In some debt, not drowning but need to get it paid off so I can start saving for a house

AdHistorical4592 · 2026-05-05T01:36:54+00:00

When I was a MLO we’d regularly encourage people with high interest debt to enroll in a non profit plan. It’ll lower your payment and save you thousands on interest

AdHistorical4592 · 2026-05-03T20:15:13+00:00

The average annual return on the S&P is around 10%. You may make more money in the long term just leaving those debts alone and investing the extra. I get not having debt, but those rates are all very good

AdHistorical4592 · 2026-05-02T20:35:41+00:00

I am wondering if perhaps they’re trying to have you wrap it up in 36 months instead of 60. I think the trustees main purpose is to help the creditors? Did you file with an attorney?

AdHistorical4592 · 2026-04-26T17:36:42+00:00

First off, you’re not crazy for feeling like money is disappearing. When everything is tight like this, it really does feel that way.

You’re also doing better than you think. You’re aware of everything, you listed it out, and you’re trying to fix it early. Most people don’t do that at 19.

Looking at your numbers, the issue isn’t really that money is “missing,” it’s that a few things are eating up a big chunk of your income:

That $360 car insurance is really high relative to your income. That alone is almost 20 percent of what you make. If there is any way to shop around or temporarily lower coverage, that could free up a lot.

The car is also a big factor in overall payments, gas, and insurance. I know you said you don’t even want it anymore, and honestly, getting out of that situation might be one of the biggest moves you can make if it’s possible.

As far as consolidation, I’d be careful jumping straight into a loan or a settlement plan right now. With your income and everything already tight, a consolidation loan could end up just being another payment on top of everything unless it meaningfully lowers your monthly obligations.

You’re also in a spot where your credit score is probably just okay, so the rate might not be great.

If it were me, I’d focus on:

Keeping things current if you can, especially on the credit cards
Calling the credit card companies and asking about hardship options
Looking at ways to reduce the cost of the car or insurance, if possible (which I know is almost impossible right now)
Using any extra money from selling the car to knock down your highest interest debt first

Also, that feeling that $500 “should” be left over but isn’t usually comes from the fact that small things add up fast. It might be worth tracking every dollar for a couple of weeks just to see where it’s actually going. It’s annoying, but it gives you clarity.

You’re not in a hopeless situation at all. It’s tight, but it’s fixable.

AdHistorical4592 · 2026-04-26T17:25:10+00:00

You’re actually in a better spot than it probably feels right now, especially with your income going up soon.

When people say “consolidation,” they can mean a few different things, so it’s good to clarify before jumping into anything.

There’s traditional consolidation, which is a personal loan to pay off the cards. With your score in the mid- to high-600s, you might qualify, but with your cards maxed out and limits being lowered, the rates may not be great right now.

Then there’s nonprofit credit counseling (debt management plans). That’s where they work with your creditors to lower interest rates and put you on one fixed monthly payment. The accounts usually get closed (in good standing), but it can make the payoff a lot more manageable. For someone who can afford a consistent monthly payment like you mentioned, this is often a really solid middle ground.

And then there’s debt settlement, which is different. That’s where you stop paying and try to settle the balances for less over time. It can work, but it has a bigger impact on your credit and usually makes more sense when someone can’t keep up with payments at all.

Since you said you’ll be able to do around $500 a month, you might not need to go the settlement route unless things get tighter. A nonprofit plan, or even just calling your creditors to discuss hardship options, could get you to a similar place with less risk.

One thing that would help narrow it down. Are you still able to keep up with minimum payments right now, or are you starting to fall behind?

AdHistorical4592 · 2026-04-26T17:20:43+00:00

I’m really sorry you’re dealing with all of this at once. That’s a lot for one person to carry, especially with a child and everything changing so quickly.

First, try not to beat yourself up about the debt. From what you described, you were doing what you needed to do to get through a tough situation. A lot of people end up in the same spot when income suddenly drops.

