Making $275K as a dentist, $400K owed in Federal Student Loans, $120K behind on Taxes

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Submitted by no_such_reality on November 12, 2012 - 1:47pm

Submitted by UCGal on November 12, 2012 - 2:10pm.

If he'd been astute - he would have declared bk before the laws changed a while back... Student loan debt used to be dischargable.

And there's a lesson to learn from this for astute piggs.... Don't cosign student loans with your kids. They can and DO garnish your social security when you're retired if your kids default on the loans. I'm not saying don't help you kids in college... But there are ways to do it that won't involve eating cat food in retirement because you're not getting the soc sec. you expected.

Submitted by no_such_reality on November 12, 2012 - 2:17pm.

Astute he isn't.

The article is just one OMG after another for financial incompetence.

But hey, good to know the Dentist that couldn't make $15K in private practice can pull in $275K working for the prisons.

Submitted by bearishgurl on November 12, 2012 - 2:41pm.

UCGal wrote:
If he'd been astute - he would have declared bk before the laws changed a while back... Student loan debt used to be dischargable.

And there's a lesson to learn from this for astute piggs.... Don't cosign student loans with your kids. They can and DO garnish your social security when you're retired if your kids default on the loans. I'm not saying don't help you kids in college... But there are ways to do it that won't involve eating cat food in retirement because you're not getting the soc sec. you expected.

Good advice, UCGal.

Submitted by spdrun on November 12, 2012 - 2:48pm.

He mistakenly made payments to the university -- what happened to THAT money: it didn't just evaporate. Someone was a gonef here.

I'm surprised that he doesn't just bug out and head back to his birth country -- I'd be surprised if they'd extradite a native-born citizen and he could live very cheaply there.

Submitted by no_such_reality on November 12, 2012 - 2:49pm.

Why would he? He's making $275K a year not including his wife's income that is also working at the prison.

Submitted by spdrun on November 12, 2012 - 2:54pm.

$275k less 50% for taxes = $137.5k/yr = $11.5k/mo

$11.5k/mo - $3k (loan) - $6k (back tax) = $2.5k/mo

Looks a bit less good, no?

Submitted by no_such_reality on November 12, 2012 - 3:04pm.

spdrun wrote:
$275k less 50% for taxes = $137.5k/yr = $11.5k/mo

$11.5k/mo - $3k (loan) - $6k (back tax) = $2.5k/mo

Looks a bit less good, no?

OMG, he needs a pay raise!

Submitted by bearishgurl on November 12, 2012 - 3:08pm.

I don't know about the state, but county public law in CA provides for "mandatory retirement" at the age of 72. Since this SL debtor is already 71, I see his state pension (of which a portion is already offset by SS) AND his SS garnished until he dies. Not sure it will come to $3K per month, though.

There is absolutely no excuse for a person who has been a dentist for ~30 years to still be carrying any kind of personal student debt at all.

Submitted by ucodegen on November 12, 2012 - 4:06pm.

One of the best ways to 'help your student' when going to college, particularly if they are in a different location, is to buy rental property in that area. Kid is responsible for the roommates. In the 4 to 8 years that it takes to complete (depending upon degree and field of study), you come out ahead on the property, monthly payments help defer cost and it allows you to cover one of the largest costs of education these days - living costs.

Submitted by UCGal on November 12, 2012 - 4:07pm.

spdrun wrote:
He mistakenly made payments to the university -- what happened to THAT money: it didn't just evaporate. Someone was a gonef here.

I'm surprised that he doesn't just bug out and head back to his birth country -- I'd be surprised if they'd extradite a native-born citizen and he could live very cheaply there.


I read and reread that section (which was poorly written). He didn't make payments for the student loans in question (which were only a part of his total student debt.) The student loans in question were $50k, and he had another $50k in other student debt.
Presumably the payments to the university were for this other debt.

He also had quite a path to becoming a dentist... was a bit of a perma-student... Got a masters in public health before starting the dentistry program. That increased his debt load some, I'm sure.

Submitted by ucodegen on November 12, 2012 - 4:09pm.

After borrowing $50,000 in the 1980s and ignoring payment notices, Gyaami owes more than $500,000 with penalties and interest.

I wonder what those penalties/fees are.. because with interest, it should be about 150,000.. not 500,000.

Submitted by bearishgurl on November 12, 2012 - 4:32pm.

ucodegen wrote:
One of the best ways to 'help your student' when going to college, particularly if they are in a different location, is to buy rental property in that area. Kid is responsible for the roommates. In the 4 to 8 years that it takes to complete (depending upon degree and field of study), you come out ahead on the property, monthly payments help defer cost and it allows you to cover one of the largest costs of education these days - living costs.

I agree and am looking into this ....

Submitted by scaredyclassic on November 13, 2012 - 5:34am.

was looking at a tiny 400 square foot house witha nice porch area in Pomona. listed at 89,000. maybe he could get a roommate...probably be better to see if he actually got in...and see if he made it through the first year..

Submitted by flu on November 13, 2012 - 6:08am.

bearishgurl wrote:
I don't know about the state, but county public law in CA provides for "mandatory retirement" at the age of 72. Since this SL debtor is already 71, I see his state pension (of which a portion is already offset by SS) AND his SS garnished until he dies. Not sure it will come to $3K per month, though.

There is absolutely no excuse for a person who has been a dentist for ~30 years to still be carrying any kind of personal student debt at all.

Pensions probably do not get garnished because I believe they fall under retirement accounts and usually creditors can't go after retirement accounts. But there are ways around it...

http://online.wsj.com/article/SB12437978...

Learn my friends. You never know when you might need the knowledge...

Submitted by ocrenter on November 13, 2012 - 8:00am.

no_such_reality wrote:
spdrun wrote:
$275k less 50% for taxes = $137.5k/yr = $11.5k/mo

$11.5k/mo - $3k (loan) - $6k (back tax) = $2.5k/mo

Looks a bit less good, no?

OMG, he needs a pay raise!

That is so far from reality it isnt even funny.

I don‘t know a single professional that has to pay that type of rate on taxes. For something more reality based, divide above estimate by about half.

As for the above rate, thats the rate used to gain sympathy when the help is requesting a raise.

Submitted by EconProf on November 13, 2012 - 9:51am.

OCrenter is right because he was able to distinguish between AVERAGE tax rate and MARGINAL tax rate. A lot of journalists and politicians also get this wrong.
Average tax rate is your income tax paid relative to total income. Marginal tax rate is the amount of tax paid on your last dollar earned, or the next dollar you chose to earn. In a progressive tax system like ours the first few thousand earned have no tax levied in a particular year. Once earnings get high enough, the marginal rate marches up to about the 50% level, state plus federal, depending on the state. In CA the highest federal marginal tax rate is in the mid-30% range, and the CA state highest marginal tax rate will soon be 13.3%, thanks to the passage of Proposition 30. The fed rate will go up in 2013 too (even if the fiscal cliff is avoided). That means the marginal rate for high earners will soon be well over 50% for Californians.
Economists like to concentrate on the marginal rate, because that is what people consider in their decision-making: whether to earn more or less, move to another state or not, put another family member to work, etc.

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