It could be worse

iVillage Member
Registered: 03-25-2003
It could be worse
2
Sat, 04-26-2003 - 9:12am
I have a good friend who is in debt....unbelievably so when compared to some of the other stories on this board.

Family Income: 20,000 a year

Family Size: Two adults, two small children, not yet in school.

DEBT:

Student Loans = $60,000

Credit Cards = $10,000 (guess - they are not sure - all cards are maxed out)

FINANCIAL HISTORY:

Filed bankruptcy approximately three years ago. Student loans are not allowed to be included in bankruptcies (as far as I know).

This is obviously a financial disaster and I feel for them and how hopeless their situation seems. When you feel that your finances are the worst, try to remember this family and others that are obviously in the same boat.

iVillage Member
Registered: 08-14-2002
Sun, 04-27-2003 - 11:52pm
I can empathize with your friends - but they are fortunate that their biggest debt is probably the most lenient and flexible type of debt! You do not say in your post if your friends are in the U.S., but there are some things they can do if they are:

Student loan interest is tax deductible - for as long as they are in repayment. The law used to be only during the first 5 years, but has changed recently - it is now indefinite. Be sure they are claiming every penny they pay in interest on their income taxes - 100% deductible.

Second, if they have not consolidated their loans, NOW is the time to do so. Sallie Mae offers several different repayment plans, designed to fit income, lifestyle and other needs. Deferments and forebearances are VERY easily obtained if they can't keep up with payments. (Again, the law used to set a limit to the number of D/F you could get, but no more - it is unlimited.) And interest rates are at their lowest right now. Even if they have already consolidated, they can refinance for a lower rate.

Been there, done that. I started with $15k in student loan debt, 2 of these in default and the other 6 about to go that way. 4 yrs later I owe only $6k and am paying lower interest than when I got out of college.

I know you weren't asking for help for them, but I just couldn't resist the opening. Best of luck to your friends - hope I've offered something to help.

Msfit

                  &nbs

iVillage Member
Registered: 03-25-2003
Mon, 04-28-2003 - 10:49am
I didn't realize that interest on student loans was tax deductible. I will most certainly forward this info to my friends!! Thank-you so much!!