Need advice

[tasha99]

Unless you are in your last year of school you may need to get a student loan for next year's year of school and so on. If you file bankruptcy that may interfere with your ability to get a loan for next year. It's my understanding that while you are under bankruptcy protection any lender would be very foolish to give you a loan. If you cannot finish college that may interfere with your ability to pay off your debt. The best thing you can do is pay them enough to keep them happy. The best thing you can do may be to finish this year, take a year off. Work and pay down some of this debt and then resume your schooling.

None of this is true. Your credit history isn't checked for Stafford loans, so a bankruptcy would not affect it. Neither would just neglecting the loans. Defaulting on a student loan does affect your ability to get more student loans, but revolving credit is irrelevant.

Also, I think it's an enormous mistake to take a year off from school. You lose momentum, and odds are (at least hopefully) you're in a program that will lead to higher income. It just doesn't make sense to slow down or quit, unless you're in a field that's for some kind of personal growth other than monetary.

I was in your position in 2004. I had to declare bankruptcy due to divorce--somehow I was the primary on our credit cards, despite being a homemaker. My ex even charged his divorce attorney to one of the cards. The laws have changed, but I'm not sure how. I never had a hard time renting because of the bankruptcy. I was super, super poor for a few years after that, then after getting an English degree, I worked subsistence level jobs. Went back to school for a MS to be a speech language pathologist and am graduating next week. So pulling yourself out of the muck of poverty can be done, but for me at least, it took years. I'm not sure how the bankruptcy laws have changed, or how much you owe, but I guess I agree with the people who say do not transfer the debt to student loans. Talk to a lawyer and if it makes sense to a real expert, get yourself a fresh start and finish school.

 

[tasha99]

how about if i just hang on and keep going as i have been and when someone threatens legal action, etc then i get a lawyer and file BK which will make them stop??

Why would you wait? So in 2 years, someone finally decides to get a judgment against you, then you file for bankruptcy, and your credit is ruined now (already) and for several years afterward. Or you file now and it's ruined for a shorter time. I would think either finding a way to pay the debt or officially filing for bankruptcy would be the way to go. Either one--but make a decision. Waiting for someone to act upon you instead of taking action yourself just drags out the misery. (just my opinion)

 

[Marionnette]

Am trying just not sure how..

It would make sense for you to put your cards on the table with people who deal with this on a regular basis. You can join a yahoo group called llnoe (living like no one else) by sending a blank email to LLNOE-Discussion-subscribe@yahoogroups.com. They are people just like you. Some are just starting their journey, while others have made it thru and stick around to help the newer members out.

I wish you luck, OP. You cannot just ignore this. You're at a point in your life when you should be aggressively saving for retirement. You need to put this situation to rest so that you can move in that direction.

 

[BoardWalkBelle]

I am worried about renting because where i live now, on the application it says something about they reject you if you have a BK, judgements, etc. Altho I am guessing since i live here already the dont check credit ehrn they renew your lease since i pay on time every month. The only thing i worry about is i live in an income restricted community and everytime i renew i have to fill out extra paperwork..i know they check my job and income when i renew// and yes, I know student loans dont depend on your credit but if i do BK i dont want to have any cash from loans in my bank acct becasue they would probably take it from me and i use that money to help pay bills...so i am stuck on that issue too.

 

[DizBelle]

I am a bankruptcy expert... not an attorney, but have worked handled bankruptcies in house for creditors for more than 10 years. LadyZolt is correct, student loans can not be discharged in a bankruptcy.

I would not just let the debt ride. It will eventually fall off your credit report, but several things can happen...

1. Suit can be filed and a judgment placed against you. This will make renting or purchasing anything more difficult, not to mention getting a job. Most potential employers pull credit reports now and will not hire someone with collection items/judgments on their report. Not to mention, depending on where you live, 25% of your income may be garnished.

2. Th creditor can file a 1099C with the IRS for the amount of debt owed. Then you have to claim this amount as income on your tax returns, and pay taxes on it.

IMO,you have two choices... file bankruptcy NOW or do whatever it takes to pay your bills. Either way, I hope you've learned from your mistakes. It's a lesson that a lot of people have to learn the hard way.

Good luck! Oh, I also recommend Dave Ramsey's books. They will be helpful for your financial future no matter what you do.

Re: bolded - This whole situation sucks but I'm not sure what mistake the OP made... Should the OP had not gotten medical treatment instead?

 

[BoardWalkBelle]

<<<I hope you've learned from your mistakes. It's a lesson that a lot of people have to learn the hard way. >>>
I got into this mess the way alot of people do" medical expenses with no health insurance and lack of a job...it was either get very ill and possible die and be homeless and hungry..or use credit cards...

i didnt use them for vacations or fancy electronics...

