# Student loan debt advice



## anonfrank (Apr 18, 2013)

Wife has mental illness that flared up just as she was finishing grad school. Has never been able to work in her field as a result and is unemployed. She stays home with our child who is now school-aged.

Between the three degrees she obtained when she was mentally healthy, she attained over $200k in student loan debt. Initially, it was in forbearance but of course, interest continues to build and she now owes $260k because of that.

We have been filing taxes jointly with mutual benefit.

Now, after ten years, it is time to pay the piper. I give her an allowance for her expenses including at least some payment on her student loan. Of course, being bipolar, she frequently blows it and asks for more. Before you ask, the answer is always "no". I'm not trying to be a doormat here.

This means I have been stuck some months paying her $1300 student loan payment. I do not intend to continue jeopardizing my retirement paying debt I did not accumulate. I have no loan debt, I paid it off long ago.

She says she is "looking for work" but has held a job for two weeks int he last ten years. She somehow expects me to find work for her, while I'm working 10-12 hours a day with frequent weekend extra because no one at my workplace does what I do.

My options here are
1. Be a doormat and just take over the student loan payments the rest of my life. Screw that, ain't happening, and I have told her that.

2. Change to married filing separately for our taxes. Loss of tax benefits as a result, but she can have a more manageable student loan payment as then she'll be eligible for an income-based payment reduction without having to consider my significant income. This is where I'm leaning.

3. Declare her disabled. She is, effectively, but she declines to sign off on the paperwork. This is part of the "no insight" thing about bipolar disease. "I'm not disabled, everybody else is because they don't understand me". Um, OK. She is on meds...but they only do so much.

Because things have come to a head in the last couple of months, I have been out sniffing for low-stress work the wife might be able to handle. Further, as much as I hate doing it, I finally started mandating that a specific amount of the biweekly allowance I give her go to the student loans, or else I stop giving it, the end. She didn't like that, but is being compliant so far.

So what would the great intelligence of TAM do?


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## SlowlyGoingCrazy (Jun 2, 2011)

As much as I don't like the whole "allowance" thing, if she's not paying her bills from her portion of that money then pay them first and give her what's left over. 
You take over the bills and divide up the rest into what can be used for fun money and give her her share of that.


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## anonfrank (Apr 18, 2013)

Thanks for the replies so far.

I considered SlowlyGoingCrazy's option but that would lead to drama. It is easier to give her the allowance. I don't like it either.....but I don't like the mental illness, and neither of us planned for her to have a nervous breakdown in graduate school. We've had to make what we could out of what life gave us.

Lila, never gotten any tax benefit from her having student loan interest. My income is too high to be eligible for that particular deduction, and since we have filed our taxes jointly to now, she has never gotten the benefit of it, either.

Some of the loans were taken out before we were married, others taken out on her own (i.e. without me as cosigner) during the marriage. As such, the debt is all hers.

I'm willing to help out, but I'm not willing to jeopardize either our retirement fund or our child's college fund because of her mental illness and inability to work.

I want to have her disabled--again, it is literally true--but without my declaring myself her guardian, I can't make her sign the loan paperwork to make it happen. Thus the need for other options.


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## unbelievable (Aug 20, 2010)

I'd approach the question in this manner: Who has the higher moral obligation to pay your wife's debt? You, innocent taxpayers, or the lender who loaned her money in good faith? I'd figure she was my wife, it was my duty, and I'd pay the debt off. Ideally, she'd become well enough to help. I'd especially feel this way if we were married when she incurred these debts. I don't think it's being a doormat. It'd be being a husband. When I married my wife, it was clear to me that her debts became my own. If she inherited or earned $260K, would you not assume you had the right to share a portion of it? If you would help her own a positive $260K due to your marital status, doesn't it logically stand that the same relationship makes you own a negative $260K?


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## Pluto2 (Aug 17, 2011)

unbelievable said:


> I'd approach the question in this manner: Who has the higher moral obligation to pay your wife's debt? You, innocent taxpayers, or the lender who loaned her money in good faith? I'd figure she was my wife, it was my duty, and I'd pay the debt off. Ideally, she'd become well enough to help. I'd especially feel this way if we were married when she incurred these debts. I don't think it's being a doormat. It'd be being a husband. When I married my wife, it was clear to me that her debts became my own. If she inherited or earned $260K, would you not assume you had the right to share a portion of it? If you would help her own a positive $260K due to your marital status, doesn't it logically stand that the same relationship makes you own a negative $260K?


