Ask a goalgami Expert:Answer

Have a financial question?SUBMIT>



Question:


I have $100,000 of student loan debt from a degree in music. I have been self-employed for 16 years
-Steve Kennedy


Answer:


I have $100,000 of student loan debt from a degree in music. I have been self-employed for 16 years and used deferment and forbearance, hoping things would improve. The most I have earned in a year is $19,000, but my loan holder uses my tax return, which shows $52,000 of income, including what my spouse earns. I offered to make partial payments, but they said I would default eventually. What can I do?

A: This is taken from a much longer question that mentioned credit-card debt in addition to the student loan. My first thought is that if the loan holder goes by the income on your tax return and your wife makes most of the money in your family, then why not change your status to “married filing separately”? I don’t know the conditions of your loan beyond what you described, but it seems as though only your meager personal income would be taken into account if you did that. If that’s the case, then you should be eligible for any deferment conditions based on an inability to pay.
If you could reduce or suspend your loan payments, it would give you an opportunity to work off the credit card debt, which would then leave you with more money to start whittling away at the student loan balance. It’s hard to suggest a firm course of action without knowing the terms of your loan and other personal details, but a good first step in digging your way out of your situation would be to talk to a nonprofit debt counseling service that can help you craft a feasible, concrete plan. To find one, try the National Foundation for Credit Counseling (http://www.nfcc.org) or Consumer Credit Counseling Services (http://credit.org/cccs). Good luck.

-Conrad de Aenlle



< BACK