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Everything You Want to Know About Chapter 7 Bankruptcy

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chapter 7 bankruptcy

Debt is a familiar companion for most in the United States. And even though we expect to see collective consumer debt surpass $4 trillion this year, most consumers are able to maintain payments and manage debt effectively. Unfortunately for some consumers, such as the 12.8 million who filed bankruptcy petitions between Oct. 1, 2005 and Sept. 30, 2017, debt can become an unmanageable burden that they can’t imagine themselves escaping. Whether the financial struggle is due to unexpected life circumstances or mismanaged money, declaring Chapter 7 bankruptcy might be an option worth considering.

How Chapter 7 bankruptcy works

Bankruptcy is designed as a form of relief to debtors, allowing them to discharge or reorganize their debt. In the case of Chapter 7 bankruptcy, the goal is to liquidate any nonexempt assets and use the proceeds to pay creditors. Which assets are considered nonexempt are defined by your state, but are generally comprised of assets that are not needed in the maintenance of a home or job.

The initial step for most may be to meet with a bankruptcy lawyer to get details on the process along with an overview of the benefits and drawbacks based on your personal situation. After that, if you decide that Chapter 7 seems like the right choice, you need to get credit counseling within the six months before you file.

Assuming that the credit counseling doesn’t find an alternate option, you then file for bankruptcy, submitting the appropriate forms and information (outlined below). After filing, a trustee is appointed to the case. Within 40 days of filing, the trustee will set up a meeting of creditors, during which all the listed creditors and the trustee are able to question the debtor about their financial situation. The trustee handles the administration of the bankruptcy, determines whether there’s a presumption of abuse, liquidates assets, makes payments to creditors and submits asset reports when relevant.

Finally, about 60-90 days after the meeting of creditors, if no creditor files a complaint or objection, the bankruptcy is discharged. Once this is done, the remaining eligible debts are wiped out and the debtor is no longer responsible for maintaining payments. This is also the case in a “no asset” bankruptcy, where there are no assets to liquidate and, as a result, no payments made to creditors before discharge.

It’s understandable why a person might want to file Chapter 7, since it allows borrowers a fresh start without managing ongoing payments, but there are rigid requirements to qualify since the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was introduced to help ward off abuse of the bankruptcy system.

Chapter 7 eligibility

Before determining whether you are eligible for Chapter 7 bankruptcy, determine whether you want to use this option at all. Chapter 7 is often referred to as a liquidation, which means that assets you own (such as a recreational or second vehicle, or tools) can be sold by the trustee in order to pay your debtors. For some consumers, that might be enough to encourage them to look at alternatives, such as Chapter 13 bankruptcy.

But if you determine that the positives of Chapter 7 outweigh the negatives for you, see if you qualify to file. There are a few simple deal-breakers that immediately disqualify you from filing Chapter 7:

  • You’ve had a Chapter 7 bankruptcy discharged in the past 8 years
  • You’ve had a Chapter 13 bankruptcy discharged in the past 6 years

A few more situations that could make you ineligible for Chapter 7 include:

  • You’ve had a Chapter 7 or Chapter 13 bankruptcy dismissed in the past 6 months for reasons such as violating a court order
  • Your debts were obtained through fraudulent means (which could include making false statements on a loan application)
  • You are filing as a corporation or LLC

Your income may prove yet another obstacle between you and Chapter 7. This is determined by taking a means test. Through this test, your last six months of income is measured against the median income of your state. If your income is the same or more than the median, you must complete a second form that lists your expenses. The total allowable expenses are then compared with your income to determine whether you qualify to file for Chapter 7.

What debts are forgiven or discharged under Chapter 7?