Not trying to start an argument, but no I would not assume that my spouse's inheritance was something I was due. Just as a spouse is not obligated, legally or morally, when their partner fails to fulfill a tax obligation (under filing separately status of course).
Change to married filing separately, at least or until her mental state is more secure.


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## unbelievable (Aug 20, 2010)

We obviously have different ideas about moral obligations. A decision to not pay this debt (or to leave it in the hands of a mentally disabled, unemployed woman) is a decision to transfer the obligation to the backs of taxpayers. In the instant case, this would be done not because the OP can't pay the debt but because he'd just rather use his money for other things. I would rather use my money for things other than paying for his wife's multiple degrees. In practical effect, money would be stolen from taxpayers to put into his retirement account and to permit his wife the luxury of a permanent and premature vacation. Those who agreed to take on the debt need to pay it. I'm happy to pay for food, housing, and medical care for those who CAN'T provide basic necessities for themselves. How about, I take care of the needs and debts of my spouse and others can do likewise?


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## Pluto2 (Aug 17, 2011)

unbelievable said:


> We obviously have different ideas about moral obligations. A decision to not pay this debt (or to leave it in the hands of a mentally disabled, unemployed woman) is a decision to transfer the obligation to the backs of taxpayers. In the instant case, this would be done not because the OP can't pay the debt but because he'd just rather use his money for other things. I would rather use my money for things other than paying for his wife's multiple degrees. In practical effect, money would be stolen from taxpayers to put into his retirement account and to permit his wife the luxury of a permanent and premature vacation. Those who agreed to take on the debt need to pay it. I'm happy to pay for food, housing, and medical care for those who CAN'T provide basic necessities for themselves. How about, I take care of the needs and debts of my spouse and others can do likewise?


Take care of your spouse anyway you and your spouse see fit, as is your right.

But you're foisting your moral values on others.

There is a reason couples are given an option of filing taxes as "married filing separately" and that's because people are not keepers of everything another adult does, including their spouses. The person who agreed to take on the debt is incapable of doing that. There is nothing immoral is using available remedies to alleviate that. 

A few years ago my BIL got it in his head that taxes were unconstitutional and he refused to file or pay. No surprise that the IRS did not share his view. His wife, filed as married filing separately and properly did so to protect their home, separated all finances. Was that immoral? No. It was the morally right thing to do to maintain a home for their child.


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## Pluto2 (Aug 17, 2011)

OP, sorry for the thread jack. I'll leave.


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## unbelievable (Aug 20, 2010)

In opinion forums, you get opinions. One who wants to know what technically legal loop holes exist would be better served seeking the guidance of an attorney in their particular state.


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## anonfrank (Apr 18, 2013)

I appreciate any and all comments. However, let's please keep this on track rather than making this a political debate. I am not asking about legal loopholes, I am asking for practical advice from people who may have been here before me. Thank you.

Further, I take the "be a husband" comment poorly. I have been effectively a caretaker spouse for my mentally ill wife for ten years now, i.e. half the marriage. Instead of coming home to peace and tranquility, I have to come home to whatever the mood of the day is. Many days things are fine, but about half (or sometimes more) of the days I am mitigating one crisis or another. I think I've been the good husband in that regard already, though honestly I am burned out doing so and keeping my family fed at the same time. Unless you've lived it, you would not understand it. Many husbands would have left but I have not (though there are some days when I wish I could).

****

Back on topic: in short, unbelievable feels the same as the other two posters above him, who feel that I should fold her payments into my budget and suck it up. Nothing wrong with that opinion and I accept it. I can pay for it but have been giving my wife an allowance that allows her to make the payments somewhat on her own. This way she at least had some money she could spend on other items. 

However, she obviously requires some guidance, or as lila and SlowlyGoingCrazy suggest, simply just make the payment myself and give her a smaller allowance (i.e. what's leftover). That's reasonable advice as well.

Has anyone else gone through this?


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## anonfrank (Apr 18, 2013)

I forgot to mention the reason she gets an allowance from me:

Ten years ago, when her illness started, she spent everything, and I do mean, everything, in our joint accounts and accumulated a lot of debt. It cost me about $30,000 to set everything straight. It took me about three years to straighten things out and we are OK financially now...except for this. I did it without going through bankruptcy, I just put my nose to the grindstone and worked my butt off.

