Hitting rock bottom and softening the blow

Harmless_Venom
Harmless_Venom

Hey Veeky Forums

Long story short , I failed. I went from a ~730 credit score to 620 and falling. I have been ass blasted by an insane debt payment to income ratio for a few months of being unemployed, and the job I found is not even covering a third of what I owe in total each month. I come from a poor family so there's no options there. By this month's end I will be unable to pay my bills.

What can I do to make this easier on myself? I'm looking for a second job but seeing as how I'm only just finishing up an associate degree (paid for, part of why I'm in such debt), even two jobs would not cover it. Is there anything I can do to lighten the burden I'm inevitably going to bear because of this? I owe in excess of 30k and I've never even held a job that paid 30k a year.

Any tips/advice appreciated. Can anyone with bankruptcy experience give me the lowdown?

Pic related

SniperWish
SniperWish

@Harmless_Venom
More loans

ZeroReborn
ZeroReborn

@Harmless_Venom
Bankruptcy. It happens to everyone. Go talk to a bankruptcy lawyer and explain your case, they have heard it all a million times. You are going to be fine if you do this. They understand what happens and deal with it on a daily basis.

RavySnake
RavySnake

@ZeroReborn
Thanks for the reply. Im 24, how badly will bankruptcy on my record affect getting a job in a few years when I graduate? That's the biggest stressor

RumChicken
RumChicken

@RavySnake
my dad is a tattooist and owned 2 shops. he went bankrupt a couple years ago because his alcohol bill outweighed his income. I australia a bankruptcy last for about 4 years during which your not allowed to open a new business or take out any loans. i think also if you make over a certain amount during that time you have to pay the excess to the government or a bank, not sure which

VisualMaster
VisualMaster

@RumChicken
in australia* a bankruptcy lasts*

Garbage Can Lid
Garbage Can Lid

@RavySnake
In America, even if you have a bankruptcy on file, people will hire you. People understand that this stuff happens. Unless you are in Australia. Then you're going to get eaten by giant spiders.

SomethingNew
SomethingNew

@Garbage Can Lid
I see. I'm majoring in finance so I thought, perhaps wrongly, that field of work may be especially hard on people with that kind of ding on their credit. Again, appreciate the replies.

I'm in America for the record.

Evil_kitten
Evil_kitten

@SomethingNew
@SomethingNew
I'm majoring in finance so I thought, perhaps wrongly, that field of work may be especially hard on people with that kind of ding on their credit.

Coming from an outsiders perspective, I think your gut instinct might be right. Work your ass off for a year and try to pay it off without going into bankruptcy. If you get a job paying $10/ hour, you just have to work 8.5 hours a day to go back in the black. You'll be fine.

cum2soon
cum2soon

Student loan debt? You should be able to work with the lender to reduce the payments. And it's not dischargeable in bankruptcy anyway

Playboyize
Playboyize

Develop a Trump persona. Start using a trench coat. Convince your bank you're to yuuge to fail. Let them bail you out. Don't smile when they do--- do the grave eye squint thing he does and the grimace.

PackManBrainlure
PackManBrainlure

@Harmless_Venom
Can anyone with bankruptcy experience give me the lowdown?

I've got some experience with bankruptcy, unfortunately. The chapter 7 variety.

A few general things - first off consultations are free, hit up the local phone book. They're not going to tell you a whole lot there because they just want you to file so they can get paid. They will however let you know (after filling out a free questionnaire) if you're eligible to file.

