Resident experiencing financial crisis-advice?

[finance911]

I'm a second year resident in the southern US- I transferred to my current program from another program in a large city in order to save money. In addition to educational debt, I have excessive credit card debt from medical school/college/etc. Although I've always been able to make my minimum payments, the new credit card laws have resulted in increased interest rates and increased minimum payments to the point that I now owe greater than $1000 monthly to credit card companies. I've taken steps to reduce my cost of living (used car, crappy apartment, eating only ramen) but I have depleted my savings and I can't make ends meet on a resident's salary.

The military is not an option for me (had cancer when I was younger) and I do not have any family to offer me support. Please let me know if anyone has any ideas or knows of any resources to provide help to individuals in my situation. I need to be able to finish residency without becoming homeless or losing my car and I'm running out of options.

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[PharmaTope]

I'm a second year resident in the southern US- I transferred to my current program from another program in a large city in order to save money. In addition to educational debt, I have excessive credit card debt from medical school/college/etc. Although I've always been able to make my minimum payments, the new credit card laws have resulted in increased interest rates and increased minimum payments to the point that I now owe greater than $1000 monthly to credit card companies. I've taken steps to reduce my cost of living (used car, crappy apartment, eating only ramen) but I have depleted my savings and I can't make ends meet on a resident's salary.

The military is not an option for me (had cancer when I was younger) and I do not have any family to offer me support. Please let me know if anyone has any ideas or knows of any resources to provide help to individuals in my situation. I need to be able to finish residency without becoming homeless or losing my car and I'm running out of options.

is there anyone that could help you out at all. Can you ask your co-residents for help.

If you lived by me (I am not down south), I would honestly let you live in my second bedroom for free (100% serious). Someone must be willing to give you a hand? Reach out to a local church or something. Stay strong. Message me if you like. If you are religious, pray to God and reach out to those that follow your faith for help.

Never be afraid to ask for help from someone.

 

[babel]

I'll second the bankruptcy idea. $1000/mo to CC on a resident's salary can't be easy, especially with student loans on top of that. What's your total balance? You didn't mention spouse or kids, and I'm guessing that you don't have much in the way of assets, so it might be the way to go.

 

[NPEMTIV]

I would initially talk to a credit counselor and see about getting some of the debt owed reduced. I know several who have done this and had their overall principal dropped to a more manageable level. If that fails and you can't find another way out of it then bankruptcy might helps some, but you can't get out of student loans...they are protected and you'll have to pay them.

 

[odieoh]

You can consider taking out a physician's loan from one of the many banks who offer this. Suntrust is one such. I was considering starting a small business during residency and took out a 20k loan and it was very easy to get. I ended up not doing it and just paid the money straight back. Granted my credit is good, depending on your credit score it may be more difficult. If you could get a loan to pay off a lot of the CC and use some of it for living expenses, it could help. In general I'm not a fan of borrowing to pay off debt, but for CC debt it makes sense since the interest rate is so horrible.

I would be very careful in asking fellow residents for help. . .most residents are fairly strapped. You don't want to be the guy everyone avoids because you are asking for cash all the time, or whining about your situation all the time.

 

[NotAProgDirector]

Most states =have free consumer credit counseling services. Simply google (insert state name here) Consumer Credit counseling service, or go to www.nfcc.org and search from there. It should cost nothing. They'll help you 1) cancel all of your credit cards if you haven;t done so already, and 2) negotiate with the lenders to have a lower interest rate / repayment plan / remove built up interest / etc.

 

[peppy]

If you are seriously willing to consider the military, might be worth talking to a recruiter to see if you can get a waiver for your medical past. I never looked very seriously into it but the impression I received from a doc who did some time in the Army is that if you are in a specialty they really need they will make a lot of exceptions for you.

 

[dragonfly99]

-go to consumer credit counseling. Don't go to one of those debt consolidators that charge you money - it should be free. I bet you can get your payments substantially reduced
-with student loans, would it be possible to apply for a deferral until you are out of residency? I know my lender has a form where you can apply for that...you can usually get them deferred, at least temporarily. Or maybe you can get your payments changed so you are paying them interest only during your residency
-occasional moonlighting can be good, particularly once you get into 3rd year residency or beyond. The opportunities depend on your specialty, though.
-a few residency programs may have emergency loan programs. I believe our GME office had that at my residency program (usually it was just $500 or so or something, so that wouldn't help the OP that much)
-I think bankruptcy is always an option, but it should be lower on your list. Since you are a resident, you have almost a guarantee of a better income in 2-4 years or so, so your situation is different than someone who has no prospects of getting out of debt.

