“Dear Steve,
I am currently 53 years old and single (never married). I am a licensed practical nurse. I was working full time until 2005 – when I went into kidney failure and had to go on dialysis. Because of my illness I had to stop working and go on Social Security Disability. I was living with my Dad ( and still am) at the time.
Very unfortunately – because I had just purchased a new car and had other outstanding bills (mostly credit card debt – of approximately $8,000.00 – I had to file bankruptcy. (I was “Devastated”)… The wonderful news is – I received a kidney transplant 10 months after being on dialysis – but due to other medical issues – I have remained on SSD.
I am working part time and earning under $1,000 a month – as allowed by SSD. My SSD is approximately $1,300 monthly. I am now on Medicare – but due to the many medications I am on – I have to purchase a supplemental policy which costs me approximately $200 a month and I am sure is likely to soon increase. I have other medical bills which cost me approximately between $300 and $400 a month.
I currently have 3 personal loans out – (1 with Lending Club – for $5000 – which now carries a balance of about $4,300 – 2 others with a credit union (1 secured by my car for $8000 (now approx. $7200 and another non-secured personal loan for $4,000 – now approx. $3500).
I also have 3 credit cards 1 carrying a balance of around $1,800 and the other 2 carrying $1,000 each. I also put 2 other credit cards I had with InCharge – because I was trying to lower my interest rates on each of them – both were about 22%. One is down to $1700 from $2000 and the is down to $300 from $500. (In hindsight – I should probably never went with In Charge and just tried paying them down my self)….
My goal or desire – is to consolidate all of these debts, into one payment. However, I have turned down for another loan by Lending Club and also from Prosper; in addition to the credit union I am with.
My current credit score ranges between 684 and 712. I am working with a credit improvement company (Lexington Law) – in attempts to remove any negative reports on my credit history. They have removed 3 of 7 negative reports I have – so far… I am living with my 80 year old father – and the house is in both of our names and is valued at $150,000. I would try to get a home equity loan – but my father currently has one out for approximately $28,000 – and because of his very limited social security and pension (approx. $1400 a month) – I am also trying to help him in paying this off as well.
So it is a pretty complicated situation. I always pay much more than the minimum on my credit cards and I am never late on any of my payments. What would you recommend for me to try to consolidate/pay off debt? Any suggestions would be “Very Greatly Appreciated! Thank You Steve!!
God Bless!
Louise”
Dear Louise,
It’s funny how life works sometimes. What sounds like a tremendous hurdle with your health looks like it led to a great opportunity to spend more time with your father.
Correct me if I’m wrong but what looks like happened is you filed an initial bankruptcy due to medical reasons and then you later went out and took out additional new loans and incurred some additional credit card debt.
It is unclear exactly why you did that but I can see why Lending Club and Prosper might turn you down even though you have a decent credit score. It looks like you are just very maxed out based on your current income.
I always worry that another pay down the debt strategy isn’t going to work since you have no additional income and you are using some of your money to help your father pay down his home equity loan. Was that loan for you?
I can’t really see any reason at this point why you should be paying outside entities for help. The credit repair stuff is easy and you can do that for free. See The Get Out of Debt Guy Free and Easy Credit Repair Guide.
I question wether InCharge is even necessary because they are only dealing with a small part of your overall debt.
There is also the additional consideration about your current and future health. It may not be possible for you to supplement your income due to health limitations and we don’t want to increase the stress on your body if that will cause you to have more medical issues and complications. Besides, what would the wear and tear be on working additional hours and any continuing to care for your father?
Ultimately what we need to do is get your life to fit within your income as quickly as possible. I can’t see how a loan is going to solve this situation and if anything it looks like what you need is some way to balance the financial demands with your medical status and your situation.
The most logical approach in that case is probably a chapter 13 bankruptcy if it has been less than eight years since your chapter 7. And even then, with the equity in the house a chapter 7 bankruptcy might be a problem.
You can click here to find a local bankruptcy attorney and talk to them for free about your specific situation. Get the facts and then you can make an informed and educated decision if bankruptcy is right for you.
The least of the concerns right now is your credit score. More importantly we have issues like supplemental insurance and medication that need to come first.
In a chapter 13 bankruptcy you would make payments based on what you can afford and you would be able to keep the house.
By the way, if you have not done so recently, visit Benefits.gov and see what other benefits you are entitled to. Every dollar in qualified benefits reduces your financial pressure by a dollar.
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