She still has a joint bank account with me but she has little to no access to it, no debit card with her name on it from the account, I keep the checks from her. Someone looking from the outside would assume I was some control freak, but no, she almost bankrupted us and I was damned sure I wasn't going to let that happen again.

This huge student loan is just another crisis I am mitigating because of the mental illness.

I hope she eventually improves completely but after ten years, I have no hope that it will happen, and I fully expect to be working for the rest of my life instead of retiring because of this loan debt.


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## EleGirl (Dec 3, 2011)

I disagree with most of the others. The debt is too high and puts a HUGE burden on you. (I'm assuming that you are not filthy rich because if you were you'd just pay them in one lump sum, no problem.)

The debt is your wife's separate debt. 

There no moral obligation to pay a debt that you did not make.

Your wife is unable to pay back the debt through no fault of her own.

In our society we have made the moral decision that a person's sole debt cannot be assigned to anyone else, not even a spouse or other family member.

We have bankruptcy laws because we realize that sometimes people cannot handle the level of debt they get into... often due to medical and disability issues.

We also have compassion for the disabled, to include the mentally ill.

Further, for those concerned about putting student debt back on the tax payer. What she owes is peanuts compared to the hand outs that we give to billion dollar corporations that benefit billionaires/millionaires.

anonfrank, 

Get her declared disabled. I understand her reluctance to do this. But impress on her that if she does not sign then she is sentencing YOU and YOU CHILDREN to a harder life than you need to have. She will be stealing away her own children's education. 

Tell her that she either signs or gets a job and pays off her own debt.


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## DTO (Dec 18, 2011)

anonfrank said:


> Thanks for the replies so far.
> 
> I considered SlowlyGoingCrazy's option but that would lead to drama. It is easier to give her the allowance. I don't like it either.....but I don't like the mental illness, and neither of us planned for her to have a nervous breakdown in graduate school. We've had to make what we could out of what life gave us.
> 
> ...


Even though you don't consider yourself a doormat now, your refusing to do something clearly in your family's best interest (and actually doing the job search for her) does point you in the doormat direction.

You simply need to go to a judge and have her disabled. And you cannot get an expert to declare her thusly, then work with that expert to get her a job that maximizes her ability.


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## EleGirl (Dec 3, 2011)

I've done the work to get a couple of people 'declared' disabled.

No judge is needed. A judge is needed when declaring a person incompetent and getting either the court to assign someone as their guardian or getting yourself declared as their guardian. 

We've been through this too. It costs a lot of money. Has to be revisited every 6 months or so. Unless a person has end stage Alzheimer's or something that permanent, this is not going to happen. It's almost impossible to get anyone declared in competent.

I do not think that anonfrank's wife would qualify for SSI or SSD since she is married to him and he has an income. I don't know what impact her being married to him will have on student loan forgiveness since legally she's entitled to 50% of their assets and income. 

For total and permanent disability discharge on your federal student loans a person fills out the forms. And depending on their situation, they either attach the supporting documentation to the application or have their physician complete Section 4 of their application. 

Total and Permanent Disability (TPD) Discharge


There is also income based repayment. Here's a site that might help with that.

What Happens to Student Loans When You Die?

What Happens to Student Loans When You Die? - ABC News

While the student loans might be sole debt or they might not really be sole debt. With the high amount of her student debt a good portion of that is probably student loans from banks. They might not be sole debt because a bank was involved and normal lending laws apply in many cases.

Another thing to consider is that when she does pass away (we all do) they can come after her assets to pay off the loans if they are not paid off by then. That's 50% of everything anonfrank and his wife has in assets.

FinAid | Income-Based Repayment and Public Service Loan Forgiveness FAQ

anonfrank, this is all very complicated. Perhaps you would benefit from seeing an attorney about this?


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## EleGirl (Dec 3, 2011)

anonfrank, what papers is your wife refusing to sign?


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## unbelievable (Aug 20, 2010)

anonfrank said:


> I appreciate any and all comments. However, let's please keep this on track rather than making this a political debate. I am not asking about legal loopholes, I am asking for practical advice from people who may have been here before me. Thank you.
> 
> Further, I take the "be a husband" comment poorly. I have been effectively a caretaker spouse for my mentally ill wife for ten years now, i.e. half the marriage. Instead of coming home to peace and tranquility, I have to come home to whatever the mood of the day is. Many days things are fine, but about half (or sometimes more) of the days I am mitigating one crisis or another. I think I've been the good husband in that regard already, though honestly I am burned out doing so and keeping my family fed at the same time. Unless you've lived it, you would not understand it. Many husbands would have left but I have not (though there are some days when I wish I could).
> 
> ...


