Before you apply for another credit card, student loan, car loan or any other kind of loan, I beg you to hear me out. I have a tale that I am certain is not too uncommon for the masses; and it's not pretty, either. It's a tale of how I got myself into the kind of debt that makes one contemplate suicide; particularly when you are not in a healthy state of mind to begin with.
My story begins in 2004, when I decided to return to school. At the time, my then husband, encouraged me to take out as much as I could in student loans. I kept asking him, "Are you sure?" Clearly, at this point, a normal individual can see that I was not in a good frame of mind, I trusted him and also, I had no financial knowledge. He said "yes." And so, I did.
I have to confess, having a few extra dollars in the bank made life easier for us. However, in the back of my mind I kept wondering how we were going to pay all of it back? I was going for a Master's degree in Special Education but having no education background, also had to take about an extra 40+ hours in coursework. I trusted he had a plan. I was wrong.
In fact, we divorced in 2013, making this story even more frightening. I had little income at the time, making $38,000 and probably, $150,000+ in student loan debt. I never used credit cards much so fortunately, I only had about $1,500 in that sort of debt and only because of interest that was mounting. No, the lion's share was and is, the student loans. However, in 2015, I received a legal notice on our house in St. Louis, which had been foreclosed on in 2012. Another legal wrangle. And so, I filed bankruptcy as I could not, despite working 3 jobs and receiving spousal support afford any other payments.
2016...spousal support stopped coming in April and consistently from June forward. I was eligible for a Chapter 7 bankruptcy. Mind you, student loans are excluded from bankruptcy -- however, it did buy me a little time to catch my breath.
2017, the loan repayment amounts are now being re-billed with interest for the year and a half that I did not pay on them -- and they are massive. $175,000! I am frustrated because my ex has flown the coop for his home country, and a group of loans are a spousal consolidation -- which are now illegal. Although the interest rate is low, the spousal consolidation has excluded them from any loan forgiveness, despite the fact I am a public servant. They have never been paid on time because -- I'm sorry to say -- my ex is a deadbeat and never paid our bills on time. And so, as I stare at a payment of $1200/month, I am sick to my stomach. I bring home $1600 every two weeks. The other two loans are just over $400 which means, I get to keep one whole paycheck.
The truth is, I used the money at the time but because of intimidation, lack of self-esteem and insufficient knowledge of how money and debt works, I ended up with a whopping amount of debt that I will probably never be able to pay off.
Fortunately, I am no longer at the point where suicide seems like a viable answer. I have in fact, taken charge and am using every means I can to see if it is possible to reduce the payments. It is, at best, a horrific mess.
At the time, my gut kept saying "no" but I chose to listen to my then-spouse. It is a hefty price I am paying because I was too emotionally battered to understand the enormity of what I would be left with if we ever separated. Although this story does not have a happy ending, such as money dropping from the sky or that I become the benefactor of some unknown estate, it does have some positive points. It allows me to tell my story. So before you decide you want to "establish" credit by getting five credit cards, decide -- do I need it? If you can't pay cash for it, perhaps you really don't.
If you are back in school -- do it the most economical way possible -- not the easiest way possible. Although I worked through school, I probably should have had a higher paying job or gone for a career that pays more than a little over minimum wage to start. Use student loans for tuition not for life. If I can help one person who is in a situation where they are intimidated by their spouse ie: emotional abuse, or have helped them understand the burden of debt, then I have done my job. Take Dave Ramsey's course Financial Peace University. It will teach you a lot about money. I wish I had taken it in my 20's. Instead, I am nearing retirement age, with no retirement in sight. Before you reach for those new pair of shoes, just remember...buyer beware!
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