Quote:
Originally Posted by mysteriousjane
Of course. We have a pretty good relationship that includes being open and honest with each other about everything. He doesn't blame me for it either.
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How much does he make a year?
How much has your private loan balance grown as a result of unpaid interest and late fees?
If you post a detailed written budget and the details of the current status of the private loans, including interest rates and balances, we can take it from there and try to help you plan this out.
First, call and see if you can settle any of the loans for less than the full amount. Offer 30-50 cents on the dollar on all the loans you are 6 months or more behind on. Refinance with family loan if possible (normally I would advise against this, but your sky-high interest rates indicate this may be the only reasonable option.)
If you cannot get a family loan, then the next thing to look at is whether your husband* (if he is willing) can take out credit cards or personal loans to pay off the super-high interest loans (>15%) and tackle the lower interest private loans (if you have such) directly, paying them out of income. This will be especially useful if you can settle the very high interest loans for less than the full balance and use credit cards or personal loans/credit lines in your husband's name to pay the lump sum. Be sure to get any settlement offer in writing - if you don't do this, it could mean you'll spend the rest of your life in debt - so getting it in writing is very important!
Let's say you manage to settle some of the private loans for less than the full amount and cram down your private loan debt to $70k. If you have some of that in low-interest loans, they would have manageable payments of a few hundred dollars monthly - so you'd just pay them. The super high interest ones could be moved to credit cards, with payments totalling another few hundred dollars a month.
You should aim to get all the payments, federal, private, and credit card, to total less than about $1500/month. Ideally under $1000/month, if it can be done.
Then what you want to do is increase income. This does not necessarily mean you must give up your current job, if you can work a side gig, and preferably your husband do the same.
The tough part is you may have to put up with austerity living for a few years (but then again, what do you expect with this much debt after all?)
If all the payments are made on time every month on all of it, federal, private, AND credit cards, for several years in a row, your credit will be good enough to move the debt back into your name, where it "belongs" (you may even use this as a talking point when mentioning the idea to your husband.). With good credit, you can open some unsecured personal lines of credit at 8-12% interest for unsecured debt, and use them to pay off any debt with a rate higher than that. Ideally, you can balance transfer at least a portion to 0% credit cards.
My hope for you is that by this point you will be down to $40k in non-federal-loan debt with $10k - $15k of that on 0% credit cards and the rest of it at no more than 10% interest. At this point, with the federal loans still on IBR, you can scale back to just a full time job for both of you, giving you a well needed respite from the burnout you will have by this time.
I do believe it should be possible to be totally free of non-mortgage debt (not counting federal loans on IBR) by 2030 if you play your cards right and stay motivated.
*You probably cannot do this yourself due to trashed credit from the private loan defaults
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