Faith and Finance

Jim McTevia, widely known as a pioneer in the turnaround business, spoke with Rod Meloni of WDIV about Bing’s upcoming announcement regarding Detroit’s liquidity crisis. Jim’s expertise tells him that Detroit needs to do to one of three things to avoid bankruptcy: cut expenses, raise revenue or a combination of both. This broadcast aired on Tuesday, November 15, 2011 on WDIV during the 6:30 pm slot
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Question by fitnessluvr: Best friend declaring bankruptcy to avoid paying student loan!?
So my best friend was telling me the other day that she doesn’t plan on paying back her $ 26,000 student loan and that she would rather declare bankruptcy in 5 years time to avoid paying it off. She won’t have to pay off her loan but she will have a diminished credit rating for 10 years.

Here’s my problem. We both have the same loan amount (around 26,000) and we’ve both been out of school for a little over a year. We both have the exact same living circumstances as well and both had the same job this year. I’ve paid off half of my loan while she’s spent her money on clothes, a vacation, and going out with friends. And she’s now looking for a car.

What really bothers me is first that she has no morals. It’s borrowed money from the government that she could easily pay off in 4-5 years and still have enough to live the lifestyle she’s living. And also, that she would rather sacrifice her credit rating than pay a cent back. Like really, instead of making payments over the next 5 years, you’d rather have a horrible credit rating and not be able to buy a house in the next 10 years?? That just shows sheer greed to me….it’s not that she needs the money, it’s that she can’t stand the thought of paying it back.

Everytime we go out, she’ll spend $ 100 a night, but she can’t pay back her loan? I think about all the people, like myself, who work hard just to pay that loan off or people who work while in school to be able to afford it……and what she’s doing really disgusts me.

Do I bring it up with her or just bite my tongue?

Best answer:

Answer by Jay Sharky
I would tell her that she is messing up her credit by going through a bankruptcy. You mentioned the 10 year period but a bankruptcy can haunt someone for far longer. Its a bad idea to do and is only there for people who really can’t pay their debt. She will be making a very costly mistake just to avoid paying a debt.

What do you think? Answer below!