I Was Desperate And Got A Payday Loan

The speaker is a 34-year-old single mother of two children, who is currently over $90,000 in debt and earns about $64,000 a year from three jobs. She feels like she is drowning despite having been seriously following the baby steps for about three months. She recently discovered she is $17,000 upside down on her car loan. She owes $37,000 on her car, which has an $850 monthly payment and a 16.5% interest rate. The car is a 2014 Ford Edge, and she was quoted a maximum of $22,000 for it by dealerships, which buy at wholesale. The car loan is with Santander. Her other debts include $30,000 in student loans, $13,000 in medical debt, $6,500 owed to her grandmother, $2,200 from a payday loan, and $2,300 to lawyers for child support. Her one-year-old child has complex medical issues. She is owed $26,000 in child support arrears, which she expects to receive within ten days to a year, possibly after a trial, but she is certain she will get it. She asked if bankruptcy could be a way out. However, bankruptcy would not solve her problems because the car would only go away if it was repossessed, which can happen without bankruptcy. Student loans are not dischargeable in bankruptcy, and she would still owe her grandmother. Therefore, filing for bankruptcy would not accomplish much, as most of her debt would remain. The primary issue is the car. While dealerships offer $22,000, a private sale might yield around $28,000, still leaving her about $10,000 in debt on the car. The plan is to sell the car privately for approximately $25,000-$28,000. If the $26,000 child support arrears come in, she could use that money to cover the $10,000 difference, sell the car the next day, and free up almost $900 a month. With the remaining money, she could buy a $5,000-$6,000 car with cash. Her student loans are currently on hardship deferral, and she has been paying $50 a month. The suggestion is to put them back on full hardship deferral for six months to focus on other debts. If the child support money is not received soon, she would need to find $10,000 from another source. Borrowing from her grandmother or a credit union is not recommended due to her already poor credit, which suffered after she lost her job while pregnant and used her savings. The car is identified as the main problem, and resolving it is the way forward.