The goal of Chapter 7 bankruptcy is to discharge a debt, but only eligible debts will be discharged. So, what’s not eligible? Some of the most common debts you can’t discharge include:

  • Child support
  • Alimony
  • Certain tax debt
  • Death and personal injury claims due to a DUI
  • Debt obtained through fraud
  • Debts not listed in the bankruptcy
  • Most student loan debts

What does that leave? Dischargeable debts such as:

  • Medical bills
  • Consumer debt, such as credit cards
  • Personal loans and promissory notes
  • Some lawsuit judgments
  • Lease and contract obligations

How to file Chapter 7 bankruptcy

First steps

Get a credit counseling briefing with a state-approved provider

Must be done within the 6 months before your filing

Determine which court will handle your case

Find the right court through tools online for your district

Discover what state-specific requirements are for your filing

Some states will list special forms on their website that are required by your local court

Form B2010

A notice required by 11 U.S.C. § 342(b)

Forms for the initial petition

Form 101

Voluntary petition

Form 121

Statement about Social Security numbers

Form 119

Preparer’s notice

Form 2800

Compensation disclosure for preparer

Form 103A (when relevant)

Request to pay fees in installments

Form 103B (when relevant)

Request to waive filing fees

Form 101A (when relevant)

Initial eviction judgment statement

Form 101B (when relevant)

Payment of eviction judgment

You will also be required to submit the certificate of completion for credit counseling and a list of all creditors

Within 14 days of filing

Form 106Dec

Individual debtor’s schedules

Form 106Sum

Asset and liability schedule

Forms 106A-J

Property, debtors, income, leases, expenses statement

Form 107

Financial affairs statement

Form 2030

Compensation disclosure for attorney

Form 108

Chapter 7 filing intention

Form 122A-1

A statement of current monthly income for Chapter 7

Form 122A-2

The means test calculation for Chapter 7

Form 122A-1Sup (when relevant)

Statement of no presumption of abuse

Finally, you’ll be asked to submit a copy of all income (pay stubs and remittances) received in the 2 months before filing

One of the very first things a bankruptcy filer must do before filling out a single form is to get a credit counseling briefing from a provider that’s approved in the state where the bankruptcy will be filed, a step that must be taken in the six months before your filing.

Melinda Opperman, executive vice president of the nonprofit, says that this consultation entails an in-depth review of a debtor’s budget and explores different recommendations and options, but it goes even deeper than that.

“We get to the root problem and probe,” said Opperman. “It might seem like a job loss was the reason for the hardship, but then you realize it’s [just the final straw],” she said.

From there, Opperman said the goal is to provide resources, like a comprehensive budget, to help the consumer achieve their financial goals. If the consumer has settled on declaring bankruptcy, the briefing includes a discussion of the terminology they can expect to hear through the process. The briefing can cost anywhere from $15 per household to $50 per person, depending on the provider you choose.

Another prefiling step is to find out which court you need to file in, based on your local district courts. Then, check with the local court to find out if there are any state-specific forms you need to complete. The last prefiling step is to review Form B2010, a required notice that explains the different types of bankruptcy you can file as well as the costs. For 2018, Chapter 7 had a total fee of $335 — not including lawyer fees.

Completing the initial petition

The initial steps for the initial filing include (when relevant) the following forms as well as any state-specified forms:

  • Form 101: Voluntary Petition for Individuals Filing for Bankruptcy
  • Form 121: Your Statement About Your Social Security Numbers
  • Form 119: Bankruptcy Petition Preparer’s Notice, Declaration and Signature
  • Form 2800: Disclosure of Compensation of Bankruptcy Petition Preparer

You may also need to include the following optional forms, when relevant:

  • Form 103A: Application for Individuals to Pay the Filing Fee in Installments
  • Form 103B: Application to Have the Chapter 7 Filing Fee Waived
  • Form 101A: Initial Statement About an Eviction Judgment Against You (individuals)
  • Form 101B: Statement About Payment of an Eviction Judgment Against You (individuals)

Finally, you’ll want to prepare a list or matrix of all your creditors, formatted the way your local court requires. Submit this along with the above forms and your certificate of credit counseling completion.

