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Second-year medical in dire financial straits

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  • Second-year medical in dire financial straits

    Hello,

    I am a second-year medical student currently on a LOA. Long story short, I am repeating second year starting the Fall of 2022. Due to my school being in a HCOA and giving us an insufficient amount for cost of living, I took out three credit cards to make up the difference. Now, I have $10,979.38 in credit card debit amongst 3 cards that I am struggling to make the minimum payments on. Below are my monthly expenses. My school gives us approximately $19,588 dollars per year to live on. My yearly expenses total up to $30,583. The leaves me with almost an $11,000 difference to make up.

    My question is two-fold. Firstly, what do I do about the credit card debt? I attempted to do a balance transfer through Chase to a zero percent APR card, but I was not approved to do the transfer or for the card. I called Chase and asked them about their balance liquidation program. The person I spoke was a customer service person and said I would have to speak to a person in account management, but I was not eligible to do so until I began to miss payments and fall into delinquency (I have been making the minimum payments). It seems like I only have two options at this point; continue to make the minimum payments until residency (I have no idea how I am going to afford residency applications given that most people end up using a credit card and mine are maxed out already) OR file for bankruptcy. I am considering meeting with a bankruptcy attorney for a consultation next week. I know it temporarily destroys your credit, but I am young and not planning on buying a house for many years.

    Secondly, where can I reduce my expenses? My rent is the average cost for a 1BD in the city I live. I attempted to get a roommate last year, but all my friends either wanted to live alone or had roommates from the previous year. This upcoming year will likely be even worse given that I don’t know anyone. Even if I were to find another person, the lowest rent I have seen is $600 a month without utilities. That puts me at approximately $23,383.00 a year for the cost living. I would still have a $3795 difference to make up. I am considering living out my car and renting a storage unit to keep my stuff in for the next year or two. I don’t really see another viable option. Other than that, I don’t really see where else I could reduce my expenses.

    I am truly at a loss as to what I should and would greatly appreciate any help.
    Rent $ 1,110.00
    Utilities $ 20.00
    Haircut $ 40.00
    Gym membership $ 47.70
    Credit card payments $ 410.32
    Gas $ 200.00
    Groceries $ 360.00
    Prescription $ 40.00
    Spotify $ 9.99
    Xbox Live $ 10.59
    Spending money $ 200.00
    Miscellanous $ 100.00
    Total $ 2,548.60

  • #2
    Can’t you usually get student loans outside of your school?

    I don’t see how bankruptcy changes your issue which is you are currently spending more than you are getting in loans. I feel like people who declare bankruptcy change something but I assume your plan is going to be to continue to do the same thing that landed you there.

    Comment


    • #3
      Originally posted by CordMcNally View Post
      Can’t you usually get student loans outside of your school?

      I don’t see how bankruptcy changes your issue which is you are currently spending more than you are getting in loans. I feel like people who declare bankruptcy change something but I assume your plan is going to be to continue to do the same thing that landed you there.
      Thanks for the comment. I have asked my school financial aid office if I could increase the amount I received for cost of living, but they said no. That is when I resorted to using a credit card to making up the difference. I have no looked at getting student loans outside my school. I am unsure how this works given that everything goes through the financial aid office.

      Regarding bankruptcy, I see what you're saying. My thinking was that it would get rid of the monthly payments and would allow me to eventually open a secured card to pay for residency applications.

      Comment


      • #4
        Part time job? My wife spent 1st year of Med school working part time as a server. Not easy to do but with a job that has a flexible schedule might be an option. Not much else you could do other than try and cut down expenses wherever possible. Cut out the subscriptions, cook your own food, drop gym membership, etc. Do you own your car outright? Can you sell it and buy cheaper transportation? Can’t think of anything else.

        Comment


        • #5
          Wow, you are considering living out of your car for a year while you are currently paying for your x-box live, gym, and spotify memberships? You need to read Dave Ramsey's total money makeover. You don't have to follow the advise on not taking out more student loans, but you do need to get rid of the credit cards and come up with a grown up budget. You do need to get more student loan money, but I would also look more carefully at your budget because you need a better understanding what is "essential".

          Comment


          • #6
            Get a roommate.
            cheaper haircut.
            cut out gym membership—exercise outside
            drive less
            cut out xbox Spotify spending money misc

            This is not the school giving you an insufficient amount, this is you spending too much.

            Why do you need to repeat 2nd year? You absolutely can’t afford another repeat. If I were you I would take a long hard look at whether medicine is right for you and consider cutting your losses.

            Comment


            • #7
              Originally posted by ShredtheGnar View Post
              Part time job? My wife spent 1st year of Med school working part time as a server. Not easy to do but with a job that has a flexible schedule might be an option. Not much else you could do other than try and cut down expenses wherever possible. Cut out the subscriptions, cook your own food, drop gym membership, etc. Do you own your car outright? Can you sell it and buy cheaper transportation? Can’t think of anything else.
              Thanks for the comment. I honestly don't know if I could handle the rigor of medical school and work part time. I'll definitely consider it given my circumstances. I own a 2005 Subaru, but unfortunately it has a lot of miles on it. I don't believe it is worth much.

