How Much Do Americans Save

[CHH1023]

How Much Do Americans Save

This is sad.....

[Seeker]

Yes, but couple that article with this:

Census: 1 in 7 Americans lives in poverty - Yahoo! News

[CHH1023]

so, one of my former roommates who just "moved" out back in August stopped by yesterday to pick up his letters.

I've been receiving several of his letters from student loan companies, because he didn't change his address after he moved out. He is currently live in his van/crash at his friends' place. He told me I should just return the letters to the senders.

We've had a discussion earlier this year about him not pay back his student loans, he already changed his cell phone number, he doesn't have an address anymore and he even mention about move to a different state so it would be harder for debtors to track him down (or delay loan payment as long as possible).

If I remember correctly, he said he will not get in trouble if he never "receive" the letters from them (in fact, I've received several of his letters and he just threw them in the trashcan without opening it).

He is in debt for about 10~15K (both credit card debt and student loans).

Should I call the loan companies and tell them what's going on or should I just stay out of this?

[disneysteve]

Originally Posted by CHH1023

Should I call the loan companies and tell them what's going on or should I just stay out of this?

I'd stay out of it. What can you tell them that they don't already know? They are sending bills and he isn't paying them. They already know that.

[Joan.of.the.Arch]

Your former housemate is also fooling himself about avoiding trouble simply by not looking at the bills. All the interest and any penalties continue to mount.

[disneysteve]

Plus student loans aren't bankruptable so he will have to deal with them eventually.

[Cassius King]

He's about to discover the power of compound interest the wrong way.

[Coronet]

That's a scary figure. It makes me want to save even more to beat the statistics.

[CHH1023]

Originally Posted by Coronet

That's a scary figure. It makes me want to save even more to beat the statistics.

I'm currently saving 20% of my monthly income..so I guess it's average.

[CHH1023]

Originally Posted by disneysteve

Plus student loans aren't bankruptable so he will have to deal with them eventually.

Ahh I didn't know that. Would it become default if he keeps delaying his payment? I have talked to him several times before and he simply said he will never be able to pay them back (even with mthe minimum payment) that's why he decided to just ignore it.

[disneysteve]

Originally Posted by CHH1023

Ahh I didn't know that. Would it become default if he keeps delaying his payment? I have talked to him several times before and he simply said he will never be able to pay them back (even with mthe minimum payment) that's why he decided to just ignore it.

I think they can garnishee his wages at some point, especially for federal loans. I'm not sure of the details so don't quote me on that, but they definitely aren't bankruptable. I'm sure of that. At the very least, not paying will wreck his credit so if he goes to buy a house or take out a car loan, he's going to be out of luck.

[Cassius King]

Originally Posted by disneysteve

I think they can garnishee his wages at some point, especially for federal loans. I'm not sure of the details so don't quote me on that, but they definitely aren't bankruptable. I'm sure of that. At the very least, not paying will wreck his credit so if he goes to buy a house or take out a car loan, he's going to be out of luck.

They can garnish tax returns if they exist as well.

With the amount of penalties and interest he's going to be racking up on his student loans, he's going to end up paying a TON more than he initially took out.

[Seeker]

Here's is what normally happens.

Avoided student loans always come back to haunt that person. The loans are based on SSN, so as soon as that defaulter earns in a non-cash manner, they become trackable.

The loaning companies can and will pursue when they find a match and they suspect or can verify that there might be assets or wages that may allow them to collect.

Student loans do not go away and AFAIK, there's no SoL (statue of limitations).

Generally there are two paths available once they find a defaulter through SSN.

1) They can deal with the defaulter direct, or
2) They can pursue the legal avenues available (each states rules differ slightly) to document, pursue in court and provide for garnishment of wages.

The defaulter may not know that he or she has been found until, they either, (if path 1 was choosen) get a call from them, or (if path 2 is choosen) they get letter from the employeer that his or her wages will be garnished for past due student loans. The employer, by law, must comply with a writ of garnishment.

Also note that when a student loan goes into "default" it is quite likely that he or she will be paying outrageous interest rates (along the lines of 18% or even more) for a period of time.

Generally path 2 is more expensive, since it has to be pursued in court. Usually they are pretty certain of their information and of the fact that they will win their case. Garnishment then happens; and that letter will often be the first notice that the defaulter gets.

Generally path 1 is chosen if there's any question about collectability. The debtor may be "judgement proof" if they do not earn what is considered a living wage.

If path 2 is taken, the defaulter can petition the court with a "claim of exemption" if he or she is unable to pay rent, food, etc. because of a "writ of garnishment." But the court will go through the financials thouroughly before granting any exemption.

Ignoring them (student loans) is never the answer. They can have the wrong address forever, or the wrong phone number, it will not stop interest charges from growning and compounding his debt.

*note added:
Oh CHH, I would not contact the SL agency; stay out of it with them. But I would advise my friend that if his financial situation ever does turn around for the better in his future, that he should be prepared to make amends on this ASAP. It will only grow otherwise.

[Seeker]

Originally Posted by CHH1023

He is in debt for about 10~15K (both credit card debt and student loans).

You probably don't know how much of the above is Student Loan debts versus the CC debts... but if he can pay $'s toward any of the Student Loans debts, he might well be advised to concentrate on those first.

The CC debts do have SoLs if they have not been able to "extend" the SoL (each State varies here too).

But if he pays on the SLs, it's likely the CC people will "find" him too.

Know that it can take as little as 10 years (if that) for Student loan amounts to double when in "default."

[CHH1023]

Originally Posted by Seeker

You probably don't know how much of the above is Student Loan debts versus the CC debts... but if he can pay $'s toward any of the Student Loans debts, he might well be advised to concentrate on those first.

The CC debts do have SoLs if they have not been able to "extend" the SoL (each State varies here too).

But if he pays on the SLs, it's likely the CC people will "find" him too.

Know that it can take as little as 10 years (if that) for Student loan amounts to double when in "default."

the guy just recently lost his part time job and now he's working for his uncle for cash.

[esterdsl]

So, if are not saving as much as the Chinese people,we are living happily with no grudges for the past day and no preparation for the future .....who has seen the future?

[CHH1023]

Originally Posted by esterdsl

So, if are not saving as much as the Chinese people,we are living happily with no grudges for the past day and no preparation for the future .....who has seen the future?

I think it was that kind of attitude got us into this huge debt as a nation...something needs to be changed as soon as possible or this country will definitely go bankrupt within the next 40 yrs.

[Sissta2009]

Originally Posted by CHH1023

I'm currently saving 20% of my monthly income..so I guess it's average.

Yeah same here - and from NC as well, interesting...