dmb911

Yes, another dummy who is in debt up to his eyeballs with no way of making minimum payments. Key and Teri loans, currently unemployed but soon to change however.. no huge income. Loans are in good standing (deferrment), credit rating is decent(unknown beacon, but last i checked was middle of the road) and have a co-signer on all loans.
What are my options as far as consolidation/bankruptcy, etc?
I'm not looking for ridicule from those who who are already going to tell me what i know, though I am in more debt than I can mange, I have many many things to be proud of in my life. Just looking for advice, expertise, experience.
Not a home owner, all credit cards are paid off, car is paid for, and current lease is tolerable to say the least. What would you do? I'm starting to get mentally bogged down by it. Thank you for any constructive advice.

usmc-sgt

I am financially sound, however I am no expert so I will keep what I do know short and sweet and leave room for the experts to chime in.

-You say that your car is paid for? Is it a nice car? Sell it for the most money you can get for it and seek alternate means of transportation whether that be a bus pass or a 1200 dollar car that will get you from A to B

-Your lease is manageable? If possible I would get out of that lease and downsize into the bare minimum that you can live in, possibly a studio or something along those lines, you will find that you can save a few hundred per month to go towards your payments

-Use your debit card for EVERY single purchase for one month and then look at your statement and analyze it. Where are you spending too much money, where can you scrimp and cut corners?

-Once you know where you are spending too much money, make a budget that is bare bones, literally just enough to get by. Spend cash only..nothing else, only cash and use this as an example.

Do you spend 200 on food per month for example? Put 200 cash in an envelope
Do you spend 200 on gas in a month? Put 200 cash in an envelope
:Misc expenses 100..put it in an envelope

What that will do is make you accountable for your spending. When you are out of cash in your food envelope then it looks like you are not going to eat and it will be a good wake up call that on the night you had steak you should have had ramen. Once you know what your inflow and outflow is come up with a realistic amount of money that can go into the bank per month as savings and start paying down those loans.

There are a few more tips and tricks but these are the better ones which I know. You may think you spend nothing, however might be surprised when you actually find out where your money is going

I will not lie, life will suck for a while until you start to make headway on these loans but it certainly beats the bankruptcy route and will make you a stronger person in the long run.

I wish you luck...let me know if you have any questions

LAfrequentflyer

Join the military. Get your debt paid down / off. Learn a back-up / follow-on trade and move on after 4 - 6 years if you don't like it.

BTW, what is your debt and monthly payment?

-LAFF

dmb911

You guys make valid points, both too life changing and as I said before, not currently employed but soon will be. Money management, not a huge issue, but the extra 50-100$ a month is not enough of a difference, my question was mostly regarding consolidation and/or bankruptcy. However, I appreciate the advice, but the military and ramen noodles are not an option.

navyman_tx

Win the Lottery! Just kidding. I know that it must suck to be in that position. I have been broke before for a while and it was miserable.

I would look into the companies that gave you the loans and i would be honest with them. There is a slight possibility that they could work something out with you. Maybe ask them if they could work out a repayment schedule and drop the interest rate for a while until you can get stable again.

Good luck!

FlyerJosh

Take the time to call your creditors and explain the situtation. Most places are willing to offer extended payment or lower your payments, provided that you CALL THEM before you start to fall behind. Almost every creditor out there has a department dedicated to coming to some sort of agreement between the parties.

If they are unwilling to help out, then I'd suggest talking to a bankruptcy lawyer.

dmb911

So, you're suggesting I call my creditors and see if they'll cut my payment/interest and what not? Sounds good, and i'll definetly give it a try. Has anyone had a lot of success with this? Has anyone been through a bankruptcy?

FlyerJosh

I have a friend that did the BK thing in the past... I'd say that if you can avoid it, do so... it will impact your credit rating for quite some time. If you are up to date now and just struggling, call your creditors (loans, credit cards, whatever) and try to see if you can't get payments cut in half or interest rates reduced.

An alternative is to see if there are consolidation options available for student loans... if you have loans that are shorter term, it might be worth looking into taking out a consolidation loan over a longer term. The rate might be higher and you will certainly pay more over the course, but it might ease things now...

Nightflyer

I think you want the easy way out, and I'm not buying it.

You say all the loans are in good standing, but you want to declare bankruptcy. I don't think that will work.

You say the loans are cosigned. If you don't pay them, they will go after your cosigners. You gonna let your parents (or whoever) clean up your mess? That's real mature.

You say ramen noodles aren't going to work for you. Well, I'm sorry, but if they were good enough for me, they are good enough for you.

I think you need to listen to Dave Ramsey or someone like that, and figure out how to live up to your own personal responsibilities. You are the kind of person who makes interest rates high for the rest of us.

I was in debt up to my eyeballs when I graduated from college. In 5 years I had it all paid off. You can do it too, if you want to.

One more thing, bankruptcy will stay with you for 7 years. That's 7 years of no credit and cash only. You sure you want to do that? Congress also recently changed the law to make it harder to declare bankruptcy. You may not even qualify. If you decide to do it anyway, you will need to consult a bankruptcy lawyer, and they will take their pound of flesh as well.

My advice, suck it up and pay the piper.

Good luck.

dmb911

I'm not looking for an easy way out, if that were the case i would have never began flight training. My current loan payments are 1300+ a month. Every credit card I have is paid off. My loans are in good standing i.e. Deferrment. What I'm trying to find out is who has experience with consolidation/lowering of payments,etc. Bankruptcy I feel, and have always felt, and should always be, a very last resort. Just looking for a knowledgable insight. These forums seem to be full of ridicule. Those of you who choose to judge me solely on the basis of my financial situation(you have more than you fair right to) but are not at the least bit constructive to my act of gaining information. I'm probably in the majority of those who have student loans gaining massive amounts of interest by the minute and are looking for reasonable ways to pay it back which is what i WANT to do. 1300$ amonth is more than most people under the age (in my region) of 40 pay for a home, much less student loans. Paying back loans is a responsibility, so is brushing your teeth, certain things take higher priorities and i understand this concept seemingly better than some giving responses. Ramen noodles and military are approaches to the problem but for some that works, for some it doesn't. I know several (3+) pilots, CFI's, FO's and the like that have gone the bankruptcy route (my GF included) that seemed to solve the issue. My contribution to higher interest rates is ridiculous outlook and if taking that approach I hope to see everyone feeling this way guarding the border of Mexico/USA on their everyday off if you feel that strongly about it. Just want some advice on those with experience and ways out of the debt, detailed as much as possible. 2500$ monthly income, plus insurence, rent,food,gas,utilities,and including 1300$ for a student loan is all but impossible, maybe there are a few exceptions but that word speaks for itself. There is no going back on the debt, only a way to fix it for the future... Any more suggestions?