Dealing with $500K in Debt
| July 30, 2008 | Posted by Roshawn Watson under Uncategorized |
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By: Roshawn Watson
I thought there were several things to pull from their story. For example, I really do not know if the decision to go to the private medical school (Midwestern University) was wise in Chris’s case. He already didn’t have the money to go to school, and by not going to UIC (public), he just tripled his college bill. That decision alone added >$80,000 to their repayment amount. Even with a large salary, an extra $80,000+ is nothing to sneeze at.
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Additionally, I think they should have opted for cheaper housing. Although their mortgage isn’t outrageous given their income, if they could have opted for more affordable housing give their exorbitant debt load, they would have been able to make more modest progress in eliminating the rest of their debt.
I also disagree with some of the experts recommendations. For example, he said they should borrow from family members or friends to repay the loans. It is usually a bad idea to try to borrow your way out of trouble. The problem is the behavior not the debt. This is also a good way to ruin a relationship.
The other recommendation of holding on to the low interest loans as long as possible is not a good plan either. Instead, why not use the same discipline it takes to finish all that training, and apply that to becoming completely debt free. That way you will have unrestricted cash flow and can have a real life. After all, they really deserve it!
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