Drowning in student loans

Hi BreidenbachC

At this point, you should consolidate your credit card debts and pdls with one debt management company. You must do it now before any of the creditors decides to file a lawsuit against you for not paying the debts. Once this is done, call the private loan companies and try for some payment arrangements. You need to increase your source of income to keep the payments rolling every month. If you are unable to pay everything simultaneously, apply for forbearance on the student loans. They can wait for a while when you are paying your other debts.

Thank you for the advice. I did try to work with a credit counselor to consolidate my debt, but they stated they could not help me and stated bankruptcy might be my only option. Which as I mentioned, isn't really an option for me at this time. There is no way I can increase my income. As it is, I leave home at 6:25am and don't get home until 7:00pm at the earliest. Some nights I don't get home until 9:00. I tried to work two jobs a few months ago and it nearly killed me, plus my two children need me around more than what I am now. So...basically, unless I win the lottery I am screwed! All I can do is hope I can defer the loans until I can find some way to get my cosigner off and then file bankruptcy.

I would definitely asked for a forbearance. A forbearance is when the loan agency agrees to stop trying to collect for whatever period of time (could be a year). They will not send you a monthly bill, they will not call you for payments during that time.

You will eventually have to begin making payments, however at least you have some time off to start putting some money aside for these payments, or perhaps finish paying off another debt first.

Good luck!

I'm not trying to be flippant, but with $248K vested in your education, shouldn't you be near a doctorate's degree?

The problem with student loans are 1) federal loans directly through the government will not be discharged in a Chapter 7; and 2) even private student loans are sometimes guaranteed by the government, which means they might not be discharged in aa 7 either.

If you were to file a Chapter 13 and include the student loans, the court will set a monthly payment based on your income. Also, while you are in a 13 plan, they cannot go after you co-signer. The automatic stay applies to the debt itself, not just one party to the debt.

I know this because I had a guy take out a loan from me, put his car up as collateral, and his mom co-signed (she was not on the title to the vehicle). The loan went delinquent, the mother filed a Chap 13 BK. I called my attorney to see if I could still repo the car ... after all, in my eyes she was merely a cosigner and not on the title at all ... my attorney told me I'll get sued if I take the son's car while mom's covered under the BK.

Getting back to my point, you might not end up sticking your co-signer with the bill just because you file a BK. I would suggest calling a bankruptcy attorney and bring up the situation - see what they say about your co-signer.

I don't normally suggest bankruptcy, but if you don't even make enough income to cover the student loans, there really is no other options besides finding a job that pays more.

Worst case scenario is, that if you don't go bankrupt and they all decide to sue you eventually, you can only have one garnishment going at a time, and the garnishment can only take maximum 25% of your paycheck.

DebtCruncher,
You are completely right, with all my loans I should have a doctorate degree. Yet, I was really really stupid. I have bipolar disorder and tend to be impulsive when I am in my manic stage. My weakness is money and the stupid student loans were just way too easy to get. I would get one, plan to use it for bills, get manic and then blow it. So, I would get another and another and so on. All that debt and I only have my bachelors degree. The good news is that my new job offers tuition reimbursement. SO, I can get my masters for free.
Anyway, Thank you so much for the advice. I really do appreciate it.

CHOOSE YOUR REPAYMENT PLAN CAREFULLY. "There are a number of different repayment options to help you manage your monthly payments," offering income-based and interest-only payments as examples. Borrowers can also extend their payment terms to lower the monthly payments.

"Each situation would apply for borrowers who are in a position where they need to minimize their monthly payments. Perhaps they are a recent graduate who has just entered the work force,"

* STAY IN TOUCH WITH YOUR LENDER "Make sure they have your current address. You don't want to miss the bills,"

* PAY ON TIME. "It's the best thing to do," Korsvall says. "Sallie Mae offers an interest rate discount when you pay on time. There are no pre-payment penalties."

Hey, I know how you feel. I am in the same student loan boat. I owe 49,000.00 and I have 25K in a debt consolidation program currently, so that is one less worry, but I still have 49,000.00 worth over my head.

I have learned from THIS forum that if you pay them monthly, Say 100.00 because that is all you can afford (even if they request a payment of 381.04) that they CAN NOT put you in default. Of course, they will probably hound you like a bloodhound and you will have to explain to them on more than one occassion your situation, but as long as you are paying something, it is my understanding you can not default nor will they try to garnish your check. They can have my income tax--I will let my ex husband claim both of our children and I will change my w4's to more dependants -- so that they will get hardly a penny from my refund.

I will be paying 100.00 a month for the rest of my life, and as long as it is not in default....I will be ok doing this. I have heard that after you pay for 20 or 25 years that they write off the remaining balance. Has anyone else heard this?

I am a former financial aid officer major university plus I spent almost a decade collecting on defaulted student loans for both the DOE and several FFELP guarantey agencies.

If you consolidate with the Direct Loan program, after 25 years in repayment, they will write off the remaining balance of your account. You will be sent a 1099 on the written off portion and you do have to declare it on your taxes.

Private Loans. Bankruptcy laws changed and like federally insured loans, it is next to impossible to file BK on private student loans. Even when you file a chapter 13, the remaining balance with accrued interest becomes due again at the discharge of the BK. There are some private loan consolidators out there, so there is always the possiblity that you can lengthen your term to lower your payments. Otherwise, private loans are pretty deadly....they will sue for judgement as a routine practice.

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Thanks Soaplady for the information.

I am not in default as of yet. They are not going to take my taxes, as I just got approved for yet another year of forebearance. When and if they start getting ugly with me when I start paying WHAT I can and NOT what they are demanding....I will make adjustments to how I file my income tax.

Thanks for clarification on the 25 year repayment write off. Since I have NO assets now, nor will I ever own my home, I will be able to claim insolvency on the forgiven amount.

I am in a similar situation have federal student loans through SallieMae 30,000 about paid dutifully for 6-7 years needed a forbearance for a year the next year out of my own stupidity did not pay for a year called to try to work something out was told to pay well over 1,000 (which I cannot afford) to get a another forbearance which would be good but I am trying to begin to pay on loans again with something affordable I was told I had no other option but to let it go into default and suffer the consequences of it going into default

AWhite....have you consolidated your loans yet?? If you have not, now would be the time to do so. Information on consolidation is in the links at the top of this forum.

sorry I have posted a message on your page explaingin a little more about my situation I am a little new with using these message boards

since my post I received a letter from some agency who bought my loan from salliemae because it is now in default (I thought it took a long time like years and years for a loan to go into default and for the government to garnish wages or income tax, I have not paid for one year) it says that I must pay the full, a little more than 25,000. I do not have it. On the letter it states that I can call to set up a payment arrangment as an option (I think this is good. Is it really? Also I would like to know if I go back to school on scholarships to receive a masters will my loan be deferred?

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