Defaulted Student loan

[superbobu2]

What is the name of your state? NC

I had a student loan back from 1991. Because of lack of work for quite a long time I went default on it. Now 16 years later I just got a letter stating that the dept of education is going to garnish 15% of my wages. That would totally screw me. My goal has always been to save money and one day negotiate a payoff with them. I was close once but again lost my job because my department was shut down and wasn't in position to save enough. I have been in NC for almost 2 years and at my current job for just over 1 1/2 years. This is the longest I have had a job since 2000. UP north things were tough, couldn't find steady work or anything that paid decent. Did a lot of work for cash. Looking back over the past 16 years they will see there were years that I made very little money. I am thinking of getting a lawyer but will he be able to do anything? I claimed bankruptcy in 1994 but since then have built my credit and currently have a score around 800. This loan never shows up on my credit report. Original loan was 15k they now want 50k after penalties and interest. Will a lawyer be able to negotiate a fair settlement like one time payoff or a reasonable monthly payment or am I just screwed? 15% a month would kill me right now. Working steady but still got debt I am trying to pay off.

thanks

[Debt Guy]

In my opinion, a lawyer would not be able to help you negotiate since you have no leverage. You cannot bankrupt a student loan and they are garnishing your wages for 15% of your after tax pay. If they have that leverage over you, why would they accept a short payoff or a monthly payment less than they are collecting through garnishment? They would not and neither would you if the situation were reversed.

Go ahead and talk to a lawyer but I would not hold out much hope.

I have two ideas. First, contact the lender and see if they will allow you to rehabilitate the loan -- it is a long shot but they might. Second, if you have an 800 credit score, borrow the money and payoff the student loan.

By the way, you are not screwed. You are merely being asked to honor the contract you freely agreed to.

[superbobu2]

Its not that I didn't want to pay the loan, but I couldn't. Even now I am doing better working steady for first time in years but not at a point where I can afford to send a couple of hundred to a loan. I don't have a house, or go on lavish vacations or eat filet mignon every night. The original loan was 15k they now want 50k. It will be with me the rest of my life. So yeah I am screwed.

[wisone]

Superbobu2, who had your loan before the garnishment? The reason I ask, is that my wife is in the same situation. Her wages just started getting garnished this week. I called yesterday, and talked to ECMC, the company that was dealing with her defaulted student loan. The agreed to stop garnishment, if we would agree to make 9 monthly payments. We did a budget with them, and agreed upon an amount that we would pay each month, for 9 months. After 9 months, the loan would then be brought out of default, and transfered to a new loan company, where we would have to work out new payments.

[Debt Guy]

Super

I debated with myself whether or not to respond to you. I don't want to come off sounding "holierthan-thou" or that I am talking down to you.

I hope you are able to get the loan rehabilitated. I encourage you to call the lender, the department of education, your high school principal or anyone who might be able to help. I am not much convinced that hiring an attorney would do anything for you that you cannot do for yourself if you get after it.

This is the one area of credit where I have no hands-on experience as I was fortunate to be able to repay my modest student loans many years ago. All I know comes from the experiences of others. As has been pointed out, sometimes you can get the loan rehabilitated.

I don't know what you expected with the defaulted student loan. I am sure you understand that the taxpayers who funded your education are entitled to be repaid. Sympathy and understanding only goes so far. From your original post, I conclude that you just stopped talking to the student loan servicer. When that happens, all they can do is get your attention any way they can -- I truly hope that is all you are dealing with is a servicer who has gotten your attention.

It is OK to feel sorry for yourself. I just think you are wrong to think you are picked on or that somehow you are "being screwed". You are not being identified for special punishment.

Final thought on the balance due -- from $15k to $50k is a big jump. You really need to read the original loan agreement and figure out if the amount due is close to accurate. Albert Einstein said the most powerful force in the universe was compound interest. He was right.

Good luck to you.

[superbobu2]

No I don't feel picked on. I find it weird after 16yrs they have finally decided to garnish my wages. I have worked steady some in the past and never heard from them except for a letter here or there reminding me I owe them. My plan has always been to payback the loan. I know my responsibility. Just never had the opportunity. After graduation I was pretty much out of work for 2 years because economy was so bad. I now live down south and have a steady job and trying to do something with life. Not living lavishly just living. In 6months my credit cards from moving down here will be paid off and then I was going to start saving to pay off the 15k. But 50k? I might as well just give up.

Yeah you did come off as a smartarse. I am not looking for information on how to get out of this just trying to work something out beneficial to both parties. I rent a modest apartment and don't want to end up on the streets or a burden to someone cause of a garnishment.