Within two weeks

The next and final set of forms must be submitted within the 14 days following your initial filing. These forms consist of:

  • Form 106Dec: Declaration About an Individual Debtor’s Schedules
  • Form 106Sum: A Summary of Your Assets and Liabilities and Certain Statistical Information (individuals)
  • Forms 106A-J: Schedules to 106 listing property, debtors, income, leases, income, expenses and more
  • Form 107: Your Statement of Financial Affairs for Individuals Filing for Bankruptcy (individuals)
  • Form 2030: Disclosure of Compensation of Attorney For Debtor
  • Form 108: Statement of Intention for Individuals Filing Under Chapter 7
  • Form 122A-1: Chapter 7 Statement of Your Current Monthly Income
  • Form 122A-2: Chapter 7 Means Test Calculation
  • Form 122A-1Sup (when relevant): Statement of Exemption from Presumption of Abuse Under §707(b)(2)

The court will also need a copy of all pay stubs and remittances you receive during the 60 days prior to your bankruptcy. Once again, check with your local court to see how they want these submitted and whether they go to the court of the bankruptcy trustee.

Finally, while not a necessity for filing, a requirement prior to discharge is a second financial education course. “The second course focuses on things like setting financial goals, budgeting, banking, borrowing, credit reports, credit scores, re-establishing credit, homeownership and different consumer laws,” said Opperman.

When filing Chapter 7, there is no requirement to have a lawyer, but because of the length of the forms and the number of them, it could be helpful to have one working with you. Especially since you may be able to offset the expense by getting bankruptcy filing fees waived with Form 103B. Either way, since most bankruptcy lawyers offer a free initial consultation, it’s a good idea to at least meet with one and get a sense of the process.

The means test

Chapter 7 has a reputation for being difficult to qualify for. This is mostly due to the more stringent eligibility standards put in place by BAPCPA in 2005. More directly, it’s because of the means test, a nine-page form that analyzes the filer’s expenses. But it’s not always the filer’s actual out-of-pocket expenses that are measured in this test. Instead, most of the expenses are based on the number of people in the household and the IRS-issued National and Local Standards for expenses like food, clothing, and utilities. In other words, what you actually spend on clothing and food will not be a factor.

Passing or failing the means test

When you pass the means test, it shows the court that your filing for Chapter 7 is not an abuse of the bankruptcy system because you can’t afford to restructure your debt under Chapter 13. But life has a way of throwing curveballs at us, which means that just because you fail the means test today doesn’t mean you will six months from now.

Failing the means test means that you’re a good candidate for Chapter 13, but this is only true if you can maintain payments of the Chapter 13 plan for the full three to five years. If you think this isn’t the case, possibly because an unusual bonus or remittance inflated your income before taking the means test, then you may want to wait and retake the test. Or, if you are willing to deal with a higher level of judicial involvement, you can file Chapter 7 even after failing the means test by listing out what you consider to be your special circumstances.

Pros and cons of declaring Chapter 7 bankruptcy

By far, one of the biggest positive aspects of declaring Chapter 7 bankruptcy is the ability to get eligible debts discharged without further payments. Chapter 7 is also much faster than other types of bankruptcy, in some cases taking as little as four months to discharge. (Chapter 13 can take years to get discharged.) Finally, the fact that collections activities stop once a bankruptcy is filed is a positive for many stressed-out debtors.

On the negative side, the impact on your credit score is probably the first thing that comes to mind. But when you’re facing the financial difficulties that make Chapter 7 a viable solution, it’s likely your credit score is already being impacted by late payments, collection notices, and repossessions, and would continue to be if you didn’t file.

One big negative for those who own nonexempt assets is the fact that they will be liquidated to pay creditors. Also, a potential negative is that your next tax refund may be considered part of the bankruptcy estate if it was from prefiling income.