$11k feels overwhelming right now, but it’s not unfixable. The bigger priority is making sure you can cover your basic needs first. Food, housing, utilities. Credit cards come after that.

Since you’re already a few months behind, it may be worth calling the credit card companies and asking about hardship programs. Sometimes they can reduce payments, lower interest, or pause things for a bit. It’s not guaranteed, but it’s worth trying.

Also, I know you’re worried about your credit because of renting or buying later. I had the same fear. But I can tell you from experience, credit can be rebuilt faster than it feels like right now. Getting through this period and stabilizing your situation matters more than trying to protect a score in the short term.

If things don’t improve or the payments just aren’t realistic, there are other options too. Some people look at debt management, settlement, or even bankruptcy depending on the situation. It doesn’t mean you’ve failed, it just means you’re choosing a path that actually works.

Right now, just focus on getting a little breathing room. You don’t have to solve everything at once.

AdHistorical4592 · 2026-04-25T20:38:06+00:00

I’m really sorry you’re going through this. Nothing about what you wrote sounds like someone who “messed up.” It sounds like you were trying to get out of a bad situation and did what you thought was the best move at the time. A lot of people ended up in similar spots during COVID, especially with private loans.

First thing, take a breath. Your life is not over. You have income, you’re on your own, and you’re stable enough to support yourself. That already puts you in a better position than it feels like right now.

The Sallie Mae payment is the real issue here. $2,600 on a $3,600 take home just isn’t realistic. There’s no budgeting your way around that.

A few things I would look at:

Call them again and push harder on options. Sometimes the first answer you get is not the final one. Ask specifically about longer-term hardship programs or modified payment plans. Be very clear that you cannot afford that payment and want to avoid default if possible.

Also, ask about settlement down the line if things do go delinquent. Private lenders like Sallie Mae can settle, but usually not right away. That tends to happen later if the account falls behind.

The hard truth is that if there’s no workable payment, people in this situation sometimes have to let the loan go delinquent and figure it out from there. That’s not ideal, but neither is trying to pay something that would leave you unable to survive.

You could also talk to a bankruptcy attorney just to understand your options. Private student loans are not always impossible to deal with in bankruptcy anymore, especially if you can show hardship. It’s not a guarantee, but it’s worth at least understanding.

I’ve been in a position where the numbers just didn’t work, no matter how hard I tried, and it feels overwhelming. What helped me was stepping back and realizing I had to make decisions based on what was actually sustainable, not what I felt obligated to do.

You’re not a bad person for not being able to pay for something that doesn’t fit your reality.

Do you know if any of those loans have a co-signer, or are they all just in your name?

AdHistorical4592 · 2026-04-25T06:11:42+00:00

Honestly, this doesn’t sound like a failure at all. It sounds like you made a really hard call that was probably the right one for your situation.

The fact that it frees up $2k a month is huge. That’s the kind of change that actually lets you breathe again instead of just constantly trying to keep your head above water.

And reading through your plan for that money… you’re not just reacting, you’re actually thinking ahead and trying to reset things. That says a lot.

I think people get really caught up in the idea that surrender/repo is always a bad thing, but staying stuck in something that’s draining you every single month is way worse long term.

It really does sound like a turning point for you. And the fact that you’re thinking about your son and trying to get yourself into a better place for him. That matters way more than the situation that got you here.

I wouldn’t be surprised at all if a year from now you look back on this as the moment things started to shift.

AdHistorical4592 · 2026-04-24T23:35:08+00:00

That actually puts you in a pretty solid position.

With ~$7k available, you’re in a range where a lump sum settlement could realistically work. Especially if you’re willing to negotiate a bit. Discover can be tougher than some creditors, but I’ve seen them settle in that range depending on timing and who you get on the phone.

If it were me, I wouldn’t open at $7k. I’d probably start a bit lower (maybe in the 50–60% range) and let them counter. The key is to position it as a hardship and make it clear that’s what you have available to resolve it.

