Student Loan Defaul/Collections/Garnishment

Hello,
I graduated from professional school 6 years ago and suffered personal and emotional setbacks including midlife crisis (uncertainty of career choice), depression, and drug/alcohol abuse that also caused an end to a long-term relationship, which viciously cycled upon itself. In the process I simply ignored letters and phone calls from the creditors and Dept. of Education - I didn't open them for years, not even the ones stating that I was going into default and garnishment.
Now I owe nearly a quarter million dollars after interest and penalties.
I am 45 y.o., have no assets and am working in a low-paying job making less than $35K with no benefits. To be able to work in the field of my professional training (Chiropractic) will take some time since I must make up continuing education credits and get licensed.
I need advice badly. I need to know there's hope. Who do I talk to? What can be done to bring this debt within range that I can hopefully pay in my lifetime and still be able to build a decent life (what's left)? I want to fix this.
Any and all help and advice will be greatly appreciated.

Sincerely,
Robin (in Illinois)
[email protected]

Well, your first mistake was ignoring the letters. Student loan debt will never, ever go away, unless you die or become totally & perm. disabled. Getting them kicked in bankruptcy is tough, and that is a major understatement.

As a former debt collector who specialized in student loans, I will tell you ignorning it was your first major mistake.

Do a google search for William D Ford. Ask them to send you a consolidation package. They can consolidate your defaulted loans, penalities and all. That will take them out of default, and it turn, make you eligible to put them in forebarance. It also makes you eligible to take out add'l loans if needed for school.

When you consolidate, they give you THREE payments options, one of which is income based. They will look at your tax records and determine what should be paid with that plan.

The whole process should take about 3 months. So, the sooner you start it, the better. When you get the "paid in full" from the orginal loan holder, GUARD IT WITH YOUR LIFE. (Once the loans are consolidated William D Ford will be the only place you make payments too.) And don't default again, because one you consolidate that's it.

If you decide to continue to ignore them, they can take your tax refunds, garnish your wages and levy a judgement against your back account. No amount of pleading in the world will get them to stop that as long as you owe the money and are in default.

Good luck.

Illinois ....

lostsoul23 said:

Well, your first mistake was ignoring the letters. Student loan debt will never, ever go away, unless you die or become totally & perm. disabled. Getting them kicked in bankruptcy is tough, and that is a major understatement.

As a former debt collector who specialized in student loans, I will tell you ignorning it was your first major mistake.

Do a google search for William D Ford. Ask them to send you a consolidation package. They can consolidate your defaulted loans, penalities and all. That will take them out of default, and it turn, make you eligible to put them in forebarance. It also makes you eligible to take out add'l loans if needed for school.

When you consolidate, they give you THREE payments options, one of which is income based. They will look at your tax records and determine what should be paid with that plan.

The whole process should take about 3 months. So, the sooner you start it, the better. When you get the "paid in full" from the orginal loan holder, GUARD IT WITH YOUR LIFE. (Once the loans are consolidated William D Ford will be the only place you make payments too.) And don't default again, because one you consolidate that's it.

If you decide to continue to ignore them, they can take your tax refunds, garnish your wages and levy a judgement against your back account. No amount of pleading in the world will get them to stop that as long as you owe the money and are in default.

Good luck.

Click to expand...

Thanks for your reply.

What about negotiating the debt amount?

Thanks,
Robin

What about negotiating the debt amount?

Click to expand...

A suggestion for answering that for yourself would be to educate yourself to all of your options.

You don't say what percentage your student loans are to your total indebtedness or whether they are your total indebtedness.

A consolidation loan is just that - a loan - and you will repay it with interest. You might wish to weigh your present ability to re-pay with and without a loan, your ability to effectively negotiate and what, if any, portion of your debt is open to negotiation.

robin2660 said:

Illinois ....



Thanks for your reply.

What about negotiating the debt amount?

Thanks,
Robin

Click to expand...

That is something you need to deal with directly through the lender. But, if you are in default, chances are it's not going to happen, but it's always worth a try.

The consolidation through William D Ford will pay off all the student loans, and penalities. You will in turn only pay them each month, and, you can in turn put them in forebarance if you need to. They will offer you three different ways to pay back. As I mentioned before, the process takes about 3 months to complete, and the sooner you start the better.

federal student loan consolidation

lostsoul23 said:

That is something you need to deal with directly through the lender. But, if you are in default, chances are it's not going to happen, but it's always worth a try.

The consolidation through William D Ford will pay off all the student loans, and penalities. You will in turn only pay them each month, and, you can in turn put them in forebarance if you need to. They will offer you three different ways to pay back. As I mentioned before, the process takes about 3 months to complete, and the sooner you start the better.

Click to expand...

Hi there, I recently graduated and decide to consolidate my federal student loans at Iowa Student Loan, I found them on google. They are at www.iowastudentloan.com. . I have to admit it was pretty easy to do and my payments will be about half as much now. I recommend that you consolidate like I did, I dont know how long it would take for you but for me is was a few weeks.

advice from default claims processor

If your loans were actual student loans (not personal loans taken out to pay for education) you will always have these on your credit. I worked for 3 years for NELNET, which is a nationwide student loan servicer, in the default, bankruptcy and appeals claims dept. These loans are NEVER forgiven, not even through bankruptcy.

If they have been in repayment for over 270 days, and you have not made arrangements to get them deferred, consolidated or get a forbearance, you may be too late. Once a default claim goes to a guarantor, the borrower is S.O.L. sorry to say.

Repayment begins (for student loans other than SLSS or PLUS) 6 months and one day after you separate from school. If borrower doesn't make attempt at repayment or options (deferrment, forbearance or consolidation) within the next 270 days, the loans default and the claims process begins. The servicer can file the default claim to the guarantor anytime after that 270 days, up to 325 days past due.


What you need to do:

Contact your student loan servicer, IMMEDIATELY.

They will tell you where your loans are in the process (how many days past due and where they are in the filing process).

They can offer many options as far as getting deferrments, forbearances, several repayment options (including income sensitive payments), and consolidating. These will help salvage what is left of your credit.

As long as you get ahold of them ASAP and reaffirm your intent to repay the loans, they will do something to help you out. Fines/penalties, late fees, and interest will not be removed from your balance unfortunately.

Student loans will never go away until you repay them. They will continue to haunt you and your plummeting credit score for the rest of your life.

If you don't take care of this, know that defaulting on student loans is particularly unfavorable in the eyes of anyone considering extending you any type of credit.

If you don't know the servicer of your loan contact your school or the fafsa website
http://www.fafsa.com/servicers.htm

Good luck and really, don't ignore this anymore.