I have a private Sallie Mae student loan I took out back in 2007 to pay for a vocational education in culinary arts from a school called "Kitchen Academy" (I think they got bought out by Le Cordon Bleu and now they go by the latter name)
The loan was originally for $16,000. I now owe $27,000 due to interest. I spent years not being able to pay the loan because I couldn't afford to do so. I managed to obtain jobs in the culinary field but never made more than $8/hr. I had to leave that field because I could not make a living off of jobs as a cook.
At one point in 2010 I worked two jobs one in fast-casual food and the other in retail and still only made $800/month BEFORE taxes.
I now have left the food industry completely and work a part-time grave yard shift in retail that pays me approximately $1000/mo After taxes. My husband's income provides food & shelter and with both our incomes combined we are fall under the Low-Income standard set by the Federal govt.
I am currently paying my loan and have made payments on time for a year now. Yet, only $20 out of the $200 that I pay goes to principal. I cannot afford to make extra payments on the loan as that would strain me financially since i must pay my bills. My husband unfortunately is very strained as it is financially and cannot afford to help me pay my loan. I depend completely on my husband for basic necessities like food and shelter.
I struggle every month to pay this loan. I have gone back to school part-time to study fashion design so that I can get out of retail and make enough money to afford to pay off my loan without straining. I researched this field before I decided to study it and found that certain jobs within the field can pay a comfortable wage. My goal is to get a degree so that I can work as a technical designer and finally be able to get this Sallie Mae loan off my back but it definitely wont be any time soon that I can make a decent living off of that since experience is crucial in that field and with it comes the comfortable wage.
My question is I am considering representing myself in bankruptcy and would like to know what bankruptcy chapter do I need to file for if I want to show undue hardship??
Thank you for your blog btw, its extremely useful!
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Thank you so much for the kind words and reaching out to me.
Your situation may be both easier and harder than you may assume at first. It is my experience that many of these vocational schools were not accredited and that means the private student loans could be easily discharged in bankruptcy.
People often make the assumption eliminating student loans is bankruptcy is not possible but those people are just flat out wrong. I talk about why this is in this article.
So the good news is it could be potentially easy to discharge the student loans completely but there is no way I would advise doing this without the help, coaching, or guidance of a local bankruptcy attorney who is licensed in your state.
You can click here to find a local bankruptcy attorney and talk to them for free about your specific situation. Get the facts and then you can make an informed and educated decision if bankruptcy is right for you.
There are enough local differences in the way bankruptcy courts handle cases and unusual issues and this could easily be one of those tricky issues.
While some people have managed to be skilled enough or lucky enough to take their case to a bankruptcy judge in an adversary proceeding and succeed, it's just far too easy to screw things up and lose out on your one shot to eliminate your student loan debt quickly and get a fresh start under a chapter 7 bankruptcy filing.
It's time to stop drowning and struggling and finally reach out for the legal fresh start you are entitled to under bankruptcy. Just make sure you learn from the situation and let the life lessons guide you as you move forward with a better life.
If you have a credit or debt question you'd like to ask, just click here and ask away.
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Arizona has the second worst foreclosure rate in the country, and many Arizonans also have low credit scores, according to CardRatings.com. State unemployment rate in July 2012: 8.3 percent (Labor Department).
Many Floridians are stuck in foreclosure, delinquent on their credit card debt, unemployed, bankrupt, or have low credit scores, according to CardRatings.com. State unemployment rate in July 2012: 8.8 percent (Labor Department).
Georgia is one of the worst five states in unemployment, bankruptcy rates, average credit score, and credit card delinquency rates, according to CardRatings.com. State unemployment rate in July 2012: 9.3 percent (Labor Department).
Nevada has the worst unemployment rate, personal bankruptcy rate, and average credit score in the country, according to CardRatings.com. State unemployment rate in July 2012: 12.0 percent (Labor Department).
Iowa has a lower than average unemployment rate, lower than average credit card delinquency rate, and higher than average credit score. State unemployment rate in July 2012: 5.3 percent (Labor Department).
Montana has above-average credit scores, fewer personal bankruptcies, fewer foreclosures, and less delinquent credit card debt than other states, according to CardRatings.com. State unemployment rate in July 2012: 6.4 percent (Labor Department).
South Dakota has better than average employment and credit scores, according to CardRatings.com. It also has fewer personal bankruptcies, fewer credit card delinquencies, and fewer foreclosures. State unemployment rate in June 2012: 4.4 percent (Labor Department).
Vermont was second best in the country in the foreclosure and personal bankruptcy categories and was above average in the other three categories. State unemployment rate in July 2012: 5.0 percent (Labor Department).
North Dakota "may be the best-kept secret in the country," CardRatings.com says. It was the best state in three categories, including unemployment, and fourth best in the other two, according to CardRatings.com. But remember that if you move there, you would have to live in North Dakota. State unemployment rate in July 2012: 3.0 percent (Labor Department).
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