New to fourm, need help.

[oneday]

Hello, Im 25 and financially my life is a mess. For what ever reason , I am deciding to deal with it now. I have a worthless degree ( any BS/BA is worthless IMO) I live in Oregon, and I make $16,000 a year. I own my car but it will break any day now, and I have no credit cards.

Before I can really take steps forward I need to fully understand what im up against and what tools I can use to help me.



*I owe $31,000+ in federally backed student loans, some subsidized some not. All in deferment now, but not delinquent, i kept up with my $360+ a month payment for about a year.


*I owe $19,000+ in private chase student loans ( original amount was $17,000 so I'm losing the interest fight here)

*Then Oregon State University..... says I owe them money, which I disagree with. It was Originally a $6000 debt that i paid down to $2000, I was unable to make payments and neglected it, it went to collections, and now is at like $9,000........ Id rather file bankruptcy or die than pay OSU money they don't deserve or didn't earn.

This is not a loan debt, its a bill, for dorm space I never used and classes that I already paid for minus the ridiculous interest rate that i never agreed to.

If you have read this far I thank you and here is my first question,


Is it true I can just wait 6 years and this OSU debt will go away. Currently my state tax refund is withheld but not my federal, and it goes to this stupid osu debt. Would it be 6 years from my last payment, last time talking to someone, or from the time it was issued?

[Weird Tolkienish Figure]

Hello, Im 25 and financially my life is a mess. For what ever reason , I am deciding to deal with it now. I have a worthless degree ( any BS/BA is worthless IMO) I live in Oregon, and I make $16,000 a year. I own my car but it will break any day now, and I have no credit cards.

Before I can really take steps forward I need to fully understand what im up against and what tools I can use to help me.



*I owe $31,000+ in federally backed student loans, some subsidized some not. All in deferment now, but not delinquent, i kept up with my $360+ a month payment for about a year.


*I owe $19,000+ in private chase student loans ( original amount was $17,000 so I'm losing the interest fight here)

*Then Oregon State University..... says I owe them money, which I disagree with. It was Originally a $6000 debt that i paid down to $2000, I was unable to make payments and neglected it, it went to collections, and now is at like $9,000........ Id rather file bankruptcy or die than pay OSU money they don't deserve or didn't earn.

This is not a loan debt, its a bill, for dorm space I never used and classes that I already paid for minus the ridiculous interest rate that i never agreed to.

If you have read this far I thank you and here is my first question,


Is it true I can just wait 6 years and this OSU debt will go away. Currently my state tax refund is withheld but not my federal, and it goes to this stupid osu debt. Would it be 6 years from my last payment, last time talking to someone, or from the time it was issued?

At $16000 annual income, you should be able to get on income based repayment (or PAYE) and you should pay $0 a month, and that will be legitimate. Google direct loans and call them. You will have to consolidate your loan and get on IBR or PAYE.

As for private loans, 17K isn't that much, believe it or not, you will have to see if they will work with you. At $16K you're pretty much "judgement proof" but it might be easier to work with them. Note: IANAL.

I cannot comment on state laws, but see if they have some sort of "income based plan" (many states do). If they are garnishing your tax refund at the state level, my guess is they are modeling their own state level student loan plan, so they might have some sort of program for you.

By paying the loan you have basically admitted, legally at least, that you owe it unfortunately. At 16K income, again, you might be "judgement proof" and maybe you can ride it out to outlast the statute of limitations in your state? SOL is an affirmative defense, meaning if you are sued later on you will have to show up in court and plead it, if you don't show up in court you will lose the case by default.

Again, NOT A LAWYER.

Sadly with your income, you probably needn't have paid the federal loans a dime, and still be in perfectly good standing, if you went on one of these income based plans, you could have attacked the private and OSU loans solely. Lesson learned hopefully.

When you credit improves, you can start putting some of this debt on no-apr credit cards as a strategy, but not with bad credit unfortunately.

[Petunia 100]

What are you prospects for a better paying job?

[LittleMissSplendid]

At $16000 annual income, you should be able to get on income based repayment (or PAYE) and you should pay $0 a month, and that will be legitimate. Google direct loans and call them. You will have to consolidate your loan and get on IBR or PAYE.

Just to add to this.... you are not required to consolidate your loans in order to get IBR (I am not sure about PAYE since I didn't go that route). I have more than one federal loan (totaling about twice yours OP) and given the differences in interest rates it wasn't cost effective to consolidate, so I didn't. When I wanted to apply for IBR I was told I had to do separate paperwork for each loan, but they consider the grand total of all my loans versus my income when deciding if I qualified. My income was a little less than yours OP and I qualified for a $0 monthly payment on all of them, so yes I strongly recommend you consider this route. While your paperwork is pending they can give you an estimated range of what your payments will be with $0 being the lowest.

