Surviving Divorce and Student Debt

iVillage Member
Registered: 08-27-2005
Surviving Divorce and Student Debt
7
Sat, 08-27-2005 - 12:31pm

I am new and I just finished reading a lot of posts on various situations. I don't know all the lingo but here goes. Any suggestions would help.

I am 34 yrs old and newly divorced. I was able to refinance our home to buy my ex out of the house. So, now I have a slightly larger mortgage (lower interest rate) but I am paying the mortgage myself. I have no car payment and just the usual household expenses. I have huge student loans from graduate school. A good chunk of the loans have been consolidated but I still have $40k in private loans that are killing me monthly. I make good money as I am a professional but after all bills and mortgage, I have about $400 a month for gas and food. I cannot cut any more out of my budget or I will die of depression. Does anyone have suggestions for me? I have been told to try to get a second loan on the house to pay off the unconsolidated student loans so that they will be tax deductible. I have actually even been thinking of selling the house outright to use the equity to pay off ALL of the student loan debt at once. That would leave me with a little money but no house and thus - no tax write-off which I will need with my salary.

The past few months I have been overwhelmed both emotionally and financially. Last night I had my third panic attack in a month. I cannot live like this. It is affecting my work and my desire to new people. I don't go out, I don't do anything. I just sit at home and freak out.

From what I have read, this forum is full of caring people in the same boat. I just wanted to know if anyone else has some alternatives for me besides winning the California lottery!!!

Thanks.

iVillage Member
Registered: 02-19-2004
Sat, 08-27-2005 - 1:07pm

Have you looked into consolidating your private student loans without attaching your house to it?

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Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Sat, 08-27-2005 - 1:42pm

If you do not have an emotional attachment to your home, and it will help you get rid of debt - that is the #1 way for you to get back on top.

All my best,
Danni

iVillage Member
Registered: 03-25-2003
Sat, 08-27-2005 - 1:42pm

(((((hugs)))))

I understand what you mean about not being able to cut out any more from your budget. Everyone is different and every situation is different. There comes a time, though, when you just can't cut any more out without really feeling depressed. It's different for everyone, but for someone who is already going through a rough period it must feel really stressful.

In your shoes, I'd probably sell the house. It's a tough decison to make. I think, though, that knowing that I was getting to wipe the slate clean would feel really great. Getting out from under all of that stress would certainly improve my outlook on life. Being able to sleep at night, to look forward to the little treats in life, to not worry about every bill would be such a huge relief.

I'm not certain about how this would affect you financially in other areas. You meantioned that you need it for the tax right off. Is it possible to move to a smaller and cheaper house/condo? Lower mortgage, you could take so of the profit from the sale and reduce your student loans.

I'm hoping others are able to provide you with more support and advice. You're not alone-we've all been or still are in difficult places and are working to improve our lives.

Lynne

Avatar for aerandel
iVillage Member
Registered: 03-25-2003
Sat, 08-27-2005 - 9:51pm
Who do you have your private student loans through? If they are high interest loans you may want to look into doing a private loan consolidation, many companies do not do it but check out Collegiate Funding Services. (CFS) They do it and I am planning on working with them. If you have low inerest personal loans it may not benefit you but it's worth a try.

                          

             

iVillage Member
Registered: 08-27-2005
Mon, 08-29-2005 - 12:09pm
Thanks to everyone for their ideas and support. I think I am pretty much at rock bottom and needed a swift kick in the behind. I freaked out so much that my parents made a three hour drive Sunday to see me. I know my depression is hard for my parents to take and they are worried. Frankly I am too. Today I am going to ask my boss for a much deserved raise. That takes care of the immediate problem. Then I am going to see a financial advisor concerning the sale of the house and purchase of a smaller house or condo. I agree that getting out of debt will probably turn things around for me emotionally. I am also pretty sure that staying in my house is dredging up painful memories about the divorce. I internalize a lot of things to the point of making myself physically sick. If I could just get past the anxious, nauseous feeling, I'd be better. I have a lot of friends here but sometimes they just don't get it. They are all married with kids and living their own lives. I often wonder how they do it -- some are stay at home moms and their husbands work "normal" jobs, meaning they are not CPAs or lawyers or doctors. I just wonder how they appear so carefree with money?!?!? I found out this weekend that my mom gets the same panicky nauseaous feelings too. Funny how I never knew that before.
Again, thanks for the advice and encouragement.
iVillage Member
Registered: 04-21-2004
Mon, 08-29-2005 - 3:06pm

I don't have alot of advice, but I just wanted to wish you luck on asking for a raise! I hope it goes well. Also, good luck on selling the house. You are right, you are probably reliving alot of old memories there.. just think of this as your new beginning. the first day of your brand new life. all things are possible. Who knows? this time next year you may be looking on this as the best thing that has ever happened to you.lots of luck.

kel

iVillage Member
Registered: 05-30-2003
Mon, 08-29-2005 - 3:27pm

Welcome here!

Here's another vote for selling the house and downsizing. It sounds like you're being pro-active about the whole thing, rather than waiting for the owrst to happen, which is great.

If the equity in the house is enough to pay off some of your student loans, I'd say go for it. Yes, the tax-write off is nice, but the added income/reduced financial stress every month would be better. You can always get a tax-break by putting the money in retirement plans.

I know it's all overwhelming right now, but your situation isn't hopeless. And, we're a good bunch to hang out with!

Lisa