Past that, get ready to do most of the work yourself. You can start right now by ordering all 3 of your credit reports via regular mail (important, make sure it's regular mail NOT online). From what I can remember off hand it goes something like:
Pay attorney, some take payments (around $1200 out the door)
Request copy of credit report via mail - NOT online
Contact every single creditor and ask for the current balance and confirm their contact info (writing all of this down obviously)
Catch up on all taxes including unfiled returns
Copies of tax returns going back 2 or 3 years (1040's and state), bank statements (for every acct you have), current printouts of 401K/IRA accts, pay stubs, ID and social card, detailed listing of all assets including cars, homes etc down to personal belongings
Take all that to attorney
They'll call you back in a week or so and you come in to sign the actual petition to be filed in court
Month or so later you'll go to what's called a 'meeting of creditors' and they question you under oath about debts, verify you're poor (hardest part btw)
Month or two after that they either discharge your debts (things go okay and you're out of debt) or they dismiss your bankruptcy and you're still on the hook (unlikely unless you blatantly lie)

It's one of the hardest things you're ever going to go through, up there with death of a loved one/divorce.

Mine was less than 2 years ago. I have since opened three credit cards, car loan (paid off already) and my credit score is a 700.

Emberburn
Emberburn

@PackManBrainlure
Oh and as far as how it impacts you life, home purchase mainly. Min 3 year wait for FHA, 4 (or 5 can't remember) year wait on conventional mortgage after discharge.

Most importantly, student loan debt is NOT discharged. Only consumer debt (mortgages, credit cards, personal loans, car loans etc).

So there you go. A one off non-shitpost on here from me. You're welcome.

TreeEater
TreeEater

@PackManBrainlure
@Emberburn
Much appreciated. Really good to read that you're on the other side of it positively.

I unfortunately still live with parents, is that a factor in the "proving I'm poor" bit?

I have 0 student debt, have actually paid off all of the one loan I took so far. What kind of questions do they ask about the debt?

@Evil_kitten
Specifically, my debt totals at $39403.91.
Monthly payments are high, because of high utilization obviously. Upwards of at least 1200 a month to satisfy minimums. I don't think one minimum wage job would do it, I have a slightly above minimum wage job right now that I'm working to get another shift in.

Ignoramus
Ignoramus

@TreeEater
Bankruptcy is the only option you have.

Put it this way. "If i didn't have any debt, how long would it take me to save up 40,000 dollars?"

The answer is "approximately forever" therefore you're bankrupt.

Deadlyinx
Deadlyinx

Any ideas on what I can do with a car loan I co-signed that's not being paid on time (besides paying it myself)? It's fucking my credit score. I know I shouldn't have cosigned. Could I pay a lawyer to get it off my credit?

Methnerd
Methnerd

@TreeEater
Yeah.. 40,000 is definitely worth bankruptcy for you. What are the debts? Are they legit? Can they even be discharged in bankruptcy? How the hell do have that much debt without student loans?

Please write your answers in the space provided.

Evilember
Evilember

@Methnerd
Legit in what sense? Nothing illegal if that is what you mean.

Basically I spent on credit a fair amount, but I also had a lucky job that payed very well and I was working a lot of overtime. I had racked up debt but then lost that job, took a little to get a new job, that paid way less.

This basically happened twice over the past 4 years. It was a snowball. I also paid for A LOT of school on my credit cards. That is a fair portion of it all. At this point, a pretty good part of it is finance charges racked up over times of unemployment + jobs with shit pay.

Flameblow
Flameblow

@Evilember
Bankruptcy.

TalkBomber
TalkBomber

@Methnerd
In those periods of being unemployed I'd take out a personal loan (so twice). This was a bad idea, although it saved me from late payments/missed payments. I was so focused on not missing a payment and keeping my credit score that I lost sight of the further future

RavySnake
RavySnake

@Flameblow
I'm going to spend a week or so reading up on it and fully understanding it. Although the average lawyer fee isn't even feasible for me at this point

BinaryMan
BinaryMan

@TreeEater
What kind of questions do they ask about the debt?

General questions for the most part. Some may be specific to your situation/debts.
How did you rack up the debt?
What life circumstances led to it?
How much do you owe to X creditor and what are the charges for?