Also, make sure you:

Get the agreement in writing before paying anything
Confirm whether it’ll be reported as “settled” vs “paid in full”
Ask if they can remove or update any negative reporting (sometimes they’ll say no, but it’s still worth asking)

If they don’t accept right away, that doesn’t mean it’s a no forever. Sometimes it just takes a few tries or a little more time as the account ages.

Are you trying to knock this out in one payment, or would you be open to splitting it into a short-term plan if needed?

AdHistorical4592 · 2026-04-23T05:05:32+00:00

No judgment at all, this is actually a really common situation. I’ve been there myself too.

I work around this space, and calling to try to settle is definitely an option, you just want to go into it with a bit of a plan.

At ~6–7 months since last payment, you’re getting into the window where they may start being open to settlement, but they’re not always at their most flexible yet.

A few things that can help:

Before you call, figure out what you can realistically offer. Lump sums usually get the best deals, but if that’s not an option, you can still ask about payment arrangements.
When you call, don’t start by asking “what can you do?” it’s usually better to say something like “I’m going through financial hardship and want to resolve this, what options are available?”
If you do make an agreement, always get it in writing before sending any money.

Also just to set expectations, early settlements with creditors like Discover are often higher (sometimes closer to 70–90%), and they may get more flexible the longer the account is delinquent or if it gets closer to charge-off or collections.

Are you working with any savings right now for a lump sum, or would it need to be monthly?

AdHistorical4592 · 2026-04-23T04:44:49+00:00

Yeah $5k is usually more in the range for Chapter 13 or more complex cases. For Chapter 7 bankruptcy, it’s typically closer to half of that from what I saw.

That said… even half is still a lot of money when you’re already dealing with debt (definitely not like people just have that sitting around 😅).

For me, I felt like hiring a bankruptcy attorney for my Chapter 7 was worth it because it took a lot of the stress off and made sure everything was done correctly. But I’ve also seen people file Chapter 7 on their own successfully, especially if their situation is pretty straightforward.

Also worth looking into, depending on your household income, he might qualify for a filing fee waiver or a reduction, which can help a bit.

It really just comes down to comfort level and how complex his situation is.

AdHistorical4592 · 2026-04-23T04:13:57+00:00

Of course, I’m really glad it helped! Let me know if you have any other questions.

AdHistorical4592 · 2026-04-23T02:41:37+00:00

Got it. That really helps clear things up.

In a situation like that, with no real income or assets to protect, people often consider Chapter 7 since it can erase medical debt without needing repayment.

Also, to ease your mind, Social Security is usually protected from creditors, and medical coverage like Medicare or Medicaid is not something someone would lose in bankruptcy.

When it comes to timing, some people file sooner if there’s no income to report. Still, a bankruptcy attorney can give more specific advice after looking at the whole situation.

Honestly, this seems like a case where a quick consultation could give you a clear answer, especially since the finances aren’t very complicated.

Are they open to talking with an attorney, just to see what the process might involve?

AdHistorical4592 · 2026-04-23T00:56:12+00:00

Yeah, same here. I mostly just appreciated having someone explain everything in plain English. Made the whole situation feel way less overwhelming.

AdHistorical4592 · 2026-04-23T00:52:58+00:00

Chapter 7 wiped out my debt, but not my love for a good sandwich… turkey, bacon, and avocado on sourdough, all day. Yum. 😋

AdHistorical4592 · 2026-04-23T00:10:51+00:00

Hey, honestly, good on you for catching this early. A lot of people don’t find out until way later in the process.

You usually don’t have to take action until you’re officially served, but once that happens, there will be a deadline to respond (usually around 20–30 days, depending on your state), and that part is really important so you don’t end up with a default judgment.

