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Old 01-09-2015, 06:43 AM
 
3,758 posts, read 10,636,621 times
Reputation: 6686

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Quote:
Originally Posted by Big_Student_Loans View Post
I need some advice about my student loan situation. I graduated last May (2014) with about $115K student loan debt from my undergraduate institution. Like so many other graduates, I have not been able to find a job in my field. I have applied to over 200 jobs with no luck. So I am pretty much at this point resigned to the fact that I am not going to find a job any time soon because the economy is awful for recent graduates. Many of my friends are in the same situation with even bigger student loan debt, and I refuse to go back to school to take out even more debt and be in the same situation as I am now.

So I am currently working at a restaurant living at home with my parents. I barely make squat, but the student loan agencies are starting to call me all the time to get me to start paying my loans back. I can't afford to and I have told them this repeatedly, but they don't seem to care and keep calling and harassing me for payment. I haven't paid anything towards the loans, and I don't plan on paying anything for them either because I can't afford it. Some of my friends who are in almost the exact same situation said the loan companies have started to go after their wages.

In order to avoid this happening to me, my family owns and business and my parents have suggested I start just working at the business and getting paid under the table. If I go about doing this right, what can the loan companies really do to me? Can they go after my parent's house or business, or what would be some other ramifications? Thank you for your advice.
OP -

as other's here have stated - there are several things you need to clarify. If these are Government loans (stafford, PLUS, direct, etc..) then income based repayment is the Best/Smartest thing you can do. It will require paperwork (you have to prove you're not making money) - but it will drop your payment very low (possibly to 0) as well as count that time as "paying". On IBR anything not paid after a certain time period (i belive 25 years) is forgiven.

So if for instance you are only making $20K a year, and the calculate your required payment as $25/month, and you do that for 25 years (assuming your income doesn't change, and your required payment doesn't change) - they would forgive the remaining loan amount. Obviously this example is ridiculously simplified, but I'm just trying to get the idea across.

My fear is that you have substantial amounts of PRIVATE loans - which basically no one should ever utilize - because they don't qualify for IBR, and they are exempt from bankruptcy discharge, etc..

Which means they will haunt you for the rest of your life.

Now - what happens if you were to work "under the table"? First - you - and your employer - would be breaking the law -- tax evasion basically.

2nd - because none of your work would be "on the books" - you wouldn't be getting any social security credit or anything else for your yearly earnings.. So, assuming SS exists when you get to retirement age - you wouldn't get any.

3rd - you also wouldn't be earning credits towards disability, etc.. So if something happened and you were disabled, since you hadn't paid into the SS system, I don't believe you would get much of any kind of disability payment.

4th - your private loans would just sit there, waiting for you. So, maybe in 7 years, the economy is really booming (although its already starting to heat up significantly) - and since you really really want to work legally - you apply for a great job in your field and you get it.

All the garnishments that the private loans have gotten against you will still be active. Your wages will be garnished, plus the private loans can take on fees/penalities ... so lets say you have $85K in private loans right now ... after 7 years of "ignoring" them - you might find yourself with $200K in private loans.

Again - these are not dischargeable in bankruptcy (no student loans are, but at least the goverment (public) loans have the income based repayment plan to help people out).

So you find yourself essentially financially ruined forever - or of course you find yourself working illegally (under the table) forever - again, never accruing SS credits, and likely never earning very much (because its hard to hide paying someone a large amount of money, so basically you'll be stuck always working minimal jobs for tips).

For that reason, most of us would suggest calling your creditor and explaining the situation and telling them you wish to "remain in good standing" and want to work out a reasonable payment plan. ($20/month, $50/month, something).

