Monday, November 25, 2013

My husband is in default for school loans totaling close to 200K.?

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He hasnt been able to make payments on these loans for over a year. Even though he makes good money as an attorney living in our area is so expensive its impossible to pay off the loans until he starts making more money which could take a couple more years. Some of the loans are government and some are private. Will these banks take a minimal (I mean really minimal) payment and bring his accounts current? HELP!


Answer
I know you live in an expensive area, but you're going to need to cut your expenses in order to put money toward these payments. What are his loan payments? They're probably $2,000 or more per month, right? You need to find that money - and perhaps more, because now he has penalties from being in default.

I understand that you live in an expensive area. So do I - one of the most expensive in the US. There are things you can do to cut costs. None of them are pretty, but there are things you can do. Not sure what you've already done, so I'll throw out some examples as potential options, in case you haven't already considered them.

Kill the cable tv/satellite. Get rid of cell phones, or go down to a lower plan. If renting, move to a smaller place, or one in a less-desirable location. Sell the house, if real estate in your area is moving, and move into a cheaper rental or buy a cheaper place. Stop eating out, if you do so. Learn to cook cheap, healthy meals (rice and beans, for example.) He brings a bag lunch to work, even if that's "not done" - he'll eat it outside if that's true. No movie nights, unless you get the DVD from the library. No nights out. Buy nothing unless it's an absolute *must*, and be harsh with yourselves re: what those are. Cut all luxuries, and cut necessities to the bone. Maybe even move back in with parents, if that's possible. Since as a young lawyer, his hours are probably long and unpredictable, he probably can't take a traditional second job, so could you? All that income goes to his loans. As a JD, he could teach for an online university as a adjunct (online is flexible re: times - he could do it at midnight if needed.) Harsh measures, not pleasant, but necessary. You can't live like others do right now. You've got some special problems.

If he can begin making payments on these loans, and keeps them current for six months, they should move out of default. Once they move out of default, he might (might being the operative word) be able to extend the life of the loan to 30 years, to lower his payment. This does have repercussions, though - he'll owe more, and he'll be paying this debt when your own kids, should you go that route, are in college.

He can try to work with the lenders now to see if he can negotiate a lower payment. He's in default, so they don't have to agree to this - they could, in fact, demand payment in full, immediately. But he should at least try. But he's a freekin' lawyer - he knows that he can't just not pay these. They will garnish his wages (which at a law firm... I don't know what that would do to his career there) and take his tax refunds. He has already ruined his credit, which in some fields of law, can prevent him from getting hired at a new firm, should he need to.

searching for gift ideas for christmas?




Karl


I am starting to look for christmas gifts for my family and I am stuck on what to buy them. My dad is a avid wine drinker(any wine recommendations), My mom likes to read(any good mystery novels to recommend), my sister is a high school teacher and she loves anything about Africa, and my niece is 10 and she loves to read. I know that this is probably a little vague, but if you have any suggestions I would love to hear them.


Answer
For your dad
-a wine/cheese board with a bottle of wine and some cheeses
-a wine tasting party kit (available at Chapters)
-a bottle of expensive wine....check out the back of LCBO and budget about $50 you can get a great wine, but if you don't know what you're looking for ask for help, even at that budget you can get a crap bottle. You're pretty safe with Chateauneuf du Pape, though it might be a little more than $50 depending on what you're buying.
-a book on the history of wine

For your mom
I also like mystery's and the JD Robb series is fantastic, anything by Elizabeth George, PD James, or Janet Evanovich.
Alternatively you may like to buy her two or three of these in paperback and the year long discount card from Chapters so she can buy her own all year long with a discount....it's the gift that keeps on giving {;o)

For your sister
-a coffee table book about Aftrica
-a school bag filled with school supplies for a child in need in africa (visit the World Vision web site to purchase this)
-a gift box of items from Body Shop who also give money and support fair trade with 3rd world countries.

For your niece
There is a series of books, perfect for her age....A Wrinkle in Time, A Swiftly Tilting Planet, A Wind in the Door, and there is a 4th one actually but I've forgotten the name, they're all by Madeleine L'Engle and they're really good.
Or if she likes mysteries as well you could start her on the Nancy Drew series.

Good luck!




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