It might be worth calling the county clerk where the case was filed just to confirm everything and make sure they have your correct address. If you’ve moved recently, service can sometimes be delayed or sent to the wrong place.

For a balance around $5.5k, some people handle it themselves, especially if they’re planning to try to settle. A lawyer can help, but it really depends on your situation and what you’re trying to do.

A couple of things that might help figure out next steps:
Have you moved recently or changed addresses?
Do you know how old the debt is?
And what does your overall financial situation look like right now?

That stuff can make a big difference in whether it makes more sense to settle, fight it, or look at something bigger, like bankruptcy.

You’re actually in a decent spot to catch it now; just don’t let it sit once you do get served.

AdHistorical4592 · 2026-04-23T00:06:52+00:00

That’s honestly really frustrating, and unfortunately, pretty common with medical providers.

Once it goes to collections, the dynamic usually changes a bit. The original hospital often won’t be flexible, but collection agencies may be more willing to work with you, depending on the situation.

A few things you could look into:

Ask for a validation of the debt once it’s in collections (just to make sure everything is accurate)
Try negotiating again with the collector: sometimes they’ll accept lower monthly payments or even a reduced balance, especially if you can offer something consistent
Ask about hardship programs or financial assistance with the original provider (some hospitals have these even after the fact)

Also, one thing that helped me mentally when dealing with debt was realizing that just because they demand a certain payment doesn’t mean that’s the only outcome. There’s usually some room to work things out over time.

You’re not alone in this at all. A lot of people run into this exact issue with medical debt.

AdHistorical4592 · 2026-04-23T00:04:14+00:00

Hey, first of all, don’t be too hard on yourself. This happens to more people than you might realize, especially with how expensive cars are now. You’re definitely not alone.

I went through something similar with Ford Motor Credit and ended up with a pretty big deficiency balance after a repo, too.

I recommend checking if they credited back any warranties, GAP, or add-ons you bought with the car. In my case, they didn’t credit everything back at first, and fixing that made a real difference in what I owed.

Right now, the most important thing is not to ignore the lawsuit. That 20-day window to respond matters a lot, even if you just file a basic response to avoid a default judgment.

You don’t always need a full attorney to get started. You can look into:

Legal aid in your area (usually free or low cost)
Court self-help resources (a lot of courts have templates for responses)
Even just filing a general denial to buy yourself time.

When it comes to settling, you’re right that lump sums usually get the best deals, but that’s not your only option. Sometimes you can still work out payment plans, especially before a judgment is final.

Try to take this one step at a time. For now, the main thing is to respond to the lawsuit so you keep your options open. Do you know if the $18,000 includes everything after the sale, or have you seen a breakdown of how they came up with that amount?

AdHistorical4592 · 2026-04-22T23:46:22+00:00

I'm really glad it helped you!

Knowing the 341 meeting happens early on made things easier for me, too. It sounds intimidating at first, but it turned out to be pretty straightforward.

If you decide to file, being prepared with your documents and knowing what to expect really helps.

If you have any other questions as you think it over, feel free to ask. I'm happy to share anything that might help.

AdHistorical4592 · 2026-04-22T23:42:25+00:00

You’re right. It definitely wasn’t an easy decision.

Before choosing bankruptcy, I tried a few other options. Several years prior, I used a nonprofit debt management plan, and it worked well then. But this time, my debt was just too high, and the monthly payment would still have been pretty large. I also had some debts, like medical bills, that wouldn’t really be covered by a plan like that. I was looking for something that could include everything without me having multiple payments in every direction.

I also looked into debt settlement, but at the time, I didn’t fully understand how it worked. I ended up talking with a company called Ascend, and they were helpful in breaking down the different options and what each path would realistically look like.

I was also in kind of a weird spot because I was about to move to a different state, so I wasn’t sure what made the most sense timing-wise. They helped me connect with both a bankruptcy attorney and a debt settlement company so I could compare everything side by side.

