Question:
Dear Steve,
I’m an avid faithful reader of your newsletter. Ok…….HELP !!!!!!! I am about $40,000 in debt. All I “think” I need is one ” loan” one “payment”. Problem , I can’t get just one loan when asking for an amount to cover this debt. Any suggestions , advice?
In the past , I had an account with Lending Club no problems – paid in full. I figured I’ll apply but was denied.
My family and I live frugally no outlandish living. This debt is from the years after the bankruptcy just to “catch up” on day to day expenses ( I live around Los Angeles Ca). Thank you so much.. just trying to live again.
Bankruptcy Ch. 7 discharged 2012. Credit scores between 710 to 680 , no delinquent accounts or payments. Annual income around $105,000. Have accounts with interest rates between 14 % to 23% , some personal loans + ( one credit card ). No car payments , although one vehicle used to secure an loan. Renting an house.
Frank
Answer:
Dear Frank,
Well thank you for being an avid and faithful reader. I’m honored you asked me for help.
A few things jump out at me from what you shared.
With a bankruptcy about four years ago, your credit scores seem low. It feels as if you might not have made rebuilding your scores a priority. You might want to read Easily Rebuild Your Credit After Bankruptcy.
Since your bankruptcy it seems as if your income has not been able to keep up with the life demands or surprise obligations and credit has been used to help make ends meet. The vehicle used to secure a loan, screams that message to me. So that tells me that, for whatever reason, your life just doesn’t fit within your income. Something is going to have to change.
Probably the most important issue is you have a family and you live around Los Angeles. That is a very expensive area to live and while an income of $105,000 might go a long way in Akron, Ohio, it just won’t in L.A. In fact I know someone who just moved from a hole in the wall near L.A. to spend the same amount renting a 4,000 square foot home in Colorado.
It might be time to think of even moving. For example in Akron, the median household income is $45,000 and the monthly income spent on housing, utilities, and commuting was only 28.9%. – Source
I use Akron as an example and I don’t know what your skill set is but it is possible you can live a better life someplace else.
If you are looking for another place to get a loan, look at Prosper.com but I think with your current low scores it is still going to be tough.
If you insist on staying put, you might have to look at even a Chapter 13 bankruptcy to right the ship.
Look, nobody likes change. Moving is a radical life adjustment. But what we know for certain is you got a fresh start in bankruptcy and the combination of your life, maybe misfortune, and your income and not cutting it where you are now. You are either going to have to reduce expenses or increase income by looking for a higher paying job where you are now or moving to a less expensive area.
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.
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Frank, I just answered your question. Steve