Bad Debt and Depression

kylebellamy · #1 (**permalink**) 07-23-2007, 11:48 AM

About 2 years ago, I was diagnosed with having sever depression due to chemical imbalances, something that is sort of treatable but had allowed me to make some very bad choices in the past resulting in non payed student loans and other credit issues.

I've been told by various collection agencies that this is not something that I can use as any sort of defense. I'm not suggesting that I want to have the loans vanish, nothing of the sort. I owe the money and am repaying it.

The problem is that my credit rating is so shot that I am barely considered acceptable by high risk lenders at outrageous rates. I had to beg others to help me get a car, for instance.

I consider the problems I have a direct result of a debilitating condition that went untreated during the time when the problems occurred and since I have been getting treatment, I have been making regular payments and trying to get things back where they belong. Eating a lot of very cheap soup too. lol

Are there any options open to me? Granted, bankruptcy won't help the credit problem but I really need to do things like refinance my home to pay of some of the smaller bills and cards and the like and I'm looking at rates that will make the new payment much larger than it is and still have to eat the cheap soup in the end.

The student loans are in "repair" status so I can't mess with those until I pay the 10 months without problem at which point I can refinance them into one loan with a much lowered payment.

Any thoughts?

Dru · #2 (**permalink**) 07-23-2007, 01:59 PM

Sounds like you have painted yourself into a corner. While bankruptcy is never a good choice, sometimes it is the best or only choice. If you can stay out, congratulations, but know it is there for a specific purpose, ie: a fresh start from a no win situation.

You mentioned eating lots of soup and struggling along. As long as you are making forward progress I would say to continue the course. Can you add hours at work or pick up a second job? This will not shorten the period until you have some relief with student loans but it will ensure you make the payments on time and qualify for the consolidation. It may also help you with some of the other debt. If you do these things and work hard for a couple of years, you will see your FICO score improve and your chance to refinance your home at a reasonable rate will improve as well.

Unfortunately, until you can prove you have turned things around, no one will want to give you cheap credit.

kylebellamy · #3 (**permalink**) 07-23-2007, 02:31 PM

I do have a second job so that is helping. I was just wondering if anyone had been through the same thing before me.

I've run into the fact that many people don't even believe that depression is really such a huge problem but it does change the way you view everything.

Well, I'll keep everyone posted if I learn anything new about this.

Mynion · #4 (**permalink**) 07-24-2007, 01:56 AM

It's good to see that you're on the road to recovery and I wish you all the best moving forward.

Also, it sounds like you are on the right course. Pay off unsecured debt as quickly as possible, and go to the library and read up on how to repair your credit. There are some good books on the topic and you can learn what activities will help build positive credit (e.g. paying bills on time).

Wish you all the best!

Chris

kylebellamy · #5 (**permalink**) 07-24-2007, 09:29 AM

Thanks for that. It's a rough road to say the least but I cannot stress enough to any of you out there who do feel depressed: Got talk to your doctor. Depression is not a rare thing and it can be fought!!!!

tater03 · #6 (**permalink**) 07-24-2007, 01:42 PM

I have not had depression but I can understand how it can effect the way you look at everything including your finances. I would have to agree that you are on the right track and the more you pay off and pay every month the faster your credit rating should go up. Good luck and keep us posted.

katharina · #7 (**permalink**) 07-26-2007, 06:19 PM

Quote:

Originally Posted by kylebellamy

Thanks for that. It's a rough road to say the least but I cannot stress enough to any of you out there who do feel depressed: Got talk to your doctor. Depression is not a rare thing and it can be fought!!!!

I hope you can continue to fight that monster with your doctor's help! And good for you for knowing what you had to do. About your original question... well, I'd *think* that keeping on the path to paying your debts would feel a lot better emotionally than trying to do the bankruptcy thing. (Which you already said you were doing, so I'm agreeing). Just something to chew over while making a decision.

kylebellamy · #8 (**permalink**) 07-30-2007, 10:21 AM

The truth about depression is that circumstance doesn't create or reduce the base problem. An easy example of that is any rock star that has committed suicide, say Kurt Cobain for instance.

Having or not having cannot fix the long term trouble of being depressed, only heighten your reaction to it. In the end , depression has to be treated. The trick is to not let it destroy you with the side effects like it has almost done with me. Losing yourself and not paying attention to your bills and problems is a symptom of the deeper trouble.

People like myself feel that there is no one to understand, no one to help and the very nature of the disease causes you to give up, not fight. It's a very painful spiral, believe me.

Fred333 · #9 (**permalink**) 10-08-2007, 10:30 AM

There is always a way out. I have found working out or just being active helps me when I am feeling down.

financeman45 · #10 (**permalink**) 10-21-2007, 07:30 PM

Quote:

Originally Posted by kylebellamy

Thanks for that. It's a rough road to say the least but I cannot stress enough to any of you out there who do feel depressed: Got talk to your doctor. Depression is not a rare thing and it can be fought!!!!

I agree one hundred percent. There are several really good treatment programs that have worked well for people in my family.

Ingtar17 · #11 (**permalink**) 10-22-2007, 01:35 PM

You could check out Prosper.com. This is a peer to peer based lending website (US only). Sometimes someone who thinks you have turned a corner will lend to you when the banks won't.

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