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So here is my situation...I am a one person family (which btw, does society make it much more difficult for single people to get by financially or what!?...The assumption for everyone seems to be a two income, married, etc household..but I digress...)
I was doing SO well financially speaking until about 2 years ago ,when I got outsourced from my job and, sort of got into a gambling/slot machine habit that I have hopefully squelched (easy when you no longer have money to play lol)....
After being outsourced, and not knowing what the future may hold, I withheld payments on my 5 or so credit cards...total balance there about $4,500 and 3 personal loans, total balance there about $4,000 , and $2,800 out of pocket after insurance for emergency abdominal surgery (divirticulitus) and other smaller miscellaneous debt of about $1200 for a total of roughly $12,600 on the low side....
Not knowing what the future would hold financially, I ceased all payments up through today, when I'm finally starting a knew job next week commensurate with the income I was making before the outsourcing...
During those 2 years, I unfortunately decimated my 401k down to $0 where it's at today , 10k at a time to live and incurreed fees and penalties each time. I also was drawing unemployment benefits for the last half of 2016 and most of 2017 and did not elect to withold federal taxes to have more week to week income. I made the grave mistake of simply not filing federal for 2016 because I didn't think I would have the money, and am anticipating it now being close to $20k, due to some large windfall drawings I won that year at a local casino totalling about $27k...I did get an extention and have until this October to file, which I will do.
The last leg of my trifecta of debt , is my student loan, which also tragically, I let balloon from about $5000 actual dollars borrowed and still owed , to about $38,000 today , due to letting callers convince me to refinance with them when I was younger and uninformed about the massive penalties, interest and other fees that would acrue. I used a whole bunch of forebearance thru most of them and now want to try to get a handle on repaying things.
So there is my situation...the trick is to figure out what my best option is of the three groups of debt I have...group 1. personal loans/credit cards/medical/misc ...group 2. upcoming federal taxes unpaid for 2016 and 2017, the biggie being 2016 ...and group 3, my student loan debt
Of group 1, 3 loans/credit cards have gone to law office summons....of group 2, I was told by the IRS when I called them I might try an 'undue hardship' repayment plan when I laid out everything above to them and of group 3, I have filed to have an income contingent forgiveness plan, but am worried if that escalates once I start my new full time job next week, the payment may balloon and critically impact my ability to make rent and vehichle payments, both of which I am one month behind on.
I really want to try to attack all the groups of debt and work on some kind of automatic repayment to all three groups that is the least headache to avoid what I am speculating may happen down the road , worst case scenario, if I don't start making an effort (garnishment, withholding social security payments, and taking a retirment balance I have of about $40k from the job I earned before being outsourced or worse)
Any kind of input you can provide I will listen ....I have thought for group 1 about debt consolidation or some kind of debt resolution company, but, 1 loan for about $3k owed was secured with my truck as collateral (secured) so that instantly excludes it....some people have suggested chapter 7 or 13 bankruptcy but I really want to avoid that as a last result. For me, the difficulty of keeping track of SO many potential outgoing payments to all the seperate entities is itself overwhelming, let alone whether I can afford to do it.
Contact each lender. Tell them you have been out of work for two years but now have a job. You would like to work out a repayment plan including forgiveness of penalties and a lower interest rate. I would not give then the gambling part of the story. Fortunately I have no experience in this area but it maybe better to go to a debt consolidation service. If you do I would be careful in selecting one.
Ok. Setting aside my annoyance with starting off complaining things are harder for single people and then talking about being addicted to gambling...
You also didn’t provide enough info...but I’ll offer this quickly:
List out your cash take home after taxes, ect. Figure out what you need to live off of at the bare minimum of expenses. You will have an amount of free cashflow left. Figure out what that is to apply to prior debt without causing you to lose something like your housing or vehicle. Do not let your past debts interfere with that side of your financial house. Pay those expenses first to keep yourself going.
Pay the federal taxes you owe first.
Try to make payment plans with the other creditors. Pay the minimum on all of these debts if you can to keep them current. If you still had free cashflow above keeping those current, apply it to the highest interest rate debt first.
Also, it amazes me a student loan debt can explode from 5k to 38k.
