bankruptcy

[Kevin]

Originally Posted by fascination

He gives good common sense advice, has a step-by-step plan, and encourages people to negotiate with creditors to settle bad debts for less than owed -- but ONLY IF you honestly can't pay what you owe. He never wants you to file bankruptcy unless yu are absolutely forced to do so, like if someone sued you and has attached your wages so badly that you can't buy bread. Dave hates debt, and he especially hates student loan debt.

FYI, some guy called in to his radio show the other day and said his wife has $160,000 in student load debt. He wanted to know how they can ever pay it back? Dave said, "Whoa! Who's the doctor?" The guy said it's all his new wife's debt -- $145,000 for a four-year journalism degree, but then she decided that she wanted to cut hair instead, so she went back to cosmetology school with $15,000 more student loan debt. I think he said they make about $60,000 between the two of them. The debt is government guaranteed, so I guess we taxpayers will eventually pay it back to the lender. Ridiculous.

I differ with Ramsey on that point and that's why I refer to his views as being overly simplistic. Debt should be an investment. Whether you're talking about leveraged buyouts or student loans for degrees which are going to allow you to earn a higher income, debt is not dumb.

I invested around $100K (student loans) in my J.D. I'm about 3 years out of school and have aggressively been working on that debt. I should have it paid off next year, and then will go to work on my home mortgage.

The $160K indvidual, *I think* would qualify for an income-sensitive repayment plan and could have her payments extended out 20 years. I want to say that after 20 years, the debts are forgiven assuming you haven't defaulted.