Need that real talk
Credit score went from 790 to 435. $36K in debt, underwater on a car, and considering bankruptcy at 38. What would you do?
I’m 38 and finally at the point where I’m ready to face my financial situation head-on.
For years, I had excellent credit around a 790. I had Amex cards all the way up to the Platinum/Black Card level and never thought I’d end up where I am now. Between COVID, losing jobs, business setbacks, and honestly some bad financial decisions on my part, my credit has fallen to around 435.
Here’s roughly where I stand:
About $36K in personal/business unsecured debt
A vehicle that I’m roughly $21K underwater on
Around $1,200/month going toward the car
I still work, have income and some cash
I’m supporting a family
I’m not destitute or unable to survive I just cannot seem to get ahead
I’ve looked into debt consolidation/settlement companies, but they can only work with certain accounts, and I’m starting to question whether dragging this out makes sense.
Bankruptcy keeps coming into my head, but if I’m being completely transparent, my ego is fighting it. I spent years being proud of having great credit and being financially responsible, so accepting that I may need to file bankruptcy feels like admitting defeat.
At the same time, I’m tired of throwing money at debt and watching it follow me year after year.
I also don’t want to just stop paying everything and let accounts go into collections without understanding what I’m getting myself into.
At 38, my biggest priority is getting my financial freedom back and rebuilding correctly. I know I made mistakes. I let things pile up, avoided dealing with some of it for too long, and now I’m ready to face reality and make whatever decision gives me the best long-term outcome.
For anyone who has actually been in a similar position:
Would you buckle down and try to pay/settle the $36K, let accounts go to collections and negotiate, or seriously consider bankruptcy and rebuild from there?
Especially interested in hearing from people who filed bankruptcy while they were still working and earning money. How long did it realistically take you to recover financially and rebuild your credit?
Appreciate any advice even the tough advice. I’m ready to fix this.