Advice on desperate situation

First, I want to commend you for reaching out. Taking this step shows courage and a desire to take control of your financial future. Your situation is challenging, but with a plan and persistence, there are paths to regain stability and peace of mind.

1. Address the Root Cause: Gambling Addiction

The first and most crucial step is tackling the addiction itself. Without resolving this, even the best financial plan may falter.

Seek Support Groups: Join a program like Gamblers Anonymous (GA), which provides a structured 12-step approach.
Therapy: Consider working with a therapist who specializes in addiction. Many offer sliding-scale fees.
Gambling Blockers: Install software like Gamban or BetBlocker on all devices to restrict access to gambling sites.
Accountability Partner: Share your financial and gambling goals with a trusted person who can support you.

2. Prioritize Essential Expenses

Given your limited income, focus on necessities and minimize non-essential spending.

Essential Expenses: Rent, utilities, groceries, medicine, and Sofi loan (to avoid further defaults).
Non-Essential Expenses: Evaluate whether any discretionary spending can be reduced or eliminated temporarily.

3. Evaluate Debt Settlement Program

You’ve already entered a debt settlement program, which is a logical step given your credit score. However, ensure that:

The program is legitimate and accredited (e.g., through the American Fair Credit Council).
You understand the fees and timelines involved. Debt settlement can take years and might not resolve all debts.

Alternative: If the settlement program isn't working, consider directly negotiating with creditors for hardship plans. Many creditors offer reduced payments or interest freezes when you’re in financial distress.

4. Increase Income Using Your Free Time

Since you can work on personal tasks during downtime, focus on maximizing this opportunity:

Freelancing: Platforms like Upwork, Fiverr, or Rev (for transcription) offer flexible jobs.
Microtasks: Websites like Amazon Mechanical Turk or Appen allow you to earn for simple tasks.
Customer Service or Chat Support: Many companies offer part-time remote roles that require minimal attention.
Selling Unused Items: Consider selling any unnecessary items online (e.g., Facebook Marketplace or eBay) to generate quick cash.

5. Consider a Chapter 13 Bankruptcy

While Chapter 7 bankruptcy may not be an option due to income, Chapter 13 bankruptcy could be viable. This would allow you to:

Consolidate debts into a manageable repayment plan (3–5 years).
Avoid wage garnishments and further collection actions.
Protect assets like your home and avoid additional loan defaults.

Next Step: Consult a bankruptcy attorney for a free or low-cost consultation to evaluate whether Chapter 13 fits your situation.

6. Prioritize Debt Repayment

If you stick with debt settlement, maintain realistic expectations about how long it will take. However, if you regain some financial control, consider focusing on the following:

Smallest Balances First: Pay off smaller debts like your second Amex card ($960) for quick wins.
High-Interest Debt: Target debts with the highest interest rates to reduce the long-term cost.
Personal Loan: Ensure the Sofi loan remains current, as defaulting on this could lead to severe consequences.

7. Rebuilding Financial Health

Once your immediate debts are under control:

Rebuild Credit:
- Use a secured credit card (e.g., from a credit union) with a small deposit to rebuild your credit.
- Keep utilization below 10% and pay off balances in full monthly.
Emergency Fund: Set aside even small amounts ($50/month) to slowly build a cushion.
Savings Automation: Use apps like Chime or Digit to automate small savings transfers without thinking about it.

8. Seek Community Support

You’re not alone, and connecting with others can help emotionally and practically:

Join online forums like r/personalfinance or DebtFree for advice and motivation.
Share progress with trusted friends or family for accountability.

9. Find Emotional Support

Financial stress can lead to feelings of shame and isolation. Consider:

Therapy Apps: Affordable options like BetterHelp or Talkspace.
Stress Management: Practices like journaling, meditation, or exercise to reduce anxiety.

10. Key Action Plan

Immediate Steps:

Focus on addiction recovery (support groups, therapy, blockers).
Confirm legitimacy of your debt settlement program.
Cut any unnecessary expenses to free up funds.
Explore freelancing/microtasks for additional income.

Short-Term (Next 6–12 Months):

Continue Sofi payments to avoid further credit damage.
Negotiate hardship plans with creditors directly if possible.
Consider Chapter 13 bankruptcy as a fallback plan.
Begin rebuilding credit with a secured card.

Long-Term:

Build an emergency fund to avoid future reliance on credit.
Gradually increase retirement contributions when debts are under control.