I would really love it if you could take a look at my dilemma!!
I have been living pay check to paycheck for years now unfortunately. The job I have doesn’t pay me enough and I have physical limitations, which have prevented me from working longer shifts at work. I have bad knees from working on the concrete at my job for too long.
I decided to get a Paralegal degree on line and graduated back in 2011 but haven’t found a job that would pay me more than I make now with overtime, so I am still at my current job, where I have been for over 20 years now.
I had an accident at work this past February and and I ended up working less hours than normal (about 30 a week). I normally work 40 to 45. I filled out an incident report right after the accident, but nobody approached me to see if I was ok, or even talked to me about how to go about getting paid for the time I was missing. I had to do all of that myself. It was ridiculous. I had to contact the insurance company myself, they were given the wrong pay stubs, they didn’t pay me on time and I was cut off even because the HR coordinator told them I was working full time for a month and a half before I actually was.
Needless to say, I got behind on all of my bills. That would be rent, car, credit cards, personal medical bills, utilities, etc. It is almost the end of September and I have been working on my days off and most of my weekends off equaling 48 to 52 hours a week to try and make more money to get things caught up and there is no end in sight.
My credit rating was really improving which I was proud of and I finally had to just forget about that because I cannot keep up with paying my bills on time.
I have a $750 overdraft amount I can use at my bank, but it costs $29.00 every time I use it. We get profit sharing at work and I used that up trying to keep up on my bills after the accident when I had high hopes of paying off some bills. Once that was gone, I had to start using the over draft protection.
My account has been in the negative by $500 to $600.00 every week so there is no getting ahead for me at this point. the stress of all of this is really getting to me. I feel sick all the time because I don’t know what to do.
I have close to $60,000 in student loans still and the Federal portion has been in forbearance pretty much since I was supposed to start paying it back after graduation in 2011. I was supposed to start paying it back last month and I am already late.
My other student loan has been in forbearance many times too, and when I am in repayment, I am late a lot.
I just don’t know what to do at this point. I took out a personal loan to consolidate some debt to try and help myself but that didn’t help in the end. I got another credit card to consolidate two with higher interest and I ended up running one back up again because I have no money to live on.
I am in more debt now because of this accident and it just doesn’t seem fair that my employer has no responsibility financially aside from paying me my lost hours and paying my physical therapy and medical bills from the injury.
Apparently the workers compensation laws are for the employer and not the employee, according to the attorneys who represent injured persons. It is pretty sad. If you have any questions or if anything is unclear, I would be more than happy to give you more information.
My question is what should I do? I don’t see any way to come up with a plan to decrease my debt because my checking account is never in a positive state to do so.
Every time I pay a bill I pay a $30.00 fee. I haven’t paid on my personal doctor bills because to pay $10.00 it would cost me $40.00.
I really need some serious help here. I am drowning in debt!!
Thank you so much for giving me loads of information.
I approach debt problems on a wider view than most people do. Dealing with the debt is just a math problem but debt impacts so much of our lives. More than just the math.
For example, in your situation we have the ongoing physical limitations, stress, and looking for any hope of a way forward. Your current situation is just burying you deeper every time you have to reach into the overdraft, which is actually just another loan.
You’ve tried the consolidation route and borrowing your way out of debt. Clearly that approach has not worked for you either.
And you’ve already spoken with a work comp attorney and pursued your options there. I would agree, if you are looking for work comp to fix all the accident financially injured, you would be disappointed.
So I think we need to look at your overall situation and it sure seems like working more is not a sustainable strategy. It also seems that the stress of the situation is eroding your health as well. If something doesn’t change, this situation isn’t going to change.
The first step must be to get your federal loans off forbearance which is a temporary solution. You need to immediately get those loans into a Direct Consolidation Loan and then opt for an income driven repayment like the Income Based Repayment (IBR). The IBR is not a perfect solution but it will give you a low or $0 monthly payment that will count towards future forgiveness. For more on this, see this page.
For some people the IBR and similar programs can become a trap. Read this. But based on the situation as you describe it I don’t think a sudden increase in income is anticipated or expected.
The goal with this approach is to get you into a permanent low or no payment program and to avoid your loans going into default, 270 days late, which will explode your balances.
These programs do not apply to private student loans. But it is as advantageous to keep those loans out of default as well if possible. If it is not possible, read this.
So the math part of the situation is found in the inability to get ahead which is always keeping you down. You also don’t seem to have any emergency fund or saving account to fall back on. I would seriously doubt your retirement savings is at a level you desire as well.
So, how do we change the situation and give you a fighting chance of recovery and a new future, bankruptcy. When people file bankruptcy in similar situations as you described, they generally have their debt discharged in about 90 days. You should expect your student loans to survive the bankruptcy unless your attorney challenges the loans in an expensive process.
But here is a surprising revelation, Those That File Bankruptcy Do Better Than Those That Don’t. By filing bankruptcy and getting a fresh start you will be able to rebuild your credit and get back into a position where you can begin to save money again.
Without considering a change in the current math by increasing your income or lowering your expenses, then eliminating the debt is the most logical and least expensive way to get you hope, reduce your stress, and improve your finances.
If you have a credit or debt question you’d like to ask, just click here and ask away.