Dear Dr. Don,
I am 56 years old and living on a fixed income of $1,800 a month. I have about $70,000 in school loans for my three kids in school. I rent a house, but I can’t work because I can’t stand for a long time. I have about $3,500 in state retirement funds. What can I do to pay on the loans and still take care of my kids? I know I need some kind of budget, anything that will stop collection calls, and keep food on the table and the lights on. Please give me some kind of answer.
— Michael Morass

Dear Michael,
Yours is a cautionary tale about why parents shouldn’t make their children’s college education their top financial priority. Trying to live on $22,000 per year plus pay the debt service on $70,000 in student loans has you in a budget squeeze.

There’s not an easy answer to your financial troubles. Given your limited income, it’s remarkable you were able to borrow that kind of money, although you may have incurred the debt before you started living on a fixed income.

You haven’t provided the details of where your children are in their college careers, or what kind of help they can provide you in making loan payments. They’re the net beneficiaries of these funds; they should recognize that and help contribute to paying them off.

If the children fail to step up to help you with these debts, it’s possible you can show that repaying the loans would create an undue hardship. By doing so, the loans might be discharged in a bankruptcy proceeding. You’ll want to discuss this possibility with a bankruptcy attorney.

The Web page “Student Loans In Bankruptcy” provides a nice primer on the issues, including questions for you to ask the attorney.

Stopping collection calls is a fairly straightforward matter. It doesn’t erase the debt, but it does keep the phone from ringing off the hook. The FTC Facts for Consumers publication “Debt Collection FAQs: A Guide for Consumers” explains how you can write collectors and tell them to stop contacting you.

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