and leave room for the student loans. This isn’t a matter of skipping away from your debt like it doesn’t matter. Instead we need to see this for what it really is, you’re drowning.

Consider this, you have a greater responsibility right now than keeping your payments current. Your primary responsibility needs to be the care and feeding of your children and keeping them safe. And safe doesn’t mean just locking the doors at night. It also means being able to save money each payday to protect them in case of a financial surprise.

If you are struggling to make ends meet and you can afford the car payment then intervention is the only answer.

Don’t worry about rebuilding your credit and buying a car on credit in the near future. If you follow this guide you will be able to have great credit again in about two years or so.

After the bankruptcy you’d even be eligible for car financing, albeit at much higher rates. The key though will be to just buy a beater, something cheap, that will get you back and forth. Then, once you build up a savings account, rebuild your credit and revaluate your situation you’ll be ready to buy a new car again, if that’s what you want to do.

You are underwater and upside down on the car. Your choice is to win the lottery or go for a legal fresh start and get the second chance available to under the law. Find a local bankruptcy attorney and go talk to them. They generally don’t charge for consultations and they’ll be able to answer all of your questions to make sure you are comfortable.

I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.

Then use the free How to Get Out of Debt Calculator to review your options.

Please post your responses and follow-up messages to me on this in the comments section below.


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.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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