Writing this article may certainly disqualify me from submitting future articles to Yahoo!Finance offering any financial advice to readers. There was much trepidation to overcome before I got the nerve to write this type article. However, if I save just one financially distressed citizen from committing suicide because of your enormous debts, then my pride will have to take a back seat.
Book Sense vs. Common Sense!
How could I have been so financially stupid after earning three degrees? I even completed a college course in Finance as an undergraduate student. Ironically, one of my part-time jobs in college was to place credit card tear-outs all over campus for students to apply. Yet, I got suckered by the “Greed Bug”.
The “Greed Bug” does not look like a roach or spider, but has the venom of ten Black Widow spiders when it bites you. The bite first begins with the lure of quick credit card approvals for college students. All I needed to do was send a copy of my student id with the credit card applications to get approved. I was approved for more than five credit cards when I was a freshman. I thought that paying back those debts would be easy since it would be three more years before I graduated, and my projected earnings in my major was estimated at about $60,000 a year(I Thought).
Fast Forward: To 1991: I graduated from college, and thought the world owed me everything! I owed more than $100,000 in student loans, and more than $3,000 in credit card and financial services debts. No problem, I thoughtΓÇªI would just get a good job, and pay my creditors off within a year or two with the high salary I thought that I would be earning.
Then the Recession of 2009 hit like a tornado! Employment rejection letters began accumulating like the interest on my student loans debts. I needed an income badly, so I adjusted my pride and began substitute teaching. My first paycheck was less than $200!
Additionally, one year later, my student loan debts became due. I was only making $48 a day as a sub. I basically ignored my credit card debts for years because creditors could not lock me up for bad debts, only bad checks.
Fast Forward—To 2010: I could no longer dodge creditors in the mail or over the phone. The school district I worked for also knew of my pathetic credit issues because they were contacted by my creditors. I had to rely on food stamps during the summer when school was in recess, and I even lived in Section 8(HUD housing program). Regardless of my three degrees, no corporate employer would hire me after they did a background credit check on me.
I could not borrow from Peter to pay Paul because Peter was broke too. I walked to the phone, and called Legal Services. It took me more than two weeks to gather up all my debts, and get three credit reports from all three major credit reporting agencies. I took copies of all of my assets (which only consisted of a used car worth $500 and some worn clothing), and all the paperwork requested to a Legal Services bankruptcy lawyer. It took nearly a year before my debts were discharged in a Chapter 7, but it was all worth it.
Many bankruptcy lawyers such as san diego bankruptcy lawyer contacted me before I filed Chapter 7, but most of them wanted at least $800 to file bankruptcy for me. Always try to go to Legal Services first (income-eligible clients); but if you have to pay $800 to get rid of more than $20,000 in debts, then so be it. Your credit is already messed up, so put away your false pride, and put away the gun. But I realized, the service of bankruptcy lawyers is really helpful specially in trying times like this where your debt is growing and you no longer know what to do.
Student loans cannot be discharged in bankruptcy! Try to keep student loans in deferment until you can begin making consistent payments after you get a great job, or win the lottery. I discovered from my attorney that the government can extract student loan payments from your Social Security earnings. Since 2010, I have only used one debit card, and refuse any credit card or car loan offers. My credit is being repaired slowly, but I do sleep at night. This too shall pass.