Personal Finance: Til debt do us part

Michelle Singletary
Thursday, September 16, 2010; 10:29 AM

We all dread the clichéd break up line: "It's not you, it's me." What if it's really not you, but your debt?

Unfortunately, for one 31-year-old woman profiled in a New York Times story, that was the case. Her debt damaged her love life. The woman had shared with her fiancé that she thought she had student loan debt of more than $100,000. She was making monthly payments of about $1,100. But the fiancé broke off their engagement after finding out she actually had about $170,000 in debt.

That sent her man packing.

In the Times piece, the woman said: "He accused me of lying, but if I was lying, I was lying to myself, not to him. I didn't really want to know the full amount."

This woman's situation brings up important questions: Are people up front with themselves about how much they owe? And when, if at all, they should disclose their debt details during courtship?

Times personal finance columnist Ron Lieber explored this very touchy issue recently in How Debt Can Destroy a Budding Relationship.

My take on the issue is that the first date is too soon and the honeymoon is too late. But of course, that leaves a lot of gray area.

"Even if disclosure doesn't render you unmarriageable, tricky questions linger," Lieber writes.

Lieber asks:

-- If one person brings a huge debt to a relationship, who is ultimately responsible for making good on the obligation?

-- If the debt is very high (like $170,000 in student loan debt) won't the more solvent partner resent that debt over time no matter how early the disclosure comes?

What do you think? Send your comments to Put 'Til Debt Do Us Part' in the subject line.

Capitol Debts

Proposed legislation may be hitting close to home for some federal workers. Data released by the Internal Revenue Service shows debt among Capitol Hill employees has risen at a faster rate then the overall tax debt on the government's books, reports the Post's T. W. Farnam.

The excessive amount of delinquent taxes has prompted Rep. Jason Chaffetz (R-Utah) to sponsor legislation to get rid of workers who are behind and haven't made arrangements to pay their debts.

"If you're on the federal payroll and you're not paying your taxes, you should be fired," Rep. Chaffetz said.

Farnam reports that nationwide, debt to the IRS has been rising steadily, even before the current economic downturn, with $103.2 billion owed at the end of last year. Steve Ellis, vice president of the watchdog group Taxpayers for Common Sense, says federal employees should be held to a higher standard.

What do you think? Should federal employees be fired for not paying their taxes? Send your responses to and put 'Capitol Debt' in the subject line.

Online and Video Chat Today

Let's chat! Join me today at 11:45am for my live video chat. I'll discuss this week's financial stories and answer some of your money questions.

Once the video chat ends, log in to my live online text chat at noon ET.

It's just you and me today, so send me all of your finance questions and comments. If you are unable to tune in, submit your questions early or read the transcript later.

Alternative Route To Riches

Some experts are saying the cost of college or the debt accumulated to pay for it may not be a sound investment as the recession continues to impact families across the country.

Post reporter Sarah Kaufman explores the college debt debate and how lessons taught outside the classroom may be a better teacher and cheaper.

"College is overrated, says James Altucher, president of Formula Capital. "In most cases, what you get out of it is not worth the money, and there are cheaper and better ways to get an education."

Richard Vedder, an economics professor at Ohio University, agrees and thinks accruing so much debt may not be worth the degree. He says in Kaufman's piece that "The gains for going to college have leveled off. The return on investments is clearly lower today than it was five years ago."

However, on the flip side, college degree holders do earn more over their lifetime than folks with just a high school diploma. In 2008, the median annual income of young adults with bachelor's degrees was $46,000. It was $30,000 for those with high school diplomas.

Certainly for many - or most - a college degree will be necessary. But I, too, question the amount of debt students and their parents are accumulating in pursuit of that degree and happiness.

Debt Defeaters

Are you doing a victory dance after paying off a debt? I want to know how you did it. No, not the dance, but getting rid of the bills.

Send your story to Put 'Debt Defeater' on the subject line. Be sure to include:

-- Your name

-- City and state

-- How much debt you've erased (the total amount)

-- How long it took you to get rid of the debt

-- How you got rid of the debt

-- Finally, tell me how it feels to be rid of that debt burden.

Responses to 'Tax Breaks Take Back'

For last week's Color of Money Question, I wanted to know: "Are tax cuts a benefit or burden to your bottom line?" As former President George W. Bush's tax cuts are set to expire, President Obama is looking to get rid of some of the tax breaks that benefit wealthy Americans.

Here are some responses:

"It's an open and shut case from my perspective," says Joe Lombardi of Pleasant Valley, N.Y. " Those making more than $250,000 can certainly afford to return to the 2001 level of taxation. Those making less need help."

Berne Ketchum of Rowan, Iowa doesn't object to the expiration of the Bush tax cuts.

"I recognize the need to begin to try to balance the budget and eventually start to pay down the debt. The cuts were passed with the sunset because Bush and the GOP needed to make the budget forecast work. If we couldn't afford the loss of revenue then, we certainly can't afford it now. This is nothing more than wealthy people having a party to which the rest of us weren't invited, and now they want us to pay the tab."

Denise of Willowbrook, Ill. is among the people whose taxes will increase, and she's okay with the possible jump.

"We shock our friends when we declare our stand, but fair is fair," the reader wrote. "People need to stop being hypocritical. These very same 'fiscal conservatives' scream about deficit control, yet it is okay when a mounting deficit favors their wallets. Money going into the pockets of the other 98 percent of Americans, or money put against the U.S. deficit, will have a more positive impact on our economy."

One high-income reader, who didn't want her name used, wanted to plead her case against the tax cuts for the wealthy being eliminated.

"I make a decent wage for where we live, but I certainly am not rich," the reader wrote. "Collectively, my husband and I make a little over what President Obama qualifies someone as being 'rich.' But he is wrong! We have one child in college and another soon to be in college in the coming years. We live a modest lifestyle and take no vacations, not because we don't want to, but because we can't afford to. We file our taxes and pay what we must, we currently appreciate the tax cuts that are in place."

Upcoming Events

- Saturday, September 18, 4:30 p.m. to 5:30 p.m.: I will be reading excerpts from my latest book, "Power to Prosper: 21 days to Financial Freedom," at the Capital BookFest in Harrisburg, Pa. at the State Museum of Pennsylvania located at 300 North St., Harrisburg, Pa., 17120. Capital BookFest is a FREE, one-day literary festival. For more information, go to

- Thursday, September 23, 7:30 p.m.: I'm appearing at the 2010 Fall for the Book Festival in the Johnson Center lower level (in Dewberry Hall South) on the Fairfax campus of George Mason University.

--Saturday, October 2, 5:30 p.m. to 6:30 p.m.: Come see me at the Boulevard at Capital Centre, located at 900 Capital Centre Blvd., Largo, Md., 20774. For more information, go to

--Thursday, November 4: I will be facilitating the Money Madness session at the Essence Women's Conference located in New York City at the Marriott Marquis. For registration and ticket information, go to

Tia Lewis contributed to this e-letter.

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