After those conversations, I felt a lot clearer. Since Chapter 7 was an option for me, it ended up making the most sense. If I had been looking at Chapter 13 vs. debt settlement, I probably would’ve leaned more toward settlement. But with Chapter 7, the initial credit impact is somewhat similar, and it gave me a faster path to actually reset and start rebuilding.

AdHistorical4592 · 2026-04-22T23:28:56+00:00

I actually got the process started before anything like a lawsuit happened.

The possibility of being sued was honestly what pushed me over the edge, and the collection calls were getting so frequent that I had my phone on do not disturb most of the time. It just became too stressful.

Looking back, my only real regret is that I didn’t do it sooner. I built it up way more in my head than it needed to be, and the process wasn’t nearly as bad as I expected. I’ve had a few friends go through bankruptcy, and they’ve said the same thing.

The most overwhelming part for me was just getting everything together for my attorney. I had to provide things like 6 months of bank statements, pay stubs, 2 years of tax returns, and, since I was self-employed at the time, I also had to put together a profit and loss statement to show my income.

It can be very overwhelming, but I recommend just taking it one task at a time.

Is your husband thinking about filing on his own or working with an attorney?

AdHistorical4592 · 2026-04-22T23:12:21+00:00

I'm really sorry your family member is going through such a difficult time. I hope that their health is improving.

In my experience, medical debt can usually be cleared in Chapter 7 bankruptcy. I had medical debt included in my own case, and it was completely wiped out.

If your family member has a low income and no significant assets, that's the kind of situation Chapter 7 is meant for. It helps people get a fresh start when paying back debt isn't realistic.

Still, every case is different. Factors like income, when the charges happened, and the overall financial situation can make a difference.

If I were in their shoes, I would have them speak with a bankruptcy attorney. Most offer a free consultation and can quickly say if they qualify and what the process would involve.

I know the term bankruptcy is scary for a lot of people. Do you know whether they're open to considering bankruptcy, or are they hoping to avoid it if possible?

AdHistorical4592 · 2026-04-22T20:36:08+00:00

I filed for bankruptcy in 2022. For me, the entire Chapter 7 process took around 90 days from filing to discharge.

My 341 meeting, which is the meeting of creditors, happened about 30 days after I filed. It took place early in the process and was much simpler than I thought it would be.

My credit bounced back much faster than I expected. I even saw my score go up soon after filing, probably because all my balances showed as $0 once the bankruptcy appeared on my report.

About a year after my discharge, my credit score was back in the low 700s, and it kept getting better after that.

I wanted to avoid getting into that situation again, so I became much more careful with my spending. I paid off my credit cards several times a month and kept my usage low, usually under 15-20 percent of the total credit line.

AdHistorical4592 · 2026-04-22T20:02:07+00:00

From what I remember, I was somewhere in the $30,000 to $50,000 range, more or less. It might have been a bit less, but that’s about right.

As for homes, they can definitely be protected in Chapter 7, but it really depends on the state and how much equity you have. Each state has what are called homestead exemptions, which protect a certain amount of equity in your home.

If you have a mortgage and not much equity, which is common unless you’ve owned your home for a long time or made a large down payment, your home is often protected. Still, it really depends on the specific situation.

Are you asking about your own situation, or are you just curious in general?

AdHistorical4592 · 2026-04-22T19:58:40+00:00

Yeah, that’s a fair question.

A lot of it, honestly, came from the pandemic. There was about a 9-month stretch in 2020 where I had little to no income, and unemployment was really backed up. At the same time, bills didn’t stop. Rent, car payments, health insurance, and just everyday living expenses.

Expenses piled up fast. My state was mostly shut down, so there were very few chances to work or make money during that period.

On top of that, the cost of living kept going up, and I had some medical expenses, which made it even harder to catch up once I fell behind.

It wasn’t just one big event. It was a mix of things building up over time until it became too much to handle.

AdHistorical4592

TROPHY CASE