I got motivated and that push I needed by Freelee's advice and video "How to become a SLAVE to the system." Would appreciate any advice that you may give me.
After graduating college, I will be around $20,000 in debt. Any advice as to how to pay it off quickly and as painlessly as possible?
I plan on graduating at the end of this semester (wish me luck and positive vibrations so that I don't have to take an extra semester at this university; I really want to just get out of here and graduate with my peers) on May 2012. In fact, screw it, I AM GOING TO GRADUATE. GOING TO MAKE THIS HAPPEN. Afterwards, applying to a dietetic internship, doing the dietetic internship for 6months-1year, passing the national exam, and becoming a nutritionist.
Here's my thoughts if this fails hardcore:
Tags: LFRV, college, debt, graduation, life
Permalink Reply by Greenmama on This only applies to federally guaranteed loans. So, if the gov't owns the loans then no bankruptcy. If they are private then bankruptcy is possible.
Permalink Reply by Greenmama on Bankruptcy is more difficult in the US. You have to pass a means test, meaning that the courts will look at your income, your assets, and your debts and determine if they believe you could pay them off. (And they certainly won't take into account the cost of a fruitarian diet in their calculations!). Depending on their findings, you may not be allowed to do a chapter 7, which totally discharges the debts, and instead will be put in a chapter 13, which makes you repay the debts. Most chapter 13s fail because the repayment plans are unrealistic.
Many people in the US have government subsidized student loans and these will not be able to be discharged in bankruptcy. Call your student loan servicer to find out whether your loans are federally subsidized.
Bankruptcy has a "stigma" but in actuality, no one will know who matters, and those who will know, have seen it before. And it does not ruin your credit for long. Ideally, you would want to transition away from the use of credit anyway.
Here, bankruptcy will drop off your credit report in 10 years. All other negative accounts will drop off after 7 years. But creditors and collection agencies have gotten wise to this and found a loophole. They simply transfer collection accounts from agency to agency, creating a new negative entry on your credit report each time, dropping your score more and giving the debt a new date, essentially restarting the 7 year clock.
As an alternative to bankruptcy or repayment, you could simply not pay your debts, move to the tropical country and live on cash forever.
Permalink Reply by Greenmama on Well, I didn't say I had it ALL worked out, now did I? ;) If I did, would I be living in Northern Illinois year-round? LOL!
Maybe she could talk to other entrepreneurs like Chris Kendall.
Permalink Reply by Celia C (Ana) on You're lucky, they closed that loophole in the UK in 2004. After leaving uni I didnt even think about the loan as everyone I knew had one or was about to get one! Stupid!
Permalink Reply by Derek on Well the RBC bank here in Canada had a special loan for engineering students. They gave me a credit line of $55k and a $5k credit card. They were banking on the fact that I would pay the loan back since I would end up being a professional engineer at the end of my 4 years of education.
I had to give them nothing for the loan except my signature. I didn't have to put any money down, no house, no cosigner. That's right, I was 18 years old, NO CREDIT and a bank gave me a 55k credit line with no cosigner. Sounds awfully risky of the bank eh?
Now if I had of gotten a loan through the government of Canada called "OSAP", I would not have been able to declare bankruptcy and had that debt cleared.
You call it luck... I call it the devine plan ;)
Permalink Reply by liliaceous on yeah, they closed that loophole in the US recently, too. Also, private banks are no longer allowed to issue student loans, so it's just the government...and they will not let you out of it, bankruptcy or otherwise
Maybe fake your death? Save some cash and bribe an official in Costa Rica for a passport?
Permalink Reply by Greenmama on Again, they are not sending people to prison for not paying their debts. A huge percentage of people default on their student loans. The only thing that happens is that you get a bunch of phone calls from debt collectors (that is easy to stop--google the Fair Debt Collection Practices Act) and you can't borrow more money--which is probably a good thing!
If you have significant wages, they can sue you and garnish your wages. But if you had significant wages, you'd be paying back the loans, wouldn't you?
Permalink Reply by For_The_Love_Of_Fruit on wait but could you ever open a new bank account afterwards? where can one get info on bankruptcy? And don't they like take your house and everything you own when you go bankrupt? I'm puzzled...
Permalink Reply by Derek on There is more than one bank in Canada. I have two bank accounts and a credit card.
Read my other posts above, I didn't have any assets for them to take.
Get in contact with a local bankruptcy lawyer.
Permalink Reply by Greenmama on No, you get to keep your house, so long as you are able to pay the mortgage. If you are behind on the mortgage, it can get a little complicated. I work for a nonprofit housing agency, and suggest that you find one of those in your local area to help you if you are facing a situation like that. If you file bankruptcy, you are also allowed a vehicle to get you to work, but there are some rules about that. If you have assets over $2500, they can be seized, but not your personal belongings.
Also, you can keep your bank account, assuming that you do not have some sort of overdraft or other debt that you are discharging with the bankruptcy.
Typically, people who have declared bankruptcy do not have any problem getting standard bank accounts UNLESS they have a history of bounced checks and overdraft charges. Banks have their own credit reporting system that they run people's names through when they open an account. This only looks at a person's banking history (overdrafts, bounced checks, stuff like that). They don't care if you've had those, so long as they got repaid and their enormous fees paid. Actually, they like a customer that bounces checks at $29 or more a pop for overdraft fees. They only prevent you from getting an account if you haven't paid a bank back.
It is hard to get good info on bankruptcy, but not impossible. In general, a local nonprofit Consumer Credit Counseling Service (CCCS) is a good place to ask for info (Google search--you'll find a lot of them). However, some of those places are heavily pushing their debt consolidation plans, and think hard before you sign up for those plans. Work out your budget on paper for yourself to make sure you can really make that work. And make sure you've made plans for what you'll do if you have an emergency expense. You can also usually consult with a bankruptcy attorney for free, but sometimes unscrupulous lawyers tell you that you will probably qualify for Chapter 7, when they know you will get stuck with a Chapter 13.
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