How bad are these debt problems?
August 21, 2013 6:37 PM Subscribe
YANM financial advisor. My domestic partner has a large student loan that has been in default for years. Like many in the current economy, he was unable to make payments for many years after graduating (at least 5) due to lack of steady income. Now he has a Good Job (yay!) and could afford to make payments, but it's been almost 2 years now and he hasn't made progress on dealing with the debt. How bad is this?
posted by anonymous to work & money (4 answers total) 2 users marked this as a favorite
I've purposefully stayed mostly out of it. We have a joint account for household expenses but are not married and this is his responsibility to fix. However, I've noticed that he seems to feel a lot of anxiety and paranoia about the loan, and when I've suggested that he just call them and work out a payment he can afford, he's said that he won't talk to anyone without a lawyer.
Perhaps this is wise, as the debt's been passed around all over the place and who knows who is asking for money at this point. It's entirely possible that he has some rights here that a lawyer could help with. The only real issue then is that he seems to have no idea how to find said lawyer, or how much to expect to pay to get back in good standing.
My question is, is this going to become a major problem for him if he doesn't take care of it soon? Or is it fine for him to take it at his own pace with relatively little consequence? I know there are probably a lot of student loans in default in this country right now, so maybe this isn't really a big deal, but my own student loan debt was much smaller and is almost paid off so I don't have a good sense of what can happen in a situation like this. (And yeah, obviously this annihilated his credit, so that's a known downside, but he was dead broke for 5 years so that was in some ways inevitable.)