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Why Should I Pay My Student Loans? I Didn’t Get My Degree. – Katherine

By on March 2, 2010
Why Should I Pay My Student Loans? I Didn’t Get My Degree. – Katherine

“Dear Steve,

I make very little money have one credit card in default that is suing me for 1700 dollars. I also am about 400 behind in my sale mae loans and have 50 thousand in private student loans.

How do I deal with the card that is suing me? Is it to late not to go to court? I can afford to give them about 400 dollars now.

Can I declare bankruptcy fo get rid of my private student loans? I have no degree yet and can not afford to pay these loans to be able to go back to school. Seems unjust that I can t make enough money to pay these debt back because I don;t have a degree but I can’t finish until I pay the debts

Thank you very much,

Katherine”

Dear Katherine,

If you can’t come to an agreement with the lender suing you for the credit card debt you’ll have to go to court and let the chips fall where they may.

On the student loan, you might have to rethink your position on those loans.

Student loans are not a guarantee for a degree. In fact nearly 75% of students that take out student loans never complete their degrees and are left with residual debt. Student loans pay for the individual classes that can lead to a degree but unless you finish the degree the money could be viewed as wasted. You are still fully responsible for the debt and it can’t be discharged in bankruptcy unless you could prove undue hardship and pay for a Chapter 11 bankruptcy proceeding. Even then it’s not guaranteed to be able to be discharged, but that’s the only route to discharge it.

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About Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

2 Comments

  1. katherine

    March 2, 2010 at 8:47 pm

    Steve,

    Should I call the CC company and try to work something out? I have read that I should not contact them. I would like to just minimize the damage at this point and not have to have it hanging over me.

    I understand about the student loans never going away. I would just like to be able to complete my degree so I have a shot at getting a job that would allow me to make the payments but I can not since there are holds placed on my records because I can not currently afford to pay them.
    I feel like I am trapped in this way.

    Thank you so much for you help. I really appreciate it and the big hug.

    • Steve Rhode

      March 2, 2010 at 10:45 pm

      Katherine,

      Give them a call. It can’t hurt. Just don’t make a promise to pay that you can’t afford.

      Steve

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