Personal loan to consolidate my debt or declare bankruptcy?
Okay first things first, I have an apartment and I really don’t want to lose it nor the stuff that is in my apartment, I am just at a point in life right now that isn’t good.
I got cut back on my hours at work and I’m only pulling in about 1300.00 dollars a month now, I was making more than double that. It’s horrible and very upsetting.
I have 27,900.00 worth of debt and this is a combination of a car loan, health loans and credit cards.
I went to capital one and was going to fill out an application for a personal loan but they said it was by invitation only. The interest rate on CitiBank is too high. I really would like some advice, I know Bankruptcy is a low trashy way to get out of the debt I created but I was making more than this.
Mind you I am 21 years old and by the time I’m 28 I’d have it off my record. So what do you think I should do and please do not recommend one of them prosper or other sites where people bid on your debt, I am not looking to get into that I just want a personal loan with a low interest rate.
I have wonderful credit 750 and I always make my payments on time, it’s just now I’m really starting to dig into my checking account and I’m getting worried with how fast it is diminishing.
Also I have been filling out applications everywhere for a second job but no one seems to be hiring with this economy the way it is!
Bessie
January 30th, 2009 at 12:16 pm
I would get a low interest loan. I would try to find another job. You are deep in debt for your level of earning power. I can’t see you working this off without getting either a better job or an additional job.
February 1st, 2009 at 8:07 am
Taking out a personal loan is a lot better if you can afford it, than declaring bankruptcy. Look at other banks or if you can, local credit unions, they usually have better interest rates.
February 1st, 2009 at 4:51 pm
I think you want to avoid bankruptcy no matter what.
I’ve seen people who claimed bankruptcy over student loans (when that was still an option). Tell you what. Most of those people say they regret it.
Bankruptcy will affect your life for the worse for a long time.
February 4th, 2009 at 6:07 pm
Didn’t even read your post thoroughly, but without question a loan is much much more of a better option!
Bankruptcy is an absolute last resort and should never be considered unless you are on the verge of losing some of the most basic requirements of life like you home or you have absolutely no options other than to not eat (meaning you’ve sold off everything you own and still can’t keep up). After 7 years the bankruptcy will be off your record, but then you need to start over again at that time. It’s not as simple as it disappearing completely.
If you can’t get a consolidation loan, you need to create a strategy to pay down your debts. Google search “DEBT SNOWBALL”. This is the best and most widely used debt management/reduction strategy on the planet. It’s promoted by almost any reputable debt company and by “guru’s” like Dave Ramsey, Richard Kiyosaki and more.
Here’s basically how it works:
Do a budget to free up cashflow. Cut out ALL unnessessary expenses. Find second jobs, whatever you can to free up cashflow and give you extra money to put towards the debt.
Take that extra money and apply it to the smallest debt (which is ussually the highest interest rate…if there are 2 debts close to the same, take the highest rate first).
When the first debt is paid off take the entire amount (extra money, plus whatever the monthly payment was) and add it to the next smallest debts payments.
Continue carrying the monthly payments from the paid off debts to the next debt until all the debts are gone. As each debt gets paid off, you will be accellerating the payments on the next debt becuase the additional payments will get bigger and bigger…like a snowball rolling down a hill (hence the name).
February 6th, 2009 at 12:10 pm
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