How to get out of debt!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

You are starting to make more sense now. You agree that it is doable in 3 years instead of 5-7 that you claimed before. It actually takes less than 3 years to pay off 55k at 10% if you pay 2k a month which is what OP pays currently.

I dont know if bankruptcy is a better option for her. She might or might not qualify for chapter 7 with her income. Maybe it is worth exploring as well. And maybe don’t exaggerate and use a calculator next time and you come across as more credible

Yeah, it might be numerically "doable" but spending 81% of your take-home pay on rent+ debt is not sustainable for three years when your salary is $60,000 a year. (Did I handle that calculation OK? I didn't use a calculator... $2,000 to credit card + $700 car loan + $950 rent = $3650 out of $4500 take-home pay. Isn't that 81% of her take-home? For three years? Living off of 20% of your take-home might be OK if you are making $125,000 but I don't think it is sustainable when you only make $60,000. It doesn't leave you any ability to save for emergencies or illness for one thing.


"She might or might not qualify for a Chapter 7 with her income" is a great comment. Let me help you with that one. She stated her income as $60,000 to $65,000 per year. I'm assuming that fluctuation is because the higher number included overtime. A quick look at the statistics for cases filed after Arpil 1, 2025 shows the median income for a family of one is Pennsylvania is. $67,676.

Won't you agree that OP's income is below this number? So yes, her income would qualify her for a Chapter 7 Bankruptcy. That seems pretty straight forward.

https://www.justice.gov/ust/eo/bapcpa/20250401/bci_data/median_income_table.htm

Assuming she is in PA and not WV then yes. Also assuming she has not filed for bankruptcy recently (8 years)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

You are starting to make more sense now. You agree that it is doable in 3 years instead of 5-7 that you claimed before. It actually takes less than 3 years to pay off 55k at 10% if you pay 2k a month which is what OP pays currently.

I dont know if bankruptcy is a better option for her. She might or might not qualify for chapter 7 with her income. Maybe it is worth exploring as well. And maybe don’t exaggerate and use a calculator next time and you come across as more credible

Yeah, it might be numerically "doable" but spending 81% of your take-home pay on rent+ debt is not sustainable for three years when your salary is $60,000 a year. (Did I handle that calculation OK? I didn't use a calculator... $2,000 to credit card + $700 car loan + $950 rent = $3650 out of $4500 take-home pay. Isn't that 81% of her take-home? For three years? Living off of 20% of your take-home might be OK if you are making $125,000 but I don't think it is sustainable when you only make $60,000. It doesn't leave you any ability to save for emergencies or illness for one thing.


"She might or might not qualify for a Chapter 7 with her income" is a great comment. Let me help you with that one. She stated her income as $60,000 to $65,000 per year. I'm assuming that fluctuation is because the higher number included overtime. A quick look at the statistics for cases filed after Arpil 1, 2025 shows the median income for a family of one is Pennsylvania is. $67,676.

Won't you agree that OP's income is below this number? So yes, her income would qualify her for a Chapter 7 Bankruptcy. That seems pretty straight forward.

https://www.justice.gov/ust/eo/bapcpa/20250401/bci_data/median_income_table.htm

Assuming she is in PA and not WV then yes. Also assuming she has not filed for bankruptcy recently (8 years)

She said she lived in Gettysburg PA area. West Virginia would be quite a drive. Maryland would not be too far, I suppose, but the median income in MD is $82,000 for one person.

[Anonymous]

Hey OP, have you made any decisions?

I'm the one who has been researching Chapter 7 information. I originally thought you should sell your car before filing, but as I learn more, I think if you are aiming for a Chapter 7 it actually helps you to have that large car payment (Ironically) as it eats up some of your theoretical disposable income. So don't do that!

[Anonymous]

What if OP plans to file Chapter 13? Do you think that would be more messy in Oo’s situation?

[Anonymous]

I personally feel 7 is better than 13 for someone with no assets

[Anonymous]

File for bankruptcy.

