06/21/2013 01:22 pm ET Updated Dec 06, 2017

I Work Two Jobs and Can't Afford My Debt

Huffington Post Reader Question

Dear Steve,

I have 60,000 in debt from student loans and credit cards.

I live in New York City working two jobs and I cannot afford my debt. I have deferred my loans for years and my deferment period is almost up and I don't know what to do? I can't afford the monthly payment due to interest and Salle Mae said they cannot consolidate or lower interest :(


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Dear Ali,

I hear you and completely understand. Sometimes it just feels like you are working so very hard but can never get ahead. And of course you are living in one of the more expensive metropolitan areas as well.

This is a bad news, good news story. The bad news is you are struggling with your debt. The good news is there are options.

I think this guide I wrote can be a big help to you in this situation.

Keeping your loans in forbearance or deferment can just cause the balances to increase and make the situation worse. Instead, we need to deal with it.

Just because your loans are with Sallie Mae does not mean some of them might not be eligible for some of the Department of Education consolidation and/or income based repayment programs. It's worth checking, again covered in my guide.

But the more logical process to deal with the situation if it is your credit card debt which is holding you back from making your student loan payments is to consider bankruptcy and eliminate the credit card debt.

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.

Eliminating that debt and clearing the decks to afford your regular student loan payment to eliminate your loans on the 10 year payment plan just makes more sense. On an income based repayment plan it can take up to 25 years to have your loans eliminated and any student loan debt forgiven may be taxed. Debt discharged in bankruptcy is not taxed.

Besides, if the Sallie Mae student loans are truly private student loans, there are few good options to deal with payments you can't afford with those. But, bankruptcy again can come to the rescue. A chapter 13 bankruptcy won't discharge your student loans but it can keep the collectors at bay, eliminate collection pressure and avoid additional fees and charges.

Hopefully Congress will have changed the law in the five years it takes to complete a chapter 13 bankruptcy and allow some room for income based repayment programs for private student loans or allow them to be discharged again in bankruptcy like they were up till 2005.

So as you can see, there is hope, there is help, and you do have some options.

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