Student loan debt after reconsolidation twice

Your wages cannot be garnished if you are paying the student loans each month. The loan company has to update your account with the payments received from you. This leaves no reason for them to file a case against you. Make sure that your consolidation company is confirming the payments received by the loan company in writing.

Don't get scared of the threats made by the loan company. Creditors often do it to scare the people so that they get the money in quick time. Your payments done so far will be counted first before it results any actions against you. Ari will be able to offer you some more practical advice on this issue.

Hey there LJClark here I am! I used to collect student loans, so you can ask me anything you want! From what you are telling us, you have kept