 

[PharmaTope]

You can consider taking out a physician's loan from one of the many banks who offer this. Suntrust is one such. I was considering starting a small business during residency and took out a 20k loan and it was very easy to get. I ended up not doing it and just paid the money straight back. Granted my credit is good, depending on your credit score it may be more difficult. If you could get a loan to pay off a lot of the CC and use some of it for living expenses, it could help. In general I'm not a fan of borrowing to pay off debt, but for CC debt it makes sense since the interest rate is so horrible.

I would be very careful in asking fellow residents for help. . .most residents are fairly strapped. You don't want to be the guy everyone avoids because you are asking for cash all the time, or whining about your situation all the time.

i know if my fellow resident was a good guy or good gal, id say you can stay at my place for free to get yourself more on your feet. Pay me back or something overtime.

I have done this for friends of mine that were in medical school. I paid full rent and utilities for a year and a half and let them live with me free. I was a student at the time and then doing my own residency. I deferred/forebare my loans that year to have more income coming in and paid it out.

Afterwards they were stressed about paying me back, i told them not to worry about it. The debt is cleared that's what friends are for. THIS IS WHAT YOU DO FOR PEOPLE IN NEED OF HELP!

You help them. Your friends should step up for you and not turn their backs on you. Yes, everyone is in tough times but when tough times come shows you who your true friends are.

Honestly, reach out to a church, they may be able to get you housing for free temporarily to allow you out of this debt. There are people out there who would pay your debt for you out of the goodness of their heart and just say you pay them back later. THIS IS HOW LIFE GOES. Do things for others without expecting something back in return. The ultra competitive world of healthcare makes people lose sight of that.

Stay strong!!! PM me if you need to.

 

[odieoh]

i know if my fellow resident was a good guy or good gal, id say you can stay at my place for free to get yourself more on your feet. Pay me back or something overtime.

I have done this for friends of mine that were in medical school. I paid full rent and utilities for a year and a half and let them live with me free. I was a student at the time and then doing my own residency. I deferred/forebare my loans that year to have more income coming in and paid it out.

Afterwards they were stressed about paying me back, i told them not to worry about it. The debt is cleared that's what friends are for. THIS IS WHAT YOU DO FOR PEOPLE IN NEED OF HELP!

You help them. Your friends should step up for you and not turn their backs on you. Yes, everyone is in tough times but when tough times come shows you who your true friends are.

Honestly, reach out to a church, they may be able to get you housing for free temporarily to allow you out of this debt. There are people out there who would pay your debt for you out of the goodness of their heart and just say you pay them back later. THIS IS HOW LIFE GOES. Do things for others without expecting something back in return. The ultra competitive world of healthcare makes people lose sight of that.

Stay strong!!! PM me if you need to.

Well, letting someone stay with you is a bit different than handing out cash. That was very nice and admirable of you to do. Just to play devil's advocate however, did they ask you to let them stay, or did you offer it up after hearing about them having problems? It is a big difference. . . It takes a very large pair of cajones to ask someone if you can move in with them for a year or so without paying, and really that kind of thing usually would be between good friends. Depending on the OP's relationship with his fellow residents, that may or may not be a viable option.

One other question I have is why did OP end up in so much CC debt? Were there unexpected medical bills/emergencies etc, or was it just pure spending beyond reasonable means? If its the latter, to some extent its not necessarily the greatest thing to bail them out if they will just continue to spend, which is often the case. However it sounds like OP is now on track and being more fiscally responsible.

 

[PharmaTope]

Well, letting someone stay with you is a bit different than handing out cash. That was very nice and admirable of you to do. Just to play devil's advocate however, did they ask you to let them stay, or did you offer it up after hearing about them having problems? It is a big difference. . . It takes a very large pair of cajones to ask someone if you can move in with them for a year or so without paying, and really that kind of thing usually would be between good friends. Depending on the OP's relationship with his fellow residents, that may or may not be a viable option.

One other question I have is why did OP end up in so much CC debt? Were there unexpected medical bills/emergencies etc, or was it just pure spending beyond reasonable means? If its the latter, to some extent its not necessarily the greatest thing to bail them out if they will just continue to spend, which is often the case. However it sounds like OP is now on track and being more fiscally responsible.

i told them, don't worry about anything, i got your covered. they didn't ask and said they would pay me back when they got money from the school, but you know how loan dispersements go. some people are too prideful to ask for help. when you know someone needs some help, you just help. at some point those good things will come back to you as well if you are in a situation (hopefully).

i said save the loan dispersements and use them for your ERAS and flights to and from interviews etc. when all was said in done, i said congrats on graduating.... you owe me nothing and that's your graduation gift from me.

that's what friends are for.