[milspecgirl]

chances are a new lender is not servicing your loan and that is why they have showed up out of nowhere. your case was given to someone new. they can and will garnish your wages. you can't bankrupt it.
call them and talk to them- it's ur only option

[superbobu2]

ok so to update. I talked to a few lawyers today. They all told me I am SOL. So thats that. They want 50k. I don't make anywhere near that. They are going to take 15% of my pay per check which means I will not be able to afford my apartment alone. Not like I have a huge lavish apt either but no way I can do it alone. So I will be a burden to a friend or live in a small one bedroom in a really bad neighborhood and maybe I don't get shot or mugged. Now they will keep taking my money every month but it will never pay it off cause the interest keeps accumulating and here is the great news. When I am old they will take my social security. Thats right folks, for some of you who have responded or read my post and have defaulted student loans the supreme court ruled that they can take your social security. Nice huh!

This loan is from 16yrs ago. May 91 I graduated. I didn't find steady work for 2 years after graduation and it was not in the field I went to school for. I was a good student in high school but I wanted to hit the job force quick and make some money so I chose a technical school for an education. 2 years later no airlines were hiring and I had student loans up the rear. No job no money just a bill. It has weighed on me all these years but never been able to save enough to pay it off. I could do the 15k but 50k? Thats a house, and I don't own one, not even close and now never will. Also never get married. Who wants to be with someone who is insolvent financially. So life is over. I am in my late 30s and life is over. But I am in great shape so I get to hang on to this crap for the next oh 50yrs? Yeah I need a drink. OH but I am not an alcoholic or do drugs or any bad habits. Could never afford them. I do have bullets. They are cheap. Good luck if you have loans.

[Ozark_Sophist]

$50K is not necessarily a large amount--especially after 16 years of default. My B-I-L has $250K as a result of his default. His last job was as a school bus driver (with a masters degree).

A couple I went to school with had $300K by the time they each got their Phd.

Defaults raise the rate for everyone else getting a student loan. I would appreciate you and my B-I-L start to pay for your education.

[milspecgirl]

Originally Posted by superbobu2

ok so to update. I talked to a few lawyers today. They all told me I am SOL. So thats that. They want 50k. I don't make anywhere near that. They are going to take 15% of my pay per check which means I will not be able to afford my apartment alone. Not like I have a huge lavish apt either but no way I can do it alone. So I will be a burden to a friend or live in a small one bedroom in a really bad neighborhood and maybe I don't get shot or mugged. Now they will keep taking my money every month but it will never pay it off cause the interest keeps accumulating and here is the great news. When I am old they will take my social security. Thats right folks, for some of you who have responded or read my post and have defaulted student loans the supreme court ruled that they can take your social security. Nice huh!

This loan is from 16yrs ago. May 91 I graduated. I didn't find steady work for 2 years after graduation and it was not in the field I went to school for. I was a good student in high school but I wanted to hit the job force quick and make some money so I chose a technical school for an education. 2 years later no airlines were hiring and I had student loans up the rear. No job no money just a bill. It has weighed on me all these years but never been able to save enough to pay it off. I could do the 15k but 50k? Thats a house, and I don't own one, not even close and now never will. Also never get married. Who wants to be with someone who is insolvent financially. So life is over. I am in my late 30s and life is over. But I am in great shape so I get to hang on to this crap for the next oh 50yrs? Yeah I need a drink. OH but I am not an alcoholic or do drugs or any bad habits. Could never afford them. I do have bullets. They are cheap. Good luck if you have loans.

oh cry me a river. I have 35k in student loans, but you know what - I didn't try to skip out on them and default for 16 years. Got a job out of college making 9/hr. But you know what, I called them right then and there and got a pymt schedule worked out. Amazing how they are willing to work with you when you don't try to keep from paying them. Don't give me any bullcrap about how you were eventually gonna pay- BS- 16 years proves that. My sis has 75k in loans. Didn't have problem getting married. Had to take a 2nd job for awhile to make ends meet. Own up and take some responsibility for your actions. It's not the govt's job to send you to school or to support you if you chose a crappy field or are so anxious to jump into the workforce or make crappy decisions or anything else. You signed the loan papers, you knew there was interest and penalties. If you were too stupid to read the papers, that's your own fault.
Why should you get a 16 year break on pymts without interest or penalties when the rest of us took 2nd jobs, etc and paid ours like we were supposed to and we didn't get any breaks. What makes you so freakin' special?
Advice? Get out of your pity party, get a 2nd job, quit whining - no one likes a crybaby (that's why you'll never be married) and pay your DA** bill.
Did you even try to talk to them to get them to settle at all or did you just spend all day whining to attys (who I can guarantee have WAY more in student loans than you ever thought of)