The problem with debt Forum

[drevo]

I think this severely understates what happens to the average person's life when their credit goes to shit and they have nondischargeable debts they default on. As with any sort of default or hit to your credit, the consequence isn't just a one time hit of losing some property. You may think that having bad credit and claims against you isn't the end of the world, but in reality it creates huge issues.

That's why I'm asking. Having never been confronted with the idea itself before this year, I just want to get a sense of the realities of the whole thing before making some potentially huge mistakes.

Others covered more of the details, but the very short and simple answer is that destroying your credit and having bad credit makes many, many things in life extremely expensive (via higher interest rates) and/or impossible to get. That and severe money troubles tend to make people more stressed and unhappy. Credit worthiness plays a huge part in the life of an average person. Add that to the non-dischargeable part of student loans and it's only a worse situation.

[Meowaka]

Others covered more of the details, but the very short and simple answer is that destroying your credit and having bad credit makes many, many things in life extremely expensive (via higher interest rates) and/or impossible to get. That and severe money troubles tend to make people more stressed and unhappy. Credit worthiness plays a huge part in the life of an average person. Add that to the non-dischargeable part of student loans and it's only a worse situation.

Fair enough. Seriously, thanks to everyone who's contributed to this. I know that there aren't many people who don't have a fair idea of the bigger picture where finance and law school intersect. I feel that I have something to start researching and can make more informed choices based on both the consensus here and digging a little deeper in my own time.

[BankruptMe]

Unless you actually want big law, don't spend 200k on law school. Don't spend 100k. With an average LSAT, say 158-160, you can get money at cheaper regionals and only graduate with 60-70k debt. The monthly payment on that is doable, you can still finance a house a few years out of law school, etc.. The largest firm in most towns of 50,000-100,000 is like 5-8 attorneys, sometimes smaller. There is no "big law" and no one talks about it. Where I am the starting salary is 55-60k for small 2-5 people shops, and for DA/PD. State agency maybe 60k or just over.

This is all completely doable. People on this site who attend top schools don't often know much about this, assume it's not so doable. I think they mean well but probably overestimate the competition for grades and jobs at smaller schools, among other factors. I bring this up because you sound like your trying to talk yourself into 200k debt and I want to let you know there are other options. I'm graduating in a few weeks with 60k debt and a 60k job lined up. Entirely possible.

I agree. This is the position I am in. Problem is, a lot of these types of schools are in flyover country.

[twenty]

This conversation reminds me of my uncle trying to talk my cousin out of going into commercial fishing:

uncle: I sometimes have to be away from my family for weeks, even months at a time.
cousin: and?
uncle: Most fishing operations hiring right now are in miserably cold environments like Alaska.
cousin: and?
uncle: Fishing is the most dangerous profession in the US. Very few people I know aren't missing fingers or even arms.
cousin: and?
uncle: The pay is abysmal for the work you're doing.
cousin: and?
uncle: wtf.

[Nomo]

Unless you actually want big law, don't spend 200k on law school. Don't spend 100k. With an average LSAT, say 158-160, you can get money at cheaper regionals and only graduate with 60-70k debt. The monthly payment on that is doable, you can still finance a house a few years out of law school, etc.. The largest firm in most towns of 50,000-100,000 is like 5-8 attorneys, sometimes smaller. There is no "big law" and no one talks about it. Where I am the starting salary is 55-60k for small 2-5 people shops, and for DA/PD. State agency maybe 60k or just over.

This is all completely doable. People on this site who attend top schools don't often know much about this, assume it's not so doable. I think they mean well but probably overestimate the competition for grades and jobs at smaller schools, among other factors. I bring this up because you sound like your trying to talk yourself into 200k debt and I want to let you know there are other options. I'm graduating in a few weeks with 60k debt and a 60k job lined up. Entirely possible.

I agree. This is the position I am in. Problem is, a lot of these types of schools are in flyover country.

We are basically back to the turn of the century. Attending law school in a major east or west coast city is something that only the independently wealthy can afford to do. There are exceptions, including people with certain scholarships; but the average person simply can't afford to attend BC, USC, Fordham, or even Georgetown at full-tuition. Its just not financially feasible.