 

[JelloBrain]

PharmaTope, what you did for your friend/s is indeed noble. I have done it myself in the past. I always tell people to pay it forward to others in need-that is the way you ease that debt. So far, karma has been good.

OP, I don't have any advice to you beyond what has been already given, but hope you get this issue resolved soon. My best wishes are with you.

 

[dynx]

I'm a second year resident in the southern US- I transferred to my current program from another program in a large city in order to save money. In addition to educational debt, I have excessive credit card debt from medical school/college/etc. Although I've always been able to make my minimum payments, the new credit card laws have resulted in increased interest rates and increased minimum payments to the point that I now owe greater than $1000 monthly to credit card companies. I've taken steps to reduce my cost of living (used car, crappy apartment, eating only ramen) but I have depleted my savings and I can't make ends meet on a resident's salary.

The military is not an option for me (had cancer when I was younger) and I do not have any family to offer me support. Please let me know if anyone has any ideas or knows of any resources to provide help to individuals in my situation. I need to be able to finish residency without becoming homeless or losing my car and I'm running out of options.

Lots of good suggestions.

Some finer points of going bankrupt:
1. talk to a free counselor. See what they suggest since its impossible for us to see what your assets/total debt/income are they will likely be in the best position to advise you...don't pay.
2. if you don't pay your bills your credit is shot. If you declare bankruptcy your credit is shot. So...once you decide to declare bankruptcy STOP PAYING YOUR BILLS, except utilities and of course student loans.
3. DON'T SAVE the extra money. It'll be used by the courts to pay your debts. Use every red cent, as much as you can, to pay down your student loans since they'll stick with you even after bankruptcy.

more to follow but my new furniture is here...some of us married rich. which would be m

 

[finance911]

I appreciate all of the advice- Most of my credit card debt is from medical expenses as well as from 4th year residency application costs. I didn't qualify for the extra residency/relocation loan and I interviewed for a competitive field, so I ended up charging expenses for about 20 interviews as well as multiple away rotations, second looks, etc.

My credit unfortunately is already ruined, so the physician loan programs are not an option. I talked to a financial advisor last week and the advice was laughable- the guy really did not have any concept of what it means to be in residency and kept telling me to get a second job or look for higher paying jobs if I wasn't making enough money to pay my bills.

Thanks for the suggestion of talking to the consumer credit counseling agencies- going to try this next and will hope for the best.

 

[lord_jeebus]

Some finer points of going bankrupt:
1. talk to a free counselor. See what they suggest since its impossible for us to see what your assets/total debt/income are they will likely be in the best position to advise you...don't pay.
2. if you don't pay your bills your credit is shot. If you declare bankruptcy your credit is shot. So...once you decide to declare bankruptcy STOP PAYING YOUR BILLS, except utilities and of course student loans.
3. DON'T SAVE the extra money. It'll be used by the courts to pay your debts. Use every red cent, as much as you can, to pay down your student loans since they'll stick with you even after bankruptcy.

👍

 

[PharmaTope]

PharmaTope, what you did for your friend/s is indeed noble. I have done it myself in the past. I always tell people to pay it forward to others in need-that is the way you ease that debt. So far, karma has been good.

OP, I don't have any advice to you beyond what has been already given, but hope you get this issue resolved soon. My best wishes are with you.

thanks! i hope you are right about the good Karma. I could use some to be quite honest right now. lol.

I think a lot of people lose sight of what life is really all about. It is so easy to get caught up in money, greed, personal gain, etc. For me it was loss of loved ones and other things that made me even contemplate the meaning of life.

 

[Jet915]

I second the military option, they have loan repayment options/stipends (2k a month) that would help. Assuming you are cancer free, they would take a look at you, especially if you are a "critical" specialty like anesthesia, surgery, psych etc...

 

[tchoupdoc]

You can consider taking out a physician's loan from one of the many banks who offer this. Suntrust is one such. I was considering starting a small business during residency and took out a 20k loan and it was very easy to get. I ended up not doing it and just paid the money straight back. Granted my credit is good, depending on your credit score it may be more difficult. If you could get a loan to pay off a lot of the CC and use some of it for living expenses, it could help. In general I'm not a fan of borrowing to pay off debt, but for CC debt it makes sense since the interest rate is so horrible."

Be very careful if you do this. When I was a resident, I consolidated my debt for some educational loans, car loan, and a small amount of credit card debt. I didn't know that consolidated debt, if it includes credit card debt, must be paid off in 5 years. Things were very tight for me throughout residency as a result.

What if the same or similar rules apply if you borrow money to pay off cc debt?