 

[Disney845]

I actually am receiving student loanst(hats another can of worms that i will worry about later) but am using that to help pay rent, etc on top of my job..I earn just 10.00 an hr so the student loan $ pick up the slack on rent..when i am in school i work just 32 hrs per week..

I am sorry for your financial difficulties.

However, I don't think anyone else really focused on this, but I think your financial problem is far greater than not being able to pay off these credit cards.

If you are bringing in less income than your expenses, which it seems clear from your above statement that you have been using student loans to cover part of your rent, then you seriously need to look into adjusting that situation.

I don't know what other expenses you currently have, but perhaps you need to look long and hard at cutting some of those out. This could mean cable, internet, cell phone, eating out, cheaper groceries, public transportation instead of maintaining your own vehicle, anything that is a luxury and is not essential (you may have already done this?).

You have already mentioned an income restricted apartment, but perhaps you need to look into even less expensive options. Maybe you could consider renting a room in someone's home which would be cheaper than maintaining your own place?

You stated you only earn $10/hr at your job and only work 32hrs a week while attending school. As hard a decision as this may be for you, this may not be an appropriate time for you to attend school. Especially since you are using student loans to cover normal living expenses...what is going to happen when those loans come due? Not only will you not have the student loan money trickling in to cover your shortfalls on rent, etc, but now you will have a whole new monthly payment that by the sounds of it you would be forced to default on.

Again, without knowing your specific situation, you might be better served by postponing school temporarily until you can become more financially stable and looking for additional work. Even if that means working 2, 3, or more jobs to pay your bills.

Once you have solved your current financial problems (by bringing in more money than is outgoing in expenses) and resolved your outstanding delinquent debts, you could start to build up funds in savings which would be able to be tapped into if you decided to go back to school and needed to lower your working hours.

 

[manning]

I am sorry for your financial difficulties.

However, I don't think anyone else really focused on this, but I think your financial problem is far greater than not being able to pay off these credit cards.

If you are bringing in less income than your expenses, which it seems clear from your above statement that you have been using student loans to cover part of your rent, then you seriously need to look into adjusting that situation.

I don't know what other expenses you currently have, but perhaps you need to look long and hard at cutting some of those out. This could mean cable, internet, cell phone, eating out, cheaper groceries, public transportation instead of maintaining your own vehicle, anything that is a luxury and is not essential (you may have already done this?).

You have already mentioned an income restricted apartment, but perhaps you need to look into even less expensive options. Maybe you could consider renting a room in someone's home which would be cheaper than maintaining your own place?

You stated you only earn $10/hr at your job and only work 32hrs a week while attending school. As hard a decision as this may be for you, this may not be an appropriate time for you to attend school. Especially since you are using student loans to cover normal living expenses...what is going to happen when those loans come due? Not only will you not have the student loan money trickling in to cover your shortfalls on rent, etc, but now you will have a whole new monthly payment that by the sounds of it you would be forced to default on.

Again, without knowing your specific situation, you might be better served by postponing school temporarily until you can become more financially stable and looking for additional work. Even if that means working 2, 3, or more jobs to pay your bills.

Once you have solved your current financial problems (by bringing in more money than is outgoing in expenses) and resolved your outstanding delinquent debts, you could start to build up funds in savings which would be able to be tapped into if you decided to go back to school and needed to lower your working hours.

Exactly, postpone school and get more work. If you have to get 3 jobs to make it, you get 3 jobs. Digging out of the hole should be the priority.

Get down to bare bones. That means no eating out period, no cable, no internet. get rid of your car if you have one. That gets rid of insurance,gas, maintenance etc. When I was in the army the drill instructor used to say "you are the proud owner of two jeeps...your feet."

Start eating gourmet lunches.....peanut butter and jelly sandwiches.

And NO vacations!!!!!!!!!

If it is not a necessity it doesn't belong in your life. I know, I grew up poor. As long as I had a roof over my head and my belly was full, I was happy as a lark.

 

[tlbwriter]

I got into this mess the way alot of people do" medical expenses with no health insurance and lack of a job...it was either get very ill and possible die and be homeless and hungry..or use credit cards...

I'm not saying this was a mistake on your part, but many people don't know that medical bills can often be paid off in very small installments over a long period of time, just by asking to set up a payment plan. In terms of maintaining your credit history, it's better to keep CCs up to date and let medical bills take a back seat. I know it's too late for you, but it might help someone else.

 

[snarlingcoyote]

OP .

I think you're being very brave right now. You're facing this problem. Don't back down now from it now. Just ignore the bits about making better choices than you did in the past - it sounds like you made the best choices you could in the situation you were in - and put to good use the advice from people who work in the industry and have your good in their hearts.

About school. I would definitely weigh that carefully. If you're in a field where you KNOW for certain that when you finish the program you will have a much higher earning potential, stay as you are. If your earning potential is uncertain at the end of this program, let it go, even if the program is competitive. There will be other opportunities!

