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Debt consolidation and student loans question?

I’m trying to repay my debt but I am having a very hard time. I have about 40k in debt including interest I’ve accumulated (over estimate, to be safe) most of which is 1 private and 1 federal student loan (probably 35k worth) and the rest are utility bills that are years past due. I’m in my twenties, not a home owner, and currently not a student. Most all of, if not all of, these debts have already gone to collections. I work a job with unsteady hours so I’m never sure how much my pay check will actually be for, this makes it very difficult to budget. Not to mention, I simply don’t make much money. I’ve been actively looking for a higher paying and steadier job but haven’t had luck, yet.

I was wondering if debt consolidation would be a good option for me. I’m wary because so many other people here on yahoo answers have said that they are scams that ruin your credit rating and leave you owing more than you originally did. Is this true? If so, are there other ways to consolidate your debt that are safer? I’m told bankruptcy isn’t an option for me because it will not cover student loans, the vast majority of my debt. Is this true? My biggest worry is my student loans, I feel confident that I could pay off my past due utility bills.

So my main question here is, what is the best option for an impoverished twenty something to pay off crippling student loan debt?

I really want to go back to school and finish my degree, but I don’t know how I could possible afford going back to school when I’m drowning in so much debt from past student loans.

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4 Responses to "Debt consolidation and student loans question?"

  1. Don says:
    You are correct, student loans will not be dismissed in a bankruptcy. If the other debts have gone to collection then I wouldn’t worry about them. Even if you pay them off they will stay on your credit report for years. You need to concentrate on your student loans. Call the provider and explain the problem see what they can work out. Usually they will lower the payments and extend the time. If you can get back on track with them then perhaps you can take up your education again. Good Luck.
  2. GanoRex says:
    You are correct in everything that you’ve said. Here is a suggested plan of action:

    Step 0: Keep looking for a better job.

    Step 1: Consolidate your student loans with the Dept of Education (Direct Loan).

    Step 2: Request an economic hardship deferment from them (you can actually accomplish this over the internet).

    Step 3: Start cutting back on current expenses and start setting aside money into savings.

    Step4: Once you have a cash cushion, reevalute your situation – start paying off the collections. By now they should be terribly reduced. I would probably start with the newer ones, because after 5 years the will have exceed the statute of limitations for debt collection.

  3. Anna K. P says:
    Getting into debt is very easy, but getting out of it is very difficult. In fact, it can take years and even an entire lifetime for people to pay off their debts. Debt can become too worrisome and when you have multiple debts, things can get too overwhelming.

    Nevertheless, debt consolidation offers you a great way out of multiple debts. There is no use crying over spilt milk. However, you can rectify those mistakes by debt consolidation. You can pay off the multiple debts with the loan and then pay off that loan in small monthly installments.

    While it might seem as if you are getting into another debt, it is not the same because this loan is usually a low interest one and therefore, you save on quite a lot on interest and get a lot of peace for your mind.

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