AllforOne
... and I'm all out of bubblegum.
- Joined
- Jan 17, 2014
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700 credit score, gonna have to start paying back student loans.
Except I'm 1099 and basically write almost everything off. I'm down to like 20k agi and my student loan forgiveness plan calculates that I don't have to pay anything at my current income for twenty years and it's forgiven.
Likely option.
However, my friend is down to owing 1/4 of what she initially did by not paying and getting deals her credit dropped 200 points though.
How quickly would you be able to raise it up should you start paying back on your loans etc? Figuring out exact details before I can even ascertain if I could live with a 500 credit score and then decide whether it's morally acceptable to do this.
I think you have it backwards. The moral issue is first, in my mind. I'd never take out a loan with the intent of defaulting on it. That would keep me from ever considering the issue of "how long would it be before my credit was restored?"
If you did go that route, my guess is that it would take at least a couple of years for your score to recover (assuming you have no other dings in the meantime). And you'll have a lot of 'splainin' to do if you apply for any credit, try to rent an apartment, or anything else that may require a credit check, within the next seven years. Never mind that other annoyances (like debt collectors) will become a part of your life for some time.
Finally, I'll suggest that your plans give you zero flexibility ... and that's a lot to assume for the next 20 years. You say your loans will be forgiven if you continue to maintain a low AGI as a 1099 contractor. That may work for you today ... but there are a number of ways that apple cart can be tipped over:
* Are you sure you'll always be a 1099 contractor? What if your client(s) go belly up? (From your comments, it doesn't sound like you've ever lived through a recession. We haven't had one in about a decade -- but we will.) What if you get approached with a dream job, one that would require you to become a W2 employee?
* Are you sure your AGI will always be that low, even if you stay 1099? Twenty years from now, you'll likely be earning at least a couple times what you're bringing in today.
* Are you planning on getting married within those 20 years? If so, and if your wife works, then that raises AGI as well.
* Student loan forgiveness programs have a terrible record of actually coming through. The promises sound great -- but then you make one little misstep in those 20 years, and they won't pay. Maybe yours will -- I'm just saying that you're playing with snakes, so don't be surprised if you get bit.
If it were me, I'd slice all the fat out of my budget and smash through the loans as quickly as possible. YMMV.