  • Eligible debts are discharged without further payments
  • Faster than other types of bankruptcy
  • Collections activities stop once a bankruptcy is filed
  • Can be discharged in as little as 4 months
  • Has a negative impact on your credit score
  • Nonexempt assets will be liquidated to pay creditors
  • Tax refunds for income earned before filing are considered part of the bankruptcy estate

Alternatives to Chapter 7

For many, bankruptcy is a last resort to deal with out-of-control debt issues. But it’s not the only choice a consumer can make. They might also consider other debt management options such as:

  • Debt management plan: After getting the credit counseling briefing and financial education course required to file bankruptcy, you may learn financial management skills you didn’t have before. These skills can help you create a more efficient budget and may help you discover the ability to better manage your debt without needing to declare bankruptcy.
  • Debt consolidation loans: You may be able to undergo debt consolidation to take all your debt and transfer it to one payment at a reduced interest rate, making repayment somewhat easier to manage. If you have equity in your home, you might be able to take out an equity loan and create your own debt consolidation with lower interest than your creditors currently charge.
  • Lender negotiations: Some lenders may be willing to negotiate with you to lower interest rates and remove fees if you present them with a repayment plan. If you can make a lump sum payment, you may find that some creditors will even settle the total amount due for less. But note that the amount forgiven can be taxable.

When you decide to try to create your own plan for debt resolution, Opperman suggests still taking advantage of the help that an accredited, nonprofit credit counseling agency offers. “Yes, you can do it on your own, but most of us don’t repair our own cars or cut our own hair, so why try to handle this serious of an issue on your own,” said Opperman. “You can do a self-administered [debt management] plan, but at least start by getting some pro advice,” she said.

In some situations, a Chapter 13 bankruptcy might be a better solution than a Chapter 7 or a debt management plan. Especially when your income is high and you have nonexempt assets you want to protect, but your expenses are too high to manage debt repayment on your own.

After you declare bankruptcy, what comes next?

While you may be free and clear of certain debts after declaring Chapter 7 bankruptcy, you might still have remaining debts to manage like student loans, mortgage payments, and other non-dischargeable debts. It’s going to be vital that you create a plan that enables you to maintain those payments and not take on further debt, especially since you won’t be able to file Chapter 7 again for at least eight years.

As you may already have guessed, there will be some impact on your credit as a Chapter 7 bankruptcy will show on your credit report for up to 10 years. The good news is that the influence of this will lessen over time, so much so that we have research indicating that 75% of filers saw their credit rise to 640 after five years of filing — well before the bankruptcy had disappeared from their report.

Managing your credit is extremely important after filing bankruptcy because according to Opperman, things don’t always go as planned. “Often, after a bankruptcy, your credit report is a mess because creditors stop collections and debts get charged off,” she said. “By the time [filers] look at their credit report two years later, it still looks like they owe debts that were discharged,” said Opperman. To help with this, created “The Consumer Guide to Good Credit,” which guides consumers through the process of re-establishing good credit after bankruptcy.


While a bankruptcy filing can stop foreclosure actions, it won’t save your home if you’re behind on payments and it’s only a temporary solution. Instead, struggling homeowners who are facing foreclosure should consider filing Chapter 13, which allows them to catch up on past-due payments.

The main obstacle is the means test, which measures your income and expenses based on IRS-issued National and Local Standards for household expenses, such as utilities and food. If your current monthly income is less than the state median, or your aggregate five-year net income on the means test is less than $12,850, or 25% of your total unsecured debt (of $7,700 or more), then you may qualify.

Yes — assuming you are not behind in payments. A home is generally considered an exempt asset if you have no equity or it is under homestead exemption in your state, which means it’s not liquidated to pay creditors the way that a boat or vacation home might be.


Chapter 7 offers consumers a much-needed solution to the problem of overwhelming debt that can stem from a job loss, medical expense or other unexpected, life- and finance-altering event. While it is more difficult to qualify for Chapter 7 now than it was a decade ago, the hurdles in place are there to prevent abuse of the bankruptcy system, while still ensuring those who legitimately need Chapter 7 can still get access.

Moving forward after bankruptcy, consumers should make sure they extend their financial knowledge and exercise caution when taking on debt, to ensure they don’t end up needing bankruptcy again a few years down the road. The key to this, according to Opperman, is knowledge. “Financial knowledge is power when it comes to your money, and risk occurs when you don’t know what you’re doing with your money,” she said.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Yolander Prinzel
Yolander Prinzel |

Yolander Prinzel is a writer at MagnifyMoney. You can email Yolander here


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Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Before you read on, click here to download our FREE guide to become debt free forever!

