Author Topic: Debt question  (Read 2539 times)

rjbf65

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Debt question
« on: September 09, 2013, 07:30:21 PM »
First time poster here! Also just started reading this blog a few weeks ago.  I'm getting married next year and am curious how the mustachians of the board would look at my situation.  I'm 29, debt free, 28k in the bank and 15k in a Roth IRA.  I'm renting and wanting to put at least 25% down on a home once we are married.  FiancÚ is 23 and has about 25k in debt. ~2k on her car and ~23k in student loans.  It's her name on the student loans but her parents (divorced) both agreed to pay for her college.  I believe it's even written up in the divorce documents. So...I hate debt and want us to be debt free before buying a home.  Should I trust the parents will do good on their agreement or take matters into our own hands?

Ps...I love reading these forums!

CrochetStache

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Re: Debt question
« Reply #1 on: September 09, 2013, 08:04:12 PM »
Plan for the worst, Hope for the best.

The two of you will know best if they will follow through on their promises. And even if they do, halfway through paying, they may run into their own personal money/medical/whatever emergencies and be unable to fulfill their promise.

25k is not an unreasonable amount to payoff considering the young age of each of you. She should definitely keep track each month that the loan is being paid off as required because she will not be able to discharge it ever and she will be responsible for its repayment.
If she doesn't watch it, things may get out of hand and a big chunk of additional interest and fees may accumulate without her knowledge.

Are you concerned that you will not be able to qualify for a mortgage on your own and will need her income to qualify?

Zaga

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Re: Debt question
« Reply #2 on: September 09, 2013, 08:15:29 PM »
I originally had $15K in student loans, same deal as your fiance, parents were divorced and Dad was supposed to pay it back.  He did, 2 weeks after it came due, all I had to pay was the 2 weeks of interest.

But for all of that, I was saving up and prepared to start paying it down myself.  Any reason why you can't pay it off, then if they pay you back, great, but if not just keep moving forward and don't stress about it?  I'd hate for money to come between you and your future in-laws.

rjbf65

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Re: Debt question
« Reply #3 on: September 09, 2013, 08:23:13 PM »
Yeah...I'm not sure what her parents financial picture is but I have a feeling the fiancÚ and I will be on better financial footing than either of them.  23k for us should be easy to knock out. Heck...I could write the check now but I won't until we are married.  Together we will be over 100k income and I'm hoping to introduce her successfully to the ways of the mustache!

Kazimieras

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Re: Debt question
« Reply #4 on: September 10, 2013, 02:04:37 PM »
Trust the parents and hopefully it works out.

I was in a similar situation (sig with a lot of student debt) when we first got together. I could have paid it off, but instead covered living expenses, etc. and let her money go towards her debt. It gave her one hell of a sense of accomplishment from wiping out 30k+ of debt in a little over a year. It really helped her and re-enforced the idea of saving money with her.

rjbf65

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Re: Debt question
« Reply #5 on: September 10, 2013, 05:09:08 PM »
We won't combine finances or households until marriage. So in my mind its her debt now but will be our debt once we tie the knot.  I think I'll go with the plan for the worst approach.  I also want to be able to monitor the loan online.  Thanks for the responses!