[MistakenGenius]

Post removed.

[Clyde Frog]

You'll most likely live a much shorter life from the amount of stress you'll have because of severe debt.

[yeslekkkk]

Living in poverty and/or having large amounts of debt can be emotionally exhausting. The stress isn't worth it. I lived way under the poverty line and was having a hard time feeding myself. I would assume it'd be a similar feeling. Not having enough money is not daunting when you haven't experienced it. To work hard and end up walking away with nothing is rough. The emotion and stress that comes with financial issues is an experience you can't imagine until it happens.

[Pneumonia]

your title is missing "fundamental"

[Flanker1067]

I am currently in a ton of law school debt and working a job that doesn't let me pay it down, and, maybe like OP, I'm not so concerned about having a house, car, or a family (not saying I wouldn't like that). But the debt still sucks and is incredibly stressful for me for two reasons,

(1) savings, I have none. I will never have money saved. I am currently on IBR and not covering my interest. While IBR allows me to live with an OK standard of living, I don't foresee ever making enough to pay down the interest (on principal growing fast right now and for the immediate future). Whatever savings I do have will be mostly wiped out by the tax bomb, which means at 52 years old, I will be beginning to save for retirement. I was never a person that thought much about life that far down the road, but that's only because I assumed that if I had a job, 25 years later I would be financially secure. Now I'm forced to realize that I won't, and that my life is essentially in the hands of legislatures deciding healthcare policy;

(2) earning less than you need to pay your debts feels like shit. Every time I'm working late, missing something I want to do, or just generally very busy, it feels like I'm being taken advantage of. Working more hours than the average office job, on tasks that are uniquely hard-yet-still-boring, for the same or less salary is insulting. It makes be unhappy because it makes me hate my job (even though, without the debt, it wouldn't be a bad job). Also, this may be a grass-is-greener thing, but I can't help but think that the skills that got me into a T14 could be used to get a more satisfying or higher paid career.

[unodostres]

Wtf

[Meowaka]

This conversation reminds me of my uncle trying to talk my cousin out of going into commercial fishing:

uncle: I sometimes have to be away from my family for weeks, even months at a time.
cousin: and?
uncle: Most fishing operations hiring right now are in miserably cold environments like Alaska.
cousin: and?
uncle: Fishing is the most dangerous profession in the US. Very few people I know aren't missing fingers or even arms.
cousin: and?
uncle: The pay is abysmal for the work you're doing.
cousin: and?
uncle: wtf.

We all have different interests and decions to make. *shrug*

[Meowaka]

I am currently in a ton of law school debt and working a job that doesn't let me pay it down, and, maybe like OP, I'm not so concerned about having a house, car, or a family (not saying I wouldn't like that). But the debt still sucks and is incredibly stressful for me for two reasons,

(1) savings, I have none. I will never have money saved. I am currently on IBR and not covering my interest. While IBR allows me to live with an OK standard of living, I don't foresee ever making enough to pay down the interest (on principal growing fast right now and for the immediate future). Whatever savings I do have will be mostly wiped out by the tax bomb, which means at 52 years old, I will be beginning to save for retirement. I was never a person that thought much about life that far down the road, but that's only because I assumed that if I had a job, 25 years later I would be financially secure. Now I'm forced to realize that I won't, and that my life is essentially in the hands of legislatures deciding healthcare policy;

(2) earning less than you need to pay your debts feels like shit. Every time I'm working late, missing something I want to do, or just generally very busy, it feels like I'm being taken advantage of. Working more hours than the average office job, on tasks that are uniquely hard-yet-still-boring, for the same or less salary is insulting. It makes be unhappy because it makes me hate my job (even though, without the debt, it wouldn't be a bad job). Also, this may be a grass-is-greener thing, but I can't help but think that the skills that got me into a T14 could be used to get a more satisfying or higher paid career.

Thank you for sharing that.

[TooOld4This]

Why don't you explain how you think things would work if you owe $200,000 in the following circumstances:
1. You have no job offers after law school
2. You are making $35,000/year
3. You are making $80,000/year
4. You are making $160,000/year in a high COL area and hate your job