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Updated – January 10, 2019

Digging out of credit card debt can feel frustrating, intimidating and ultimately impossible. Fortunately, it doesn’t have to be any of those things if you learn how to take control.

Paying down debt is not only about finding the right financial tools, but also the right psychological ones. You need to understand why you racked up credit card debt in the first place. Perhaps it was a medical emergency or a home repair that needed to be taken care of immediately. Maybe you’d already drained your emergency fund on one piece of bad luck when misfortune struck again. Or maybe you’re struggling with a compulsive shopping problem, so paying down debt will likely result in you accumulating more until the addiction is addressed.

You also need to understand what motivates you to succeed. Do you want to pay down your credit card debt in the absolute fastest amount of time possible that will save more money or do you want to take some little wins along the way to keep yourself motivated?

Here’s a couple strategies consider as you learn the best way to handle credit card debt — and pay it off quickly.

2 common credit card debt repayment strategies

These repayment strategies can help you pay off credit card debt quickly. Keep in mind, you can use these strategies even for non-credit-card debt:

  • Debt avalanche: Focus on paying off the credit card with the highest interest rate first. Then, work your way down. This strategy can save you money on interest and get you out of debt sooner.
  • Debt snowball: Pay off your smallest debts first. Doing so can motivate you to continue making payments as you climb out of debt.

You don’t necessarily need to pick the repayment strategy that gets you out of debt the fastest. After all, if your repayment strategy doesn’t keep you motivated, you may not stick to it.

Using a personal loan or balance transfer credit card

As you seek to repay your debt, you could consider a personal loan or balance transfer credit card with a lower interest rate than on your existing debt. Transferring your debt to one of these financial products could help you reduce long-term interest costs.

But you’ll first need to learn whether or not you’re eligible. Your credit score will play a big role in determining your eligibility for a personal loan or balance transfer card. Use our widget below to figure out if a personal loan or a balance transfer is the best option for you!

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If you have a credit score above 640, you have a good chance of qualifying for a personal loan at a much lower interest rate than your credit card debt. With new internet-only personal loan companies, you can shop for loans without hurting your score. In just a few minutes, with a simple online form, you can get matched with multiple lenders. People with excellent credit can see APRs below 10%. But even if your credit isn’t perfect, you might be able to find a good loan to fit your needs.

Not sure what your credit score is? Click here to learn how and where to find out. If you know your credit score needs some work but not sure of what can be done, click here.

If you have a score above 700, you could also qualify for 0% balance transfer offers. We will talk more about balance transfers below but this option is the best way to pay off credit card debt if you’re able to qualify for a 0% APR balance transfer credit card.

A credit score of less than 600 will make it difficult for you to qualify for either option. If you have a credit score less than 640, struggling to make monthly debt payments and would like to explore your options to reduce your debt by up to 50%, then please click our option below to customize a personal debt relief plan.

Custom Debt Relief Plan

Now let’s talk about the financial tools to add to your debt repayment strategy in order to dig out of the hole.

Let’s say you have $10,000 in credit card debt, and are stuck paying 18% interest on it.

You already know that putting as much spare cash as you can toward paying down your debt is the most important thing to do. But once you’ve done that, so what’s next?

Use your good credit to make banks compete and cut your rates

You could save $1,800 a year in interest and lower your monthly payments based on several of the rates available today. That means you could pay it off almost 20% faster.

Here’s how it works.

Option One: Use a Balance Transfer (or Multiple Balance Transfers)

If you trust yourself to open a new credit card but not spend on it, consider a balance transfer. You may be able to cut your rate with a long 0% intro APR. You need to have a good credit score, and you might not get approved for the full amount that you want to transfer.

Your own bank might not give you a lower rate (or only drop it by a few percent), but there are lots of competing banks that may want to steal the business and give you a better rate.

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promo-balancetransfer-halfIt also has tips to make sure you do a balance transfer safely. If you follow them you’ll save thousands on your debt by remaining disciplined.