Things like that. Figure it lasting 15-20mins, not a very drawn out thing. It's hard in the emotional sense. I walked in there thinking it was going to be a cake walk and I could finally be done with it. Turns out, admitting you're financially retarded under oath is not easy. Expect a major blow to your pride and to walk out humbled, feeling like shit. Worth it though for the relief of being free of it once and for all. Plus legally no one can harass you any more for it or you can sue them.

@Deadlyinx
Pay it yourself and learn from it. You can't pay a lawyer to correct your own poor judgement.

BlogWobbles
BlogWobbles

@TreeEater
Specifically, my debt totals at $39403.91.
Pardon my French, but how in the literal fuck does a 24 year old with only a short income disruption accumulate $40,000 in debt? There's clearly something more going on here that just "a few months of being unemployed."

BTW, this highlights why you have an emergency fund. More people who don't spend insanely beyond their means like you, an emergency fund would have smoothed over the income interruption and you wouldn't have to be considering bankruptcy.

Sorry to be harsh, but this is a teachable moment for Veeky Forums.

massdebater
massdebater

@BlogWobbles
Yeah. High spending when I had a particularly good job (for my education anyway). Too much on credit spending. Only minimum payments made. Finance charges stretched out over the period of years and more poor spending lead to this. I realize I'm only a victim of my stupidity

Firespawn
Firespawn

@massdebater
I'm only a victim of my stupidity
I'll applaud your honesty even as I shake my head at your stupidity. I hope it works out for you eventually, and I hope more than one user on this board learns from your cautionary tale.

CouchChiller
CouchChiller

@TreeEater
using a credit card to weather unemployment period
omfg why do people do this?

AwesomeTucker
AwesomeTucker

@BlogWobbles
BTW, this highlights why you have an emergency fund.
i have been trying to explain this to my parents and failed utterly. they spend everything that comes in and some more. basically constantly ask for money because they have "unexpected" medical bills. what can't you expect on medical bills over 60?? the fuck is wrong with their head? they are buying luxury items i would never in a hundred years consider like anitque looking clocks that even tho modern made still cost 1000 times more than you should spend on fucking wallclocks. shit is insane. they are also pouring a lot of money into this "bio" meme. all kinds of shaky expensive foodstuff that they don't need but is "healthy" at least in this year.

i fucking want to disown them sometimes.

Stark_Naked
Stark_Naked

@AwesomeTucker
it's rage inducing but they really did come from a different generation. we grew up under a shit economy and shit job market riddled with debt and depressed wages, so all that shit sounds stupid to us. they grew up on easy street and think the economy will recover and they'll just be fine again, so they don't see any reason to change. it would be in their best interests if they did though.

Poker_Star
Poker_Star

@Stark_Naked
i was telling them they are living in a golden age the should save for winter.
i was telling them they are living in an overly expensive house they should sell move into a cheaper one and invest the difference.
i was telling them their pensions won't keep their value it can't they are the most numerous generation raising taxes will only result in more tax avoidance.

no use they don't understand this investing thing seems risky for them. they don't understand they are living above their means when they could easily live below them. my fucking head nearly exploded.

Fried_Sushi
Fried_Sushi

@Stark_Naked
they really did come from a different generation
I'd be careful painting with too broad a brush. While there are many in that generation with poor personal finance skills due to the times, there are also many with highly-disciplined and (almost too) conservative approach to spending. The more recent generations (Millennials specifically) have been much worse about saving that the older folks ever were.

Bottom line: there's no excuse for bad habits, including age.

GoogleCat
GoogleCat

@TreeEater
I unfortunately still live with parents, is that a factor in the "proving I'm poor" bit?

No. Your attorney will make sure you qualify to file to begin with. By proving you're poor I meant they'll verify the debts and information you provided under oath. Verifying you're poor essentially.

@CouchChiller
In all fairness - If your life were under a microscope, I'm sure we'd hear all kinds of stupid decisions you've made at one point or another. Be it financial decisions, career choices, women.. It happens.

I agree though living with your parents and somehow incurring that kind of debt is crazy.

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