Personal financial help for student loans and taxes?
June 18, 2014 7:35 AM   Subscribe

I need some financial planning / loan help. I graduated from grad school a year ago, and I'm getting my life together. I'm doing well professionally, juggling freelance gigs -- this doesn't necessarily mean I'm paid well, but I'm happy and fulfilled with what I'm doing. But my personal finances are a total wreck, and I need a professional to help. Who should I be looking for?

My personal finances are a wreck - I have $5k in credit card debt, $100k in student loans, and I haven't paid my taxes in the last two years (not that I had much income in the last two years). I'm paying rent and slowly paying off my credit card debt, and am focusing mostly on creating a two-months-living-expenses emergency fund before I do anything else.

Now, I'm getting emails threatening to send my loans to a collection agency. I need some help learning and organizing the myriad paperwork of borrowers, taxes, forms, etc. I'd like to do income-based repayment, but the bureaucracy of paperwork and all this is taking way too much time, and I'm up to my neck in my own work anyways -- I barely even have weekends. I'm usually good at this kind of organizational paperwork / numerical stuff, but because I'm dealing with so much stuff during the day anyways, I can't seem to handle it right now.

I'm based in NYC. Should I be looking for an accountant? Someone who specializes in income-based repayment and student loans? I really don't have that much cash to spare, but I think it's high time to get a professional involved - ideally someone who is understanding, helpful, and judgment free. Do you have any personal experience in my situation?

My throwaway email is

Thanks so much!
posted by anonymous to Work & Money (4 answers total) 7 users marked this as a favorite
Start by looking for a low-cost or free credit counselor. The link has guidelines, but perhaps someone here can recommend a specific organization in NYC. On the tax side, look for a Volunteer Income Tax Assistance (VITA) site. These are usually only open in tax season, but I'd guess that somewhere in the city there's a tax assistance program that runs year-round.
posted by Mr.Know-it-some at 7:47 AM on June 18, 2014

Maybe you already know this, but it took about ten minutes to apply for IBR for my federal loans. IIRC, you apply through the company that is handling your loan repayment- mine is Nelnet, for example. I think you need information from your tax returns to demonstrate your income and thus your level of financial hardship, so the first step would be figuring out your tax situation. If you get that figured out though, applying for IBR is pretty straightforward and doesn't require any extraneous paperwork.
posted by MadamM at 8:06 AM on June 18, 2014 [3 favorites]

I haven't paid my taxes in the last two years (not that I had much income in the last two years).

I think you can do this yourself.

Do your taxes first. You can probably do 1040-EZ. You may be surprised, but if you're in a very low bracket, the government may owe YOU money. Once you get your W-2s together, it will probably take you 4 minutes to file online. Even if you end up owing (and I doubt you will) you can call the IRS and make a payment plan with them. I've done it, the interest levels suck, but I paid them back and it's never been a problem and it didn't go on my credit.

As for your loans, I understand that you're overwhelmed, but that's just because you've never done it. Trust me, you want to be a financially savvy person, and understanding your own finances is a gateway to that. The first form you do will take you 2 days, the second 2 hours, the third 45 minutes. That's just how things work.

You know how jailhouse lawyers know all about their case and their crimes? You're going to be a jailhouse financial expert in your loans, your taxes and your debt. But that's okay.

I KNOW that you can do this. I was a financial mess at one time, and then I decided that I didn't want to live that way anymore, so I made changes.

There are three books that I can suggest to you:

The Money Book for the Young, Fabulous and Broke-Suze Orman

The Total Money Makeover-Dave Ramsey (He's kind of a tool and the bilblical stuff is hard to take, but the information is solid and I really like the plan.)

Your Money or Your Life. This one is just so different and strange, but it's very powerful and it can show you how spending and saving are two sides of the same coin and yet can have very different impacts on your life.

Good luck to you. I will tell you that money problems are temporary. You won't always feel strapped and you won't always feel overwhelmed. Even just getting it all down on paper, and having a plan of attack will make you feel so empowered and happy, you'll never want to go back to having your head in the sand.
posted by Ruthless Bunny at 9:26 AM on June 18, 2014

Ruthless Bunny gave some solid advice. I work with people and their personal finances every day. There is only one thing that separates the stable from the unstable, and it has nothing to do with the amount of money someone makes: If you make it a priority, you can get it all sorted out.

Lock yourself in a room with a computer for 3 hours, make a list, and dig in. definitely do those taxes first. Definitely! If you have self employment income from doing those side jobs, and are terrified by the prospect of figuring it out, find a small local accountant and have them help you file.

For the student loans; figure out a way to make the payments. A graduated plan, where the payment starts lower and increases over time, or the income based option you mentioned is good. But you have to make it a priority!

Student loans never, ever go away unpaid, so the sooner you figure out how to deal with them, the better.

Good luck!
posted by flyoverme at 9:51 AM on June 18, 2014

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