              Comment


              • #8
                Originally posted by nephron View Post
                Wow, you are considering living out of your car for a year while you are currently paying for your x-box live, gym, and spotify memberships? You need to read Dave Ramsey's total money makeover. You don't have to follow the advise on not taking out more student loans, but you do need to get rid of the credit cards and come up with a grown up budget. You do need to get more student loan money, but I would also look more carefully at your budget because you need a better understanding what is "essential".
                Thanks for the comment. It's a fair criticism. In my mind, the xbox-live, Spotify, and gym membership are minor expenses that make me happy (totaling less that $70.00 a month). If I did get rid of them, it would hardly put a dent in my debt and would decrease my overall happiness. However, living in my car would reduce my expenses significantly. This was my rationale anyway.

                Comment


                • #9
                  Originally posted by Anne View Post
                  Get a roommate.
                  cheaper haircut.
                  cut out gym membership—exercise outside
                  drive less
                  cut out xbox Spotify spending money misc

                  This is not the school giving you an insufficient amount, this is you spending too much.

                  Why do you need to repeat 2nd year? You absolutely can’t afford another repeat. If I were you I would take a long hard look at whether medicine is right for you and consider cutting your losses.
                  Thanks for the comment. I am going to attempt to find a roommate, but this still leaves me with almost a $4,000 difference to make up. And I am willing to cut these "non-essential" items out, but it will hardly put a dent in the difference I need to make up.

                  Comment


                  • #10
                    Originally posted by Nave View Post

                    Thanks for the comment. I am going to attempt to find a roommate, but this still leaves me with almost a $4,000 difference to make up. And I am willing to cut these "non-essential" items out, but it will hardly put a dent in the difference I need to make up.
                    Cut your own hair, get rid of the previously mentioned subscriptions, you should be able to take $100 off of groceries (get used to rice and beans), and away goes your spending money. There's $4300. Desperate times call for desperate measures.

                    Comment


                    • #11
                      I assume you've fixed whatever issue is causing you to repeat a year. THAT's the big issue. Not the overspending. Not the credit card debt. Get through school and through residency and you will have a lot more options to deal with the debt.

                      Declaring bankruptcy for $10K or $40K of credit card debt as a doc seems ludicrous. The student loans won't go away.

                      Half of your $11K a year of overspending is making payments on credit cards. That's won't get better if you keep using them.

                      If you're on a LOA, you need to go find a couple of jobs until this Fall. That'll go a long way. Everyone is hiring right now.
                      Helping those who wear the white coat get a fair shake on Wall Street since 2011

                      Comment


                      • #12
                        Living out of your car pretty much means giving up Xbox live doesn’t it?

                        Get a good paying manual labor job during this LOA, that alleviates your need for a gym membership issue while earning income. Nothing improves your focus on your studies like a summer spent doing exhausting manual labor.

                        Work evenings at a restaurant and see what sort of on the job meals you can scrounge. Probably enough to take a doggy bag home for tomorrows lunch.

                        Making tough cuts and hard sacrifices isn’t the only way to get out of this but in the long run it’s the best way. It builds a faith in your own ability to handle whatever misfortune comes your way. That will solve this problem and many more that will inevitably come up in the years of training ahead.

                        Comment


                        • #13
                          Rent $ 1,110.00
                          Utilities $ 20.00
                          Haircut $ 40.00
                          Gym membership $ 47.70
                          Credit card payments $ 410.32
                          Gas $ 200.00
                          Groceries $ 360.00
                          Prescription $ 40.00
                          Spotify $ 9.99
                          Xbox Live $ 10.59
                          Spending money $ 200.00
                          Miscellanous $ 100.00
                          Total $ 2,548.60

                          As others have said, you have a spending problem. Anyone considering sleeping in their car should not be spending $40 a month on haircuts, and paying for Spotify and xbox live.

                          Cut your own hair, give up gym, Spotify, and Xbox. That's over $100 right there.

                          $360 a month for groceries for a single person is way too high. You could easily shave $100 off of that.

                          $300 in spending money and miscellanous? Yeah, get rid of that too.

                          That's $500 a month you could relatively easily come up with.

                          Comment


                          • #14
                            Public transportation? I took the city bus all 4 years of dental school. Did I like it? Nope. Did it save me a ton of money? Yes. (mostly for parking, not gas). You easily have a few hundred dollars that you can save.

                            Comment


                            • #15
                              how much are studio apts?

                              Agree with a lot of the above posters- not having xbox live will be less depressing than living in your car.

                              If you have time off from now until the fall, time to take as many jobs as you can. Waiter, valet, supermarket worker, McDonalds, day laborer, Amazon warehouse, kaplan tutor, whatever. I valet'd the summer between ms1-2 years (along with a few odd jobs on craiglist) for extra dough- if the valet night was for a wedding event we got an extra dinner plate every time. You have 8 months that you can work like a regular american. It may even help you connect/empathize with your patients in the future.

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