From a personal finance standpoint, what would you do in this situation regarding school and work?

You want to go to college.(Finish actually, you have some college. You had an injury so you're on sickness pay to cover daily expenses, you owe way more on your car than it's worth, and it doesn't drive on the freeway due to the transmission, you have bad credit-someone signed student loan docs in your name several years ago which are in default and therefore you can't get financial aid or student loans due to federal student loan default. The bank did offer to help with student loans, only they denied the loans due to the credit. What in this situation would you do to be able to: a.) Travel (have a car to go places such as school etc, possibly work) b.) Go to college c.) own a home, or some type of place. d.) Oneday start a buisiness(restaurant) e.) Work, w/out sickness pay stopping too abruptly Just curious to hear everyone's own opinion and what they would do in this "Real life chose your own adventure" that I have presented for you. I wonder where I got the idea for it? :( Thanks

Public Comments

1. If someone you didn't know signed for those student loans in your name, that's identity theft plain and simple, and there are ways you can resolve that issue. Secondly, if the car doesn't work worth a crap, you can't travel or go to work unless you use the Greyhound to travel or local RTD (bus) to get to work. You wouldn't be able to own a home b/c of the credit situation or own a restaurant either, so the only logical solution would be to work and save money to buy a new car, work on getting the identity theft crap taken care of, and after that, go to school when you could get financial aid.
2. Well it depends on what you really want to do, if school is really important to you, then you might have to make some sacrifices. You can't ever declare bankruptcy on student loans, so either get it cleared or pay them off or they will haunt you FOREVER! If someone forged your name, that is identity theft. First file a police report and then forward the police report to the federal student loan holder, they will do an internal investigation and determine if you are liable for the loan or not. You might have to bug them on a daily basis, but it would be worth it to clear your name. If you can get the debt cleared out of your name, then re-apply for financial aid, and make sure you have documentation that states you are clear of that loan. You also might be able to apply for a private student loan with a co-signer, but the interest rates are high, so beware. Also, consider signing up to work as an AmeriCorps Volunteer. (go to their website www.americorps.gov for more information) You will receive a living wage of $1000 a month that is non taxable for working a 35 hour week, and at the end of the year if you fulfill the terms of the contract, you will received a $4,750 stipend for college. As for the car, there really is no way out of that except to get it fixed or pay it off as fast as possible. In order to own a home, you will have to build up you credit and have a sizable down payment. First pay off all your debts. Even if you just pay an extra $5 or $10 a month toward all your bills, it helps lower the amount you owe interest on and, it helps to build your credit if you make monthly payments on time. Also consider opening an savings account someplace like ING www.ingdirect.com. They require no minimum fee to open, and there are no other charges and they pay 4.7% interest. Even if you put aside just $20.00 every payday, it will add up over the next few years. Last, take a look at what you are spending money on, and eliminate everything you can survive without. If you have cable, shut it off, if you have a cell and a landline, pick one and shut the other off. If you go out to eat often, or are a regular at starbucks, instead, clip coupons, watch for sales, buy store brands, and make dinner at home, and put the money you save into savings or paying off debt. Its not easy, but it can be done. Just dont give up hope... I was in a position very similar about 9 years ago... My car broke down and I had no money to fix it, I lost my job, and as a result, my car was repossesed, and I ended up defaulting on two personal loans, and two credit cards. I decided the only way out was to get an education. I had to depend on public transportation, I worked 2 fulltime jobs every summer and worked one fulltime job during the school year to pay for college. I since have earned my Masters degree. My credit isn't perfect, I was doing pretty good until I had an unexpected uninsured surgery and hospital stay that put me behind, but I have worked really really hard and was finally able to afford a new car, and I have done without a lot of luxuries like cable and dining out so I could save money and pay off my debts. I am still working 2 jobs but they are better paying jobs and I am on target to buy a home in about 3 years.
3. First priority is to get the loan taken care of here. Sounds like until you do that, you can't really do anything else. (Look under "Forged Signature" link.