Ignoring creditors rarely works, but for normal debt (credit cards, etc..) at least there are statues of limitations as well as the option of bankruptcy. For student loans - ignoring is a really really bad idea
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Old 01-24-2015, 07:14 PM
 
125 posts, read 125,854 times
Reputation: 168
Quote:
Originally Posted by Big_Student_Loans View Post
I need some advice about my student loan situation. I graduated last May (2014) with about $115K student loan debt from my undergraduate institution. Like so many other graduates, I have not been able to find a job in my field. I have applied to over 200 jobs with no luck. So I am pretty much at this point resigned to the fact that I am not going to find a job any time soon because the economy is awful for recent graduates. Many of my friends are in the same situation with even bigger student loan debt, and I refuse to go back to school to take out even more debt and be in the same situation as I am now.

So I am currently working at a restaurant living at home with my parents. I barely make squat, but the student loan agencies are starting to call me all the time to get me to start paying my loans back. I can't afford to and I have told them this repeatedly, but they don't seem to care and keep calling and harassing me for payment. I haven't paid anything towards the loans, and I don't plan on paying anything for them either because I can't afford it. Some of my friends who are in almost the exact same situation said the loan companies have started to go after their wages.

In order to avoid this happening to me, my family owns and business and my parents have suggested I start just working at the business and getting paid under the table. If I go about doing this right, what can the loan companies really do to me? Can they go after my parent's house or business, or what would be some other ramifications? Thank you for your advice.
Did anyone co-sign for you on any of your loans? If so, the lender(s) can go after that person if you refuse or cannot pay.

Are your student loans public or private? You probably have both. Income-based repayment is available for public student loans, and if you're adjusted gross income is less than 150% of the federal poverty level (approx. $17,000 per year), you're monthly payment on those loans will be $0. Income-based repayment options are rarely, if ever, available for private student loans, but in any case, talk to your lender. DO NOT IGNORE YOUR LOANS!!! Ignoring student loans is the worst thing you can do. On your private loans where income-based repayment is not available I'd recommend deferment, keeping in mind that interest continues to accrue.

In very rare cases, bankruptcy is an option for discharging student loans, but you'd have to prove to the judge that you'd be unlikely to ever repay the debt at any point in your life, which is a very high bar to meet.
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Old 01-25-2015, 05:08 AM
 
6,441 posts, read 3,070,464 times
Reputation: 5863
In addition to the previously mentioned consequences of working off the books, all it takes is one disgruntled coworker, one love interest or ex partner you tick off, etc to turn you or your parents into the IRS and/or state for tax evasion. They can get a reward for turning you both in.

Failure to pay employment taxes is taken even more seriously than failure to pay income taxes by the IRS.

Let them pay you on the books and gain some experience that may help you get a job. Continue working at the restaurant at night and start paying the loans back. The sooner you start, the sooner they will go away.
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Old 01-25-2015, 07:40 AM
 
12,705 posts, read 9,970,523 times
Reputation: 9515
Quote:
Originally Posted by Big_Student_Loans View Post
I need some advice about my student loan situation. I graduated last May (2014) with about $115K student loan debt from my undergraduate institution. Like so many other graduates, I have not been able to find a job in my field. I have applied to over 200 jobs with no luck. So I am pretty much at this point resigned to the fact that I am not going to find a job any time soon because the economy is awful for recent graduates. Many of my friends are in the same situation with even bigger student loan debt, and I refuse to go back to school to take out even more debt and be in the same situation as I am now.

So I am currently working at a restaurant living at home with my parents. I barely make squat, but the student loan agencies are starting to call me all the time to get me to start paying my loans back. I can't afford to and I have told them this repeatedly, but they don't seem to care and keep calling and harassing me for payment. I haven't paid anything towards the loans, and I don't plan on paying anything for them either because I can't afford it. Some of my friends who are in almost the exact same situation said the loan companies have started to go after their wages.

In order to avoid this happening to me, my family owns and business and my parents have suggested I start just working at the business and getting paid under the table. If I go about doing this right, what can the loan companies really do to me? Can they go after my parent's house or business, or what would be some other ramifications? Thank you for your advice.
This is fraud because you would be declaring a lower income than the real amount in order to lower your payments.
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Old 01-27-2015, 10:17 PM
 
213 posts, read 182,499 times
Reputation: 84
Quote:
Originally Posted by Big_Student_Loans View Post
I need some advice about my student loan situation. I graduated last May (2014) with about $115K student loan debt from my undergraduate institution. Like so many other graduates, I have not been able to find a job in my field. I have applied to over 200 jobs with no luck. So I am pretty much at this point resigned to the fact that I am not going to find a job any time soon because the economy is awful for recent graduates. Many of my friends are in the same situation with even bigger student loan debt, and I refuse to go back to school to take out even more debt and be in the same situation as I am now.