You might be scared of a balance transfer, but there is no faster way to cut your interest payments than taking advantage of the best 0% or low interest deals banks are offering.

Thanks to recent laws, balance transfers aren’t as sneaky as they used to be, and friendlier for helping you cut your debt.

Sometimes the first bank you deal with won’t give you a big enough credit line to handle all your credit card debt. Maybe you’ll get a $5,000 credit line for a 0% deal, but have $10,000 in debt. That’s okay. In that case, apply for the next best balance transfer deal you see. MagnifyMoney’s list of deals makes it easy to sort them.

Banks are okay with you shopping around for more than one deal.

Option Two: Personal Loan

If you never want to see another credit card again, you should consider a personal loan. You can get prequalified at multiple lenders without hurting your credit score, and find the best deal to pay off your debt faster.

Personal loan interest rates are often about 10-20%, but can sometimes be as low as 5-6% if you have very good credit.

Moving from 18% interest on a credit card to 10% on a personal loan is a good deal for you. You’ll also get one set monthly payment, and pay off the whole thing in 3 to 5 years.

Sometimes this may mean a higher monthly payment than you’re used to, but you’re better off putting your cash toward a higher payment with a lower rate.

And you’ll get out of debt months or years faster by leaving more money to pay down the debt itself. If you want to shop for a personal loan, we recommend starting at LendingTree. With a single online form, dozens of lenders will compete for your business. Only a soft credit pull is completed, so your credit score will not be harmed. People with excellent scores can see low APRs (sometimes below 6%). And people with less than perfect scores still have a good chance of finding a lender to approve them.



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Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at

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Pay Down My Debt

How to Manage Debt as a Single Parent in 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.


When student loan deferment ended for Samantha Gregory, a single mom and founder of site Rich Single Momma, she had one reaction to her payments: sticker shock. “The amount they were asking for was so astronomical, it was bananas,” she said.

As a single mom in debt, these high payments were added to the already steep financial demands of covering household expenses and supporting her children, including one with special needs — all on one income.

Adding debt to the significant challenges of single parenting “puts a strain on not just your finances, but your emotions, your mental health,” she said. “It’s like, ‘I have this burden over my head so how am I going to take care of it and take care of my family?’”

It’s a question any single parent in debt may find themselves asking. There’s no one right answer, but the good news is that there are smart steps a single mom or dad can use to tackle debt. Here are some tested and certified strategies for how to manage debt as a single parent.

8 strategies for a single parent in debt

1. Keep debt on your radar

A key to managing money as a single parent in debt is to keep an eye on what you owe. Gregory warned against letting debt slip in your money management juggling act. “I know for me in the past, I’ve tried to ignore it and hope it would go away,” she said. “But it doesn’t go away. It’s still there, lingering.”

Keep your debts on your radar, so you’re not losing track of them, falling behind on payments or damaging your credit. If you don’t know what you owe, pull your free credit report and look up each outstanding debt you have and record the balance, interest rate, monthly payment and due date. Start a habit of reviewing these accounts regularly.

2. Work with your lender

Once you know what you owe, see if your lender offers any help or accommodations that can make this debt easier to manage.

You’ll have the most options for dealing with federal student loans, as servicers must provide you with options to forbear or defer payments, or switch to a different repayment plan.

Even for other types of debt, it can’t hurt to ask your lender if they’re willing to work with you. They might be open to giving you an extension on your payment, and some lenders will let you skip a payment now and tack it onto the end of your repayment period instead.

3. Claim benefits and support

Help isn’t always easy to come by as a single parent, so make sure you’re claiming the benefits and child support to which you’re entitled.

Federal assistance programs such as Women, Infants and Children (WIC), Supplemental Nutrition Assistance Program (SNAP) and school lunch programs can ease pressure on your budget while keeping everyone fed, for example. Other programs can assist with fixed monthly costs such as housing, child care or health insurance. Many state and local programs can offer additional help.

