10/01/2013 11:20 am ET Updated Dec 06, 2017

After Decades I Finally Need to Deal With My Student Loans

Huffington Post Reader Question

Dear Steve,

Over 20 years ago, I borrowed 20K to finance my education. I earned a teaching degree and taught for 3.5 years. I was in the middle of a divorce with two young sons. I entered the business world to make earn a better living. In the mean time my ex had filed for bankruptcy which had damaged my credit for 7 years, however I was still responsible for the 20K.

Over the years I struggled to make ends meet and in the mean time kept deferring my loan and naturally each time interest kept capitalizing. The debt became over whelming and I kept deferring. Fast forward to Oct 2013, I now owe over 124,000. I have a great job earning 78K gross annually, a small home and some cc debt, however cannot afford $960 a month payment. I qualified for yet another deferment but know I need to face this finally head on.

My question to you is what are my options? I am not in default, I've always kept in communication with the lender. I have excellent credit however I know this will be hurt if I do not do anything.

I am not asking for complete forgiveness. I am asking for a significant reduction, like half and I then can I honestly make payments. I do not want to sell my home, it's my most important asset. I'm 51 years old and single.

Help! Should I contact a debt lawyer? Do I really have options?


Don't miss my free my weekday email newsletter with the latest tips and advice on how to beat debt and do better financially. Subscribe now. - Click Here

Dear Diana,

As you observed this is really an issue that goes back many years. I'm so sorry you find yourself in this position today but all is not lost.

There is no sense wasting a perfectly good mistake so let's learn from it. The first lesson is there is no reason a consumer bankruptcy has to "damage credit" for any extended length of time. In fact I even publish a free guide showing how to recover quickly. By following the guide people should be able to finance a new car after bankruptcy in a year and be ready to get a new mortgage in as little as two years.

Now to the student loans. For whatever reason the proverbial can has been kicked down the road for decades now. The day of reckoning is upon us. Unfortunately the most critical fact here is if these loans are federal or private. Not knowing that fact I'll need to refer you to this free guide on how to deal with student loans.

Even though you are earning an above average income it does not mean there are not good options if these are federal loans.

I applaud your desire to face this head on now and firmly believe doing so will help you to stop feeding this debt in the dark.

Get Out of Debt Guy - Twitter, G+, Facebook

If you have a credit or debt question you'd like to ask, just click here and ask away.

If you'd like to stay posted on all the latest get out of debt news and scam alerts, subscribe to my free newsletter.