I'm not a lawyer either but regarding that OSU debt, I think its time you get over yourself and deal with it. Waiting 6 years for it to hopefully "disappear" according to state law isn't going to work if they're already garnishing your tax refund. Garnishing is often considered you actively paying it and if I were you I'd be concerned about them garnishing other things like your paycheck. It's time you get on the phone with them and figure out a payment plan so you can pay it off and move on. Clearly they disagree with your claim that you don't owe them anything and they might be willing to negotiate down from the 9k given your income.

The private loans you will also have to call, explain your income circumstances and other debts, and hope that they'll work with you. They don't have all the options that federal loans do, but they may have something that works for you.

As for your car, are you able to go carless and still get work via public transit/bike/walk? Is it possible to get a second job to help boost your income and save up enough for a gently used car and chip away at your debt?

[FifthElement]

Hello, Im 25 and financially my life is a mess. For what ever reason , I am deciding to deal with it now. I have a worthless degree ( any BS/BA is worthless IMO) I live in Oregon, and I make $16,000 a year. I own my car but it will break any day now, and I have no credit cards.

Before I can really take steps forward I need to fully understand what im up against and what tools I can use to help me.



*I owe $31,000+ in federally backed student loans, some subsidized some not. All in deferment now, but not delinquent, i kept up with my $360+ a month payment for about a year.


*I owe $19,000+ in private chase student loans ( original amount was $17,000 so I'm losing the interest fight here)

*Then Oregon State University..... says I owe them money, which I disagree with. It was Originally a $6000 debt that i paid down to $2000, I was unable to make payments and neglected it, it went to collections, and now is at like $9,000........ Id rather file bankruptcy or die than pay OSU money they don't deserve or didn't earn.

This is not a loan debt, its a bill, for dorm space I never used and classes that I already paid for minus the ridiculous interest rate that i never agreed to.




Is it true I can just wait 6 years and this OSU debt will go away. Currently my state tax refund is withheld but not my federal, and it goes to this stupid osu debt. Would it be 6 years from my last payment, last time talking to someone, or from the time it was issued?

Hello. I am new to the forum too, so I wanted to say welcome. Please do not feel terrible about your financial situation, it's happening to millions of us right now. So far, everyone here has been really helpful!

1) You say you do not have any credit cards. For right now, that is a good thing. We can revisit that later.

2) The issue with OSU, you stated they have you in Collections: do you know if the Collections is in-house or a third party? Have you contacted them about a settlement offer? This is normally when you agree to pay a certain percentage of the debt instead of paying them in full.

- For debts, it is normally 6-7 years from your first delinquency. But you'll need to pull your credit reports to see if the state is reporting this to the bureaus.
-If you can get on a payment plan or agree to a settlement offer, they may still take your state refund. BUT...if you are making payments in addition to, they may take less of your refund, or nothing at all.
-Do you still have receipts for everything you paid at OSU?

3)For the Chase student loan: have you contacted them about a payment plan?

4) Have you pulled your credit reports? You get one from each bureau for free once a year.

5) Have you thought about a budget? Since it's the end of the year, this is the best time to start researching different budgets and adopt one that is good for you.

[hamchan]

It's never a bad idea to talk to a bankruptcy attorney. Most of them do a free consult, and they can often give you a good strategy even if bankruptcy isn't your best option (in your case I don't know if it is, but talking to attorney is the easiest way to find out). It may even be worth it to talk to a few of them. They will be able to tell you if waiting out the statute of limitations is your best bet or not.

I too found myself in a very similar position as you about 12-13 years ago. I would strongly advise giving some thought to going to some sort of trade school. Find something with a lot of job openings in your area that will take you a year or less to complete, and do it, even if you have to take out more loans. As long as you move into a field with a strong job market and decent pay you will be better off than you are now, even with the additional loans.

Alternatively, I know a lot of people who have done really well working for large healthcare/insurance companies doing office work. They often don't require a degree at all. My husband makes about $20 an hour answering phones and training new hires, and he gets good benefits too. There is a lot of room for promotions at the company he works for too. He has gotten several in the time he's been there. He does have a BA, but it's in a totally unrelated field.

[Randomsaver]

I was in a mess financially up to age 26. No savings All debt. But I can say those years right after graduating from college up to 26 were the best. I figured I'd enjoy my life after all those years of schooling and have no responsibility for a change.

Then, at age 27, I looked at my financial situation and created a 15-year plan to pay them all off -- incurring new debt only when I paid off existing ones.

After 15 years I'm down to just my mortgage.

Nothing special happened with me. At age 27 I was earning minimum wage; at age 33, I was earning $42,000. At current age of early 40s, I'm still a rank and file in my company.

I just let Father Time take care of slashing off debts each year.