[Anonymous]

No bankruptcy. The two kids need to take a break from schooling and help you out. All three of you should be working 40-50 hours a week while living together. I worked 50-60 hours a week when from 18-25. Haven't seen young people do it in decades, but it can be done. Restaurant are hiring. Work will become your whole life. Takes a few weeks to build up the stamina and it's all smooth sailing after.
Get rid of that car too.
Once you get the debt under control and are still on autopilot as far as 50 hours a week is concerned, you will start investing. Investing gives you power like no other. You can scale down to 20 hours a week, because the rest of the money for living comes from dividends. Your money earns money while you sleep. Now you can buy a car and go to school.

[Anonymous]

Anonymous wrote:No bankruptcy. The two kids need to take a break from schooling and help you out. All three of you should be working 40-50 hours a week while living together. I worked 50-60 hours a week when from 18-25. Haven't seen young people do it in decades, but it can be done. Restaurant are hiring. Work will become your whole life. Takes a few weeks to build up the stamina and it's all smooth sailing after.
Get rid of that car too.
Once you get the debt under control and are still on autopilot as far as 50 hours a week is concerned, you will start investing. Investing gives you power like no other. You can scale down to 20 hours a week, because the rest of the money for living comes from dividends. Your money earns money while you sleep. Now you can buy a car and go to school.

What you are describing is words for OP than bankruptcy would be.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You are thinking Op would do chapter 7 but I think chapter 13 is going to be much better if she wants to keep her car, retirement etc. chapter 13 is reorganization of debt and you still end up paying some of the debt including CC. Creditors have gone smart about it and it’s not as easy as it looks. Dealing with lawyers and paying them is another concern.

Not to mention, it's debt she incurred and is responsible for...the whole "just declare bankruptcy" advice is insidious and a sign of what a crap nation the US has become. But might as well be like dear leader I guess? Trump is such a shining example of responsibility.

Bankruptcy laws have existed for years.

And imo unless it's medical debt, you should still be responsible for it.

The two people who I know who filed bankruptcy were financially irresponsible, didn't live within their means. They created the mess when they made enough to live comfortably. They ran up credit card debt for wants and then couldn't pay it off. And one wouldn't get a job if he didn't like the job. So yeah. It is not others job to pay for your stupidity. You take on the debt you have to figure out how to pay it off.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You are thinking Op would do chapter 7 but I think chapter 13 is going to be much better if she wants to keep her car, retirement etc. chapter 13 is reorganization of debt and you still end up paying some of the debt including CC. Creditors have gone smart about it and it’s not as easy as it looks. Dealing with lawyers and paying them is another concern.

Chapter 7 is fine for OP. She has almost no assets. No house, I’m sure no savings or investments, no expensive art or musical instruments.

If she sells the car and buys something cheap for cash she will be fine there too. I think about a $5000 worth of car equity will be exempt from consideration if you file a chapter 7 bankruptcy.

All you guys going on and on about how bad a chapter 7 bankruptcy is? I think you’re approaching it from your own mentality where you do have assets to protect, where you have a house you wanna keep. You probably have savings in retirement that you could use to pay off debt. You just are having trouble paying the debt. You may be younger, married, with higher income and less debt.

Sure, in that case restructuring the debt and working out payment plans, buckling down for a few years makes sense.

OP’s situation is very different. Her earning potential is low in the future unless she goes back to school.

Her health is poor, at 42. It’s not gonna get better. (“lose weight “is not very useful or actionable advice right now.)

She has very little to lose in filing for bankruptcy, section 7. She has no assets that she’s gonna lose. The only thing she’s gonna lose is an ability to borrow more money for several years. But she’s not supposed to be borrowing money anyway right? The biggest concern is if it impacts her ability to rent an apartment. But she’s a single child free adult. She can handle a little instability in her living situation. It’s not like she needs a place for her little kids to live. There’s always someone who will rent you a room and you can deal with a lot for just a year or two until you find yourself back on your feet.

And someone asked why it’s so important for somebody to buy a house or a condo? That’s because a key to retirement is having a paid for housing situation, a pension hopefully, Social Security, hopefully and a nest egg to give you some more income in retirement sure if you have a great pension and a great Social Security Benefit, and great retirement savings of your own, a paid off house or condo is less important than.