 

[Winged Scapula]

As a PGY-2, do you have an unrestricted license and does your program allow you to moonlight?

Some of my colleagues and I were able to double our residency income by moonlighting during time in the lab/weekends and I know while painful, it helped a couple out of some financial problems. I'm sure you have thought about this, but its worth mentioning.

 

[cyclohexanol]

I appreciate all of the advice- Most of my credit card debt is from medical expenses as well as from 4th year residency application costs. I didn't qualify for the extra residency/relocation loan and I interviewed for a competitive field, so I ended up charging expenses for about 20 interviews as well as multiple away rotations, second looks, etc.

My credit unfortunately is already ruined, so the physician loan programs are not an option. I talked to a financial advisor last week and the advice was laughable- the guy really did not have any concept of what it means to be in residency and kept telling me to get a second job or look for higher paying jobs if I wasn't making enough money to pay my bills.

Thanks for the suggestion of talking to the consumer credit counseling agencies- going to try this next and will hope for the best.

Sorry to hear about your situation, I can't imagine having all that stress while going through residency. You mention that the financial advisor you talked to was clueless, understandable. Maybe you should try talking to an advisor who is more knowledgeable in medical school loans/debt and residency. I talked to some guys at GL advisor, and they seemed to offer good advice and gave me a solid plan (plus they will do my taxes, which is an epic win). Just a thought, seems like at this point it definitely can't hurt.

Good luck!

 

[45408]

I talked to a financial advisor last week and the advice was laughable- the guy really did not have any concept of what it means to be in residency and kept telling me to get a second job or look for higher paying jobs if I wasn't making enough money to pay my bills.

We had a mortgage counseling session from some goober at the end of M4 year, and so many of his suggestions and guidelines indicated he had no idea what the average resident's work schedule, debt load, and income are...

 

[MJB]

For all the "help" this administration is supposed to be giving folks, it's sure kicking my family's ass.

We are good citizens, so we are actually going to PAY our medical bills incurred from our son being in the NICU for 10 days....and we are going to pay for the ridiculous Step 2 CS exam and its travel expenses...then pay for travel to residency interviews...

So, I go to apply for a little extra loan to help cover things and I'm told that thanks to new laws the best they can do is charge me 4% origination fee and about 13% interest...on a STUDENT LOAN. That's worse than a CC.
Tried to re-finance some stuff...can't...and our credit scores are 700+

So, I didn't much care one way or the other on Obama to start, but the guy and his minions are freaking KILLING us right now.

Maybe I should just be a leech on society and skip out on my responsibilities like most others seem to be doing.

But, I'm not bitter. 🙂

 

[DrJosephKim]

Have you spoken with your program director? There are many areas where you can trim your budget (even in small areas).

 

[TruePath]

Dude -
Consolidate debt ASAP.
Call GLAdviser (http://www.gladvisor.com/). For $395/year they will work out a complete package for you, take care of all the paperwork, fees, and get you on the right track. They came out and did a pitch at my school and I've heard nothing but good things.
Investigate "Income Based Repayment" - I know you can do it with your school loans, not so sure about your credit card debt.
Good luck!

 

[turquoiseblue]

as a pgy2 u dont have many more years left until you are in practice right?
maybe one or two? just keep hanging in there as much as you can. then you can mostly repay those loans much more easily at that point. definitely consolidate, as is being advised, so you have a lower monthly fees that you can afford.

If you can't consolidate:
Here's a horrible tip that i've been holding back that i dont advise and to use with caution. someone taught me this and i guess he's done it before. he's always been in debt his whole life, because he likes to invest in assets: sometimes you can bargain with credit card companies and say you can't pay it off and don't have the money, you get debt collectors after you and you say you can't pay, then they'll give you bad credit, which you already have anyways, so it is no loss..you can rebuild it later. it's probably the worst thing to do, but i've been told it could possibly work if worse comes to worse, but i didn't want bad credit so i found ways to pay off my debt and made a deal with the debt collectors to pay it off in a smaller amount that i could afford and at a later time when i could afford it....they will bargain sometimes if you are in a bind, because they want their money. you may already know that. but you have to put on this act like you can't pay it off and are that broke.

Better yet, and a more reasonable approach: sometimes you can go to a bank and talk to them to talk to your credit card company or debt collectors for you and help you come to a reasonable deal to pay off the debt. i've done that before and it worked, but it wasn't for as much as you have, but maybe every little bit can help.

chck out this helpful link:http://www.ehow.com/how_2076715_negotiate-credit-card-debt.html

 

[ceoDoctor]

These problems really haunt becuase I want to be a Doctor to. It leaves me to say is being a Doctor worth it?