Last edited by Thatsright19; 09-19-2018 at 03:12 PM..
I also don't know how you can accumulate 38K of student debt from borrowing 5K, and you also didn't say how old you are.
If you are into your 40s or so, then you might want to refinance the student loan so that you'll pay the minimum possible monthly and just assume you'll be paying off the daily interest and that will be or 25 years.
After that, the debt will be forgiven.
If you're payment is $300 a month, then it will be $90,000. That's a lot more than you owe, but you don't HAVE $38,000.
I also don't know how you can accumulate 38K of student debt from borrowing 5K, and you also didn't say how old you are.
If you are into your 40s or so, then you might want to refinance the student loan so that you'll pay the minimum possible monthly and just assume you'll be paying off the daily interest and that will be or 25 years.
After that, the debt will be forgiven.
If you're payment is $300 a month, then it will be $90,000. That's a lot more than you owe, but you don't HAVE $38,000.
I would like to know that as well lolol....actually though, the $5k that wasIN 1988 , when I finished college...due to working jobs that paid only enough to pay my critical month to month bills and lenghty bouts of unemployment in that timeframe, I never paid anything on it...just used forebearance. Then a few elapsed years down the road, one or another entity would call me asking if I wanted to reconsolidate my loans....I didn't know what that really meant , other than a chance to 'kick the can down the road' , so to speak...so, over the years the balance has mushroomed and mushroomed due to at least 3 times when a guy on the phone convinced me to refinance with them...be it Direct Loans, Sally Mae or now Navient....each time , there was an apparent transfer fee, other fees I was never sure of, and maybe most damaging, the ever growing interest to the primary amount....Honestly, I kind of feel there were some unscrupulous charges added over the years that have added to the amount ballooning like it did, but I too did nothing to make any payments since I had it down to 5k right after school , because I needed every penny just to exist day to day. It's a sad story, and one that I don't honestly feel I will get paid off before I die, since I am now 52 lol. I have contacted Navient and mentioned my story to them and previous lenders who held the loan, but no on the other end of the phone has anywhere near the authority to help me or have pity on my situation, short of saying I'd have to go the 'legislative' route. Probably the worst answer one could get. lol....But, I figure by making the effort to at least do what the person above said, ...make some kind of payment, which given my other debt and the high cost of supporting oneself, will be so minimal, my only hope is forgive after 25 years , if I'm still on this planet. lol
I would like to know that as well lolol....actually though, the $5k that wasIN 1988 , when I finished college...due to working jobs that paid only enough to pay my critical month to month bills and lenghty bouts of unemployment in that timeframe, I never paid anything on it...just used forebearance. Then a few elapsed years down the road, one or another entity would call me asking if I wanted to reconsolidate my loans....I didn't know what that really meant , other than a chance to 'kick the can down the road' , so to speak...so, over the years the balance has mushroomed and mushroomed due to at least 3 times when a guy on the phone convinced me to refinance with them...be it Direct Loans, Sally Mae or now Navient....each time , there was an apparent transfer fee, other fees I was never sure of, and maybe most damaging, the ever growing interest to the primary amount....Honestly, I kind of feel there were some unscrupulous charges added over the years that have added to the amount ballooning like it did, but I too did nothing to make any payments since I had it down to 5k right after school , because I needed every penny just to exist day to day. It's a sad story, and one that I don't honestly feel I will get paid off before I die, since I am now 52 lol. I have contacted Navient and mentioned my story to them and previous lenders who held the loan, but no on the other end of the phone has anywhere near the authority to help me or have pity on my situation, short of saying I'd have to go the 'legislative' route. Probably the worst answer one could get. lol....But, I figure by making the effort to at least do what the person above said, ...make some kind of payment, which given my other debt and the high cost of supporting oneself, will be so minimal, my only hope is forgive after 25 years , if I'm still on this planet. lol
Right, 25 years or death. Whichever comes first, lol.
At this point, I would just think of it as a monthly sunk cost. Just try and get it as low as possible. But assume you'll never pay it off.
It won't affect anything. I know people who have 60-80K in student loan debt, and they are able to get car loans, and mortgages, go on vacations, etc.
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