But either way, if OP spends the next 5 to 7 years, trying to pay down this debt that is equal to her current income, she’s going to end up starting her fifties with no down payment for a mortgage, no significant retirement funds started, and no ability to earn more income in a less physically demanding job. There’s literally nothing of benefit to her if she doesn’t discharge the debt.

Before advising OP to file for bankruptcy look at the numbers. All she needs is to work with a debt management non profit to negotiate a 10% interest rate on her credit cards. If she does that she can pay off her debt in 2-3 years while keeping her apartment and car instead of renting a room from a stranger and driving a beater per your scenario

This---be responsible, find a good debt management company and reduce those sky high interest rates. Then adjust your lifestyle, work more (or work more smartly) and pay off the debt. Yes it won't be pretty, but she got herself into this mess by living above her means (way above) and now needs to deal with her choices.

+1000

Yes she created the debt. She needs to pay it off

And yes it won't be easy or fun. It's not supposed to be easy. She created a mess and as an adult you have to deal with it

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You are thinking Op would do chapter 7 but I think chapter 13 is going to be much better if she wants to keep her car, retirement etc. chapter 13 is reorganization of debt and you still end up paying some of the debt including CC. Creditors have gone smart about it and it’s not as easy as it looks. Dealing with lawyers and paying them is another concern.

Not to mention, it's debt she incurred and is responsible for...the whole "just declare bankruptcy" advice is insidious and a sign of what a crap nation the US has become. But might as well be like dear leader I guess? Trump is such a shining example of responsibility.

Bankruptcy laws have existed for years.

And imo unless it's medical debt, you should still be responsible for it.

The two people who I know who filed bankruptcy were financially irresponsible, didn't live within their means. They created the mess when they made enough to live comfortably. They ran up credit card debt for wants and then couldn't pay it off. And one wouldn't get a job if he didn't like the job. So yeah. It is not others job to pay for your stupidity. You take on the debt you have to figure out how to pay it off.

You can have your own moral beliefs about who should declare bankruptcy; that's totally valid.

But bankruptcy is, legally, an option for OP. Your opinion, frankly, doesn't apply to her.

[Anonymous]

Anonymous wrote:She created a mess and as an adult you have to deal with it

Yes.

You are correct.

Bankruptcy is one way an adult can deal with debt.

[Anonymous]

I don’t think Op Should ask her adult daughters to work extra to pay off her debt. That’s ridiculous and not their fault.

At this salary level, OP won’t be able to pay her debt for next 7/8 years, mat be longer.
She doesn’t have a lot of extra income and I wouldn’t be surprised if her actual expenses are more than her take off and she doesn’t realize it.

[Anonymous]

I doubt Op would ever be able to get out of this debt if her health is poor and she don’t have any emergency savings. It’s cutting very close if she’s already not breaking even every month. One incident or medical issue could derail all the progress. I do think she needs to find cheaper room situation after refinancing auto loan.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You are thinking Op would do chapter 7 but I think chapter 13 is going to be much better if she wants to keep her car, retirement etc. chapter 13 is reorganization of debt and you still end up paying some of the debt including CC. Creditors have gone smart about it and it’s not as easy as it looks. Dealing with lawyers and paying them is another concern.

Not to mention, it's debt she incurred and is responsible for...the whole "just declare bankruptcy" advice is insidious and a sign of what a crap nation the US has become. But might as well be like dear leader I guess? Trump is such a shining example of responsibility.

Bankruptcy laws have existed for years.

And imo unless it's medical debt, you should still be responsible for it.

The two people who I know who filed bankruptcy were financially irresponsible, didn't live within their means. They created the mess when they made enough to live comfortably. They ran up credit card debt for wants and then couldn't pay it off. And one wouldn't get a job if he didn't like the job. So yeah. It is not others job to pay for your stupidity. You take on the debt you have to figure out how to pay it off.

I am sure OP's situation is something like this in which she spent more than she makes and a lot on stuff either she wasn't smart about or overpaid for no reason. The really bad is the debt spiral when CC companies continue to charge you crazy amount on interests and people never get out of it.