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I racked up about 40K in medical and credit card bills in 2017, and was about to chapter 7 it. Then my brother passed away and I stand to inherit about 40K.
I owe 15K on my truck and 10K on student loans, but if I pay those off, I will likely have to go chapter 13 instead.
I'm wondering if credit or debt counseling like Greenpath would make more sense than a chapter 13 and wonder if anyone has any experience with those debt relief companies.
Forgot to mention that I make roughly 41K, so not a lot. After taxes, it's about $1200 per paycheck. Rent in Nashville is $1000 as it is, plus all my other expenses.
right now the truck is $400 per month, Student Loan payments are $100, drugs I take for all my medical issues that got me in debt in the first place are about $250 per month. Insurance on my truck is 120, electric is between 40 and 150 per month, water is around 40.
It all adds up and I need to form some sort of coherent strategy to get rid of the debt without getting behind on any bills.
There are reputable consumer credit counseling services out there and your state has their names.
What is your state?
OThers are scammers. Be careful.
We never checked them out but had a great experience 20+ years ago slowly paying off our bills. We sent one check to them, they paid the bills. They got the interest down. We've bought 2 homes ever since, it's not on our credit. Good luck.
I haven't used one of those credit counselors myself, but had an auto mechanic tell me that the one he used changed his financial life for the better. So do some homework before you contact anyone, but yes, they can apparently be a big help. You don't have to do what they tell you, but all those questions you're asking and not sure of the answers, they will be.
Do not use any of the so-called credit or debt relief counselors that advertise on TV or radio. They will cost you money, do nothing and leave you in the same position with less money. Check here for reputable counselors. https://www.nfcc.org/
I would use the $40K to establish a plan for paying off the debts. You owe $65K, and I think it would be foolish to go bankrupt for $25K. You may be able to establish a payment plan for the medical bills. You need to determine if you qualify for any of the available plans for paying off student loans. The truck payment either has to be made or sell it and pay cash for a beater. Credit cards have minimums that you must meet.
You've got $40,000 in debt and $40,000 coming in. Why do you need to file bankruptcy? Just pay the debt all off and use self discipline to never borrow money again.
You've got $40,000 in debt and $40,000 coming in. Why do you need to file bankruptcy? Just pay the debt all off and use self discipline to never borrow money again.
The inheritance is a "one time" thing. Look at the most expensive debt that way. Yes you had bad luck but that wasn't all of it. As for which debt to pay off first, consider which is costing you most. Pay that off with your windfall; maybe the medical and the cc debts? What about the interest rate on the truck? Sell the truck, pay off that loan, buy a less expensive vehicle with cash. There are lots out there. Voila, you just got rid of the big ones; medical, cc, and truck. The student loan interest is probably much lower than the others. If your lifestyle isn't sustainable change it. Find out what drove your cc debt up so high and make adjustments (you'll probably see them as unpleasant sacrifices, but they are probably necessary) so you don't end up in the same place again. BK will follow you for a log time.
Last edited by Parnassia; 11-27-2018 at 12:48 PM..
I'd rather use my inheritance to at least get my tuck paid for so I don't have to worry about having a vehicle.
You need a vehicle, yes. But do you truly NEED a truck? A truck costs a lot more than an economy-model car. Purchased new, the average pickup truck costs more than you earn in a year. Too many Americans wind up in poor financial shape because they repeatedly overspend on vehicles. They drive what they want, not what they truly need and can actually afford, and it comes at the expense of their savings. There's no point in driving a Chevy Silverado if a Honda Civic will do.
Obviously I don't know what you do for a living or how you're using your truck, so what I say may not be relevant. Maybe you're one of the minority of purchasers out there who actually needs a truck. But it's something to think about for the future.
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