You're in my heart and I will pray for you.

 

[BoardWalkBelle]

actually, regarding the school loans, i have decided not to accept them, although i am receiving pell grants that covers the cost of classes..so i think i should finish school since i do qualify for the grants..I managed to get thru last semester with out loans..barely.. so i can probably do it in the fall semester...and i can work a few more hrs per week over the 32.

 

[BoardWalkBelle]

re my medial bills.. they were mostly for dr. office visits and tests that pretty much had to be paid then and there...and 150.dollars worth of prescriptiond per month for a year that had to be paid for when receiving them..Plus one ER visit that cost 500. that i put of a cc..

 

[tasha99]

I am sorry for your financial difficulties.

However, I don't think anyone else really focused on this, but I think your financial problem is far greater than not being able to pay off these credit cards.

If you are bringing in less income than your expenses, which it seems clear from your above statement that you have been using student loans to cover part of your rent, then you seriously need to look into adjusting that situation.

I don't know what other expenses you currently have, but perhaps you need to look long and hard at cutting some of those out. This could mean cable, internet, cell phone, eating out, cheaper groceries, public transportation instead of maintaining your own vehicle, anything that is a luxury and is not essential (you may have already done this?).

You have already mentioned an income restricted apartment, but perhaps you need to look into even less expensive options. Maybe you could consider renting a room in someone's home which would be cheaper than maintaining your own place?

You stated you only earn $10/hr at your job and only work 32hrs a week while attending school. As hard a decision as this may be for you, this may not be an appropriate time for you to attend school. Especially since you are using student loans to cover normal living expenses...what is going to happen when those loans come due? Not only will you not have the student loan money trickling in to cover your shortfalls on rent, etc, but now you will have a whole new monthly payment that by the sounds of it you would be forced to default on.

Again, without knowing your specific situation, you might be better served by postponing school temporarily until you can become more financially stable and looking for additional work. Even if that means working 2, 3, or more jobs to pay your bills.

Once you have solved your current financial problems (by bringing in more money than is outgoing in expenses) and resolved your outstanding delinquent debts, you could start to build up funds in savings which would be able to be tapped into if you decided to go back to school and needed to lower your working hours.

Exactly, postpone school and get more work. If you have to get 3 jobs to make it, you get 3 jobs. Digging out of the hole should be the priority.

Get down to bare bones. That means no eating out period, no cable, no internet. get rid of your car if you have one. That gets rid of insurance,gas, maintenance etc. When I was in the army the drill instructor used to say "you are the proud owner of two jeeps...your feet."

Start eating gourmet lunches.....peanut butter and jelly sandwiches.

And NO vacations!!!!!!!!!

If it is not a necessity it doesn't belong in your life. I know, I grew up poor. As long as I had a roof over my head and my belly was full, I was happy as a lark.

I just have to say, there are two schools of thought on this. I think she should stay in school. I was in her position, went back to school, and have a new job starting in August at 5 times the salary I was making before, PLUS benefits, which I didn't have. Trying to get out by working low end jobs doesn't work. Staying in school and getting skills that aren't a dime a dozen is a more reliable way out of poverty, imo. Just make sure you're in school for something with good wages and a demand. Student loans aren't due until you have been out of school 6 months. For me this was a plus--every time I felt like quitting, I thought Oh no! gotta keep going to the end!

Keep in mind that stopping now--partway through a program, will make those loans already taken out due. Stopping when you're really done rather than quitting will make them easier to pay off.

And there is nothing wrong with living off student loans. That's what they're for.

 

[BoardWalkBelle]

believe me, i do eat alot of pb and j sandwiches..my grocery bill is kept to a minimum...

 

[Carly_Roach]

believe me, i do eat alot of pb and j sandwiches..my grocery bill is kept to a minimum...

One last word:

Justifying yourself and your spending to total strangers on a message board doesn't pay the bills, solve your problems or do you any good whatsoever in real life. Whatever you say here will always reap comments about how lacking you are in your choices or who you are as a human being. So stop the vicious cycle.

You came here asking for advice about whether or not you should declare bankruptcy or hold off on paying the CC bills for the next few years. I'd stick to the advice you've received about that specific topic and move on with your life. There will always be lots of people out there willing to tear down your past choices, tell you how miserably you should live now and for the rest of your life because of those choices, and try make you feel lower than dirt if you don't do what they think you should do.

My best advice to you? Consider your choices as you stand now. Ask your family, close friends and people you know in real life what they think. Then do what will be best for you, not what's best for total strangers. Don't let them fool you: they do what's best for them all the time - they just don't post about it.

Strangers have no stake in your well-being. People who love you do. Talk to them.

Best of luck to you!