This episode of Maxed Out is about Brooke, a 32-year old who has given up hope on her financial situation and the stress has begun to affect her physical and mental health. Sadly, Brooke says that she comes home from work and cries alone every night about her debt, and proclaims, “My debt is killing me. I am my debt.” Financial guru Allison Griffiths runs the numbers and finds out that in fact, it appears Brooke has become her debt. Find out more about Brooke’s situation when you read more.
Her debt started out as $35,000 in student loans and now totals about $70,000. Forty-one percent of her paycheck goes to interest payments alone! If Brooke wanted to get rid of her debt in five years, she would have to make $21,600 in payments each year, leaving her with $4,800 to live for the entire year. Her $967 shortfall each month indicates that Brooke is spending money she doesn’t have, and her wages were garnished when she defaulted on a personal loan last month which means her finances are almost as messy as they get.
Allison gives her usual advice of taking out only $20 each week for spending and tracking every penny, but she also tells Brooke to visit a bankruptcy trustee to see if that might be the right decision for her. At the end of the episode, Brooke has cut expenses by $1,130 each month and is an overall happier person. She is working toward paying back a loan co-signed by her mother so that her mom’s credit isn’t affected if Brooke declares bankruptcy, which is still an option she is considering.