Single parents should also consider filing for child support. If you’re already entitled to such payments but the other parent isn’t paying, or you feel it’s not enough, consider pursuing legal steps to get adequate support for your family.

4. Revisit your budget

As a single parent with debt, living within your means is the foundation of your financial security. Review your budget to see if there are areas you’re wasting money on things you don’t need or use, whether it’s a neglected gym membership or a house you’re realizing is roomier than necessary. Consider lifestyle changes and sacrifices — big or small — that you could make to lower your monthly costs.

Look for ways to free up some of the mental space you’re using for your money, too, Gregory suggested. She likes to automate payments, for example, to ensure they’re going out on time with less effort on her part.

5. Sell your extra time and stuff

To the single mom in debt, Gregory suggested looking for ways to generate some extra cash. “I’m a firm believer in side hustles,” she said. “There are so many options out there available to create a side hustle, start a business or just get another part-time job or work-from-home job.”

Then, “look around your house and if you have something valuable you can sell, sell it,” she said. Doing so can bring a fast cash infusion that can help you stay current on debt payments, or even make an extra payment.

It can be a tough and even emotional to sell some belongings, Gregory acknowledged. But, “It’s just things and they’re replaceable, whereas your peace of mind, your family and kids, and your health are not replaceable,” she said.

6. Make extra debt payments

If you can carve out extra savings, that’s money you can use to pay off your debts faster. One method to do so is the debt snowball:

  • Figure out how much more of your monthly income you can afford to devote to making extra debt payments. Include this as a line item in your budget.
  • Put that extra cash toward your debt with the lowest balance, and make the minimum payment on all of your other debts.
  • Watch the balance on your high-priority debt decrease faster.
  • Once your first debt is gone, “roll over” the funds budgeted for your monthly payment and the extra payment and apply them to the next low-balance debt.

Making extra debt payments will lower your principal faster which will, in turn, lower your interest costs. As a result, this strategy could avoid hundreds of dollars in interest and shave months or even years off your debt repayment.

7. Consider debt consolidation

For a single parent, debt consolidation can be another way to get ahead. Consolidating debt makes the most sense when doing so will lower the interest rates you’re paying.

A credit card balance transfer is one way to accomplish this. You can open a credit card with a 0% introductory rate. Then, transfer existing balances to this new credit card (note that this will often incur a balance transfer fee) and you can repay this debt interest-free.

If you have higher debt balances or prefer a fixed repayment plan, a personal loan could be the way to consolidate debt. To do so, you can take out a new personal loan with the rates, term or payments you would prefer and use the loan funds to pay off and replace existing debts. You can compare various lenders with our debt consolidation comparison page to get an idea of the terms and rates for which you could qualify.

8. Tap your community for support

Managing debt as a single parent can be hard on you because, at the end of the day, paying them comes down to you alone. “In the back of your mind, you’re thinking ‘There’s no one who can help me with this,’” Gregory said.

However, you don’t have to go it alone — there are often people who are ready and willing to help as close as your own backyard. So let them! Family and friends can help you out in a variety of ways, from spotting you cash in a tight month to helping with child care. You can also get assistance from your church, community and local nonprofits or programs.

Even if you don’t always find the help you need right away, asking around can start you on the track to getting the recommendation or referral that leads you there. Gregory also suggested online communities, such as local or single-parent Facebook groups, as a way to crowdsource solutions and get connected with helpful resources.

Pass your debt and money lessons on to your kids

Debt can be a big regret for many single parents. “If I had more information when I was going to college, I wouldn’t have taken out so many loans,” Gregory said.

But these ideas for how to manage debt as a single parent can help you push past regret into action. In doing so, you’ll be creating the financial security that your kids need, all while modeling what good money and debt management look like in action.

Gregory, for example, used her experience with student debt to warn her daughter away from borrowing to pay for college. As a result, “She’s really blessed that she doesn’t have to take out student loans, so she won’t be saddled with that big debt when she graduates from college,” she said.

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Elyssa Kirkham
Elyssa Kirkham |

Elyssa Kirkham is a writer at MagnifyMoney. You can email Elyssa here


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