Defaulted student loan lost

Wow.

I wish I could help you on this one, but I just don't have the depth of knowledge you require. Hang tight. There'll be some more knowledgable folks along directly to help out.

The traffic on the board is light today, because of the holiday. Give it a little while...

[quote]
I have a defaulted student loan. Very old. Principle 19k, interest 19k penalties 9k. Due to unfortunate circumstances I was never in a position to make payments. Now that I have move down south and had a steady job for 2 years I am being threatened with wage garnishment.

OK so I get the garnishment letter, I fill out the info showing my expenses. But you can't show all expenses, like credit cards and home/car repairs, even just a simple haircut. The difference on what I can show and what I make is $300. They want to take the whole 300 which leaves me nothing monthly for any expenses. Can they do that? I have called Dept of Ed, got a kid who kept putting me on hold to look info up. He wasn't helpful. I called NOC the collection agency and they said they can't change the amount they want. Am I done? Do I have a chance to lower the amount? I just can't afford 300. If I send in less than 300 will they automatically start garnishing?


They well could. With the length of your default and the size of the balance, $300 per month to them is deemed reasonable. When you took out your loans, the interest rates were much higher than they are today....you could be as high as 12%. I calculated using 8% and that would equal $250 per month in interest charges alone.


Also, when on hold with Dept of Ed, the message said something about "if you never benefited from your education" press this button. Well I graduated in 91, the economy was in the toilet. I have never and will never work on an airplane. Is there any recourse on that?
Nope

Also I filled bankruptcy in 94. Since then I have worked hard to improve my credit rating. I am at 800 score right now. I have pulled credit reports over the years and never seen a defaulted student loan on my credit report. Why? I don't see the student loan on my bankruptcy and didn't think it could be included. How is that possible?

There is no way your loan could have been included....if you graduated in 91 and filed in 94 you would not have been even close to meeting the 7 rule rule in effect at the time.

I read on the forum that you can make a payoff. Is that something you negotiate? HOw much do they usually take. One post said the principle plus half the interest? So that would be 28k? Is that correct, is that the standard?

With an 800 score, there is no way they are going to waive half of the interest. They might waive all of the collection fees but usually interest waiving is reserved for hardship which with your score you would not qualfy for. Also, if you are a homeowner, dont expect all the collection fees to be dropped either.

If I send in 300 a month for 15yrs I will pay off the amount owed, but interest is still accruing. Will I ever pay this loan off? I have always wanted to work on this, I know its my responsibility but there were a lot of lean years. Very confused and distraught.
Thanks for the help. [/quote]

Running just basic calculations with your current balance and an 8% interest rate you would be looking at a payment of about $460 for just the principal and interest and then another $100 per month or so for the collection fees. Then you also need to take into account that fees are paid first, so until you pay off the $9000 in collection fees, your P+I balance wont even be touched.

Ok so I guess I am done. :(

And no I don't own a house and I never will.

thanks for the info

donkt dispare spartausri, i know the truth hurts but I believe in miricales, donkt give up, there is always a way. Im almost in the same boat as you and cant get any help or advise from anyone either.


Luke

seriously do you have an 800 credit score and your feeling sorry for yourself. You didn't get that score making bad decisions, before you just give up, make sure you have looked at all your options

amen guest

I am not giving up but it seems pretty endless at this point. If they didn't charge any more on my loan I would have to pay $300 monthly for 15years. If they didn't charge any more. I am just a little flustered with that whole amount. I am single, no house, getting by after a lot of years of not working. Believe me I always wanted to pay my loan but if its between eating and the loan guess which one wins. It kills me that I have never and will never get to use that education. I am in a totally different field. Getting the run around from the Dept of Ed and collection agency is also frustrating. I talk to one they tell me to call the other, I call them they tell me to talk to other. I just want someone who knows what they are talking about to answer my questions and work with me.

Now for my high credit score. Doesn't it seem odd that it is so high with a defaulted student loan? The loan never appears on my credit report. But anyways, I filed bankruptcy in 94. 6 months later I got a credit card sent to me. Only 500 limit and 21% rate but it was credit. I would charge something and pay it right off. I did that for a long period of time. I rarely have outstanding credit. The last two years since my move down south I have had a large credit balance but its on a zero interest card and once the zero interest goes away I transfer to another card with zero interest. CAuse of my score I get the cards easily. So you always hear about "don't pay off the credit card balance." Well I always have and I have a great score. Weird.

thanks

Your score could still end up tanking pretty quick. If you borrowed in the early 90's you probably had a FFELP loan. More than likely your loan is due to be subrogated by the DOE which will cause the DOE to start reporting all over again. The BK filing would have slowed this process down.

You are going to need to increase your income. Best suggestion is to get a second or part time job.