I have about $64,000 in private student loan debt. They are consolidated into one loan with repayment of $500.91 a month for 20 years. After graduating college with a bachelor’s (started to do master’s then realized how much debt I accumulated) I got work on the lower end of the spectrum in my field.
After the oilfield decline, I was laid off for months. I had bills to pay, I used my credit card, used high interest loans to be able to live.
I got a new job (not in my field, but still in the oil field). I bought a house because I now have a newborn child. So on top of living expenses for me and my family, child care and trying to pay off on debt I am left scraping during the month to try and save something for emergencies, but I’m just ending up paycheck to paycheck.
Should I try to file for bankruptcy or would it be simpler to default and then face it head on?
I wish there was an easy answer for your situation. There is not. The ability to discharge student loan debt is both a fight and a technical war a bankruptcy attorney would most likely have to fight for you. But I would urge you to read These Private Student Loans Can Be Easily Discharged in Bankruptcy.
As far as defaulting on your student loan payments, again, that’s another strategy that is dictated more by circumstance than a best case solution. For that issue I would invite you to read Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan.
Either strategy has it’s unique challenges. If you pursue the bankruptcy route you will need to first make sure you have found a bankruptcy attorney with experience in this area and who is willing to take this on. If you pursue the default approach you need to be prepared for the possibility of being sued over the debt.
Here is what I do know for certain, if you don’t make some adjustment about the debt, increase your income, or reduce your expenses then we already know what the future will look like. You will be without a safety emergency fund and living paycheck-to-paycheck, hoping the oil market doesn’t swing down again.