I am a 35 year old mother of 2. I currently have an MBA but haven’t been using the degree at work because I take care of my ill father part-time and work-part time at a bank.
Currently I owe $89,000 on my house, $38,000 in federal student loans and $36,000 in credit cards. My question is- should I consider bankruptcy? I can’t imagine how I can get ahead of these bills when I’m not bringing in a significant income because I take care of my ill father.
Should I file bankruptcy or try to pay off my debt?
I can certainly understand how stressful those responsibilities are. There are no life financial rewards for doing th e right things for our parents or loved ones who need us.
The current situation is the result of a combination of conflicting choices. On one hand you are a well educated person who incurred student loan debt in hopes it would lead to higher incomes in the future to offset the student loans.
On the other hand that investment in yourself isn’t paying off right now because you are not able to utilize the degree you financed.
In the short run the federal student loans can be managed through one of these programs.
You wonder if bankruptcy is an option for you. The answer is bankruptcy is the only legal option consumers can use to proactively deal with their debt. To compare all your options, use my online get out of debt calculator.
To understand what type of bankruptcy would be best for you, you’d need to talk to a licensed bankruptcy attorney in your state.
But just on face value it seems if you did not have a lot of equity in your home and could file a chapter 7 bankruptcy, you would shed the unsecured debt, could lower your student loan payments through on of those programs, and get back inside your income.
Ultimately you might have to explore state funded managed care for your father to allow you to get back in the job market to use your MBA. But if that really isn’t an option for you then addressing your current debt so you can get back to living within your current income would be a stress reducer.
This article by Steve Rhode first appeard on Get Out of Debt.
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