So I am currently working at a restaurant living at home with my parents. I barely make squat, but the student loan agencies are starting to call me all the time to get me to start paying my loans back. I can't afford to and I have told them this repeatedly, but they don't seem to care and keep calling and harassing me for payment. I haven't paid anything towards the loans, and I don't plan on paying anything for them either because I can't afford it. Some of my friends who are in almost the exact same situation said the loan companies have started to go after their wages.

In order to avoid this happening to me, my family owns and business and my parents have suggested I start just working at the business and getting paid under the table. If I go about doing this right, what can the loan companies really do to me? Can they go after my parent's house or business, or what would be some other ramifications? Thank you for your advice.
You should work under the table, build up a cash reserve and continue you looking for a good job. Once you have a good job you can start paying back your loans. get on the IBR plan for your federal loans..since you'll be working under the table it will look like you have no income so payment will equal zero. Just keep stalling with the private student loan collection agents until your find a job good enough to pay back the money...
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Old 01-27-2015, 10:19 PM
 
1,099 posts, read 572,504 times
Reputation: 984
Quote:
Originally Posted by chancellor14 View Post
You should work under the table, build up a cash reserve and continue you looking for a good job. Once you have a good job you can start paying back your loans. get on the IBR plan for your federal loans..since you'll be working under the table it will look like you have no income so payment will equal zero. Just keep stalling with the private student loan collection agents until your find a job good enough to pay back the money...
Working under the table is illegal. Advising someone to become a criminal is a horrible thing to do.
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Old 01-27-2015, 10:30 PM
 
213 posts, read 182,499 times
Reputation: 84
Quote:
Originally Posted by IDoPhysicsPhD View Post
Working under the table is illegal. Advising someone to become a criminal is a horrible thing to do.
Who cares? It's not like he'll be getting paid a lot of money. At this point it should be all about getting as much cash as you can so when he finds a good job he'll have a small emergency fund and be able to pay loans.
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Old 01-27-2015, 10:39 PM
 
1,099 posts, read 572,504 times
Reputation: 984
Quote:
Originally Posted by chancellor14 View Post
Who cares? It's not like he'll be getting paid a lot of money. At this point it should be all about getting as much cash as you can so when he finds a good job he'll have a small emergency fund and be able to pay loans.
As a taxpayer, I care. There are millions of other taxpayers that care as well. The OP is a young individual. Your encouragement of college graduates becoming criminals is out of line.
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Old 01-27-2015, 10:51 PM
 
213 posts, read 182,499 times
Reputation: 84
Quote:
Originally Posted by IDoPhysicsPhD View Post
As a taxpayer, I care. There are millions of other taxpayers that care as well. The OP is a young individual. Your encouragement of college graduates becoming criminals is out of line.
I'm a taxpayer and I don't care. There are millions of others who don't care as well. It's only temporary, I care more about an individual getting up on his feet, then being buried with payments, plus paying taxes. It's not like I'm telling him to steal. And it's only temporary, people go through hard times and you gotta do what you gotta do
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Old 01-28-2015, 08:23 PM
 
125 posts, read 125,854 times
Reputation: 168
Quote:
Originally Posted by chancellor14 View Post
You should work under the table, build up a cash reserve and continue you looking for a good job. Once you have a good job you can start paying back your loans. get on the IBR plan for your federal loans..since you'll be working under the table it will look like you have no income so payment will equal zero. Just keep stalling with the private student loan collection agents until your find a job good enough to pay back the money...
Even with his private student loans, I'm sure he can still get a deferment at this point.
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