You know she suffers from some variety of mental illness and that she has a history of spending the allowance on things other than her student loan. Why not cut her allowance and send the student loan portion directly to the creditors? If she wants more walking around money, it might motivate her to get some form of employment.


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## unbelievable (Aug 20, 2010)

My wife has bipolar and depression, was employed when I married her and quit a year later. I've been supporting her 100% and paying all her substantial debts 100% ever since. Not suggesting that anyone do anything I'm unwilling to do.


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## Hopeful Cynic (Apr 27, 2014)

unbelievable said:


> You know she suffers from some variety of mental illness and that she has a history of spending the allowance on things other than her student loan. Why not cut her allowance and send the student loan portion directly to the creditors? If she wants more walking around money, it might motivate her to get some form of employment.


This would be my suggestion as well. If she won't do anything about her how condition affects her finances (and yours!), such as find medication that stabilizes her enough to be keep a job, or have herself declared disabled, you have to start being more strict.

Tell her that her whole allowance must now go to paying her student loans, or you will not be able to retire and the children will be unable to attend college. If she wants spending money on top of you doing that for her, she'll have to earn it herself, or lower her student debt somehow. That might be the incentive she needs.


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## anonfrank (Apr 18, 2013)

unbelievable said:


> My wife has bipolar and depression, was employed when I married her and quit a year later. I've been supporting her 100% and paying all her substantial debts 100% ever since. Not suggesting that anyone do anything I'm unwilling to do.



Respect given. I understand.

So, an update:

I had an honest discussion with my wife about the situation during one of her more lucid periods in the last week. I have learned not to have these discussions when she is in one of her, um, states.

She is genuine in her desire to pay this debt at least downward. She is understandably frustrated that she is unable to continue in her career. She does not want to pursue disability because she feels shame in the diagnosis she was given by her psychiatrist, and does not want to be labelled further.

I have thought in the past that she should get out on her own to find any work she can to pay the debt down. After all, that's what I would do and I am unsure she'd be willing to stick around if the shoe were on the other foot. She says after spending so much time with our little guy, she is unsure how to connect with others to even find a job.

With those things in mind, I proposed the following, which she is willing to accept and which involves BOTH of us contributing.

1. She will use x amount from every allowance check I give her to pay on her student loan. The rest she can have fun with. I will help with the remainder of her loan every month. I have "lectured" her on budgeting in the past, to a deaf ears response, but I told her that if she expects my help, she has to take responsibility.

2. She will go to a support group for those who are unemployed long term, to be reminded of interview skills. There are a couple such groups in our area for moms. This will also allow her to connect with more people outside of the house.

3. I have previously made no effort to help her find work outside of the house, in part because I felt she should be a responsible adult and could do it herself, and in part because I was simply too busy at work myself to spend the time. I have decided that I have to become directly involved. In fact, I have found an opportunity for her that is low stress, part time, and uses at least some of her skill set. We'll see how it works out.....

4. When she does secure a job, she has to pay on student loans first before fun stuff. That's what I do with all my paychecks, after all. I pay our household bills, put money into our savings and son's college fund, THEN use the small amount leftover to have fun.

If none of this comes to pass, then we will be filing taxes married filing separately to get her into a lower payment and I will cut off allowance mostly/completely.

Will try to update with any progress/(regress?  ).

Tl;dr: working to make progress.


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## Happilymarried25 (Mar 19, 2014)

That sounds like a good compromise. She needs to learn to pay her student loan debt first and then a small amount for fun money. I agree with you that it's important for her to get a job not only to pay off the student loan but to help her gain more confidence.


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## EleGirl (Dec 3, 2011)

It sounds like you have a plan. Time will tell whether or not she will follow it.

I understand that she feels stigmatized with her diagnosis. But she needs to keep in mind that the only reason she is not forced to either get/keep a job or get on disability is because she has you to buffer her from the responsibility to take care of herself and her own obligations.

If she does not follow that plan, I think you are going to have to impress on her this reality. IMHO, it's profoundly unfair of her to be taking over 260K out of your family budget.. out of your earnings. That's like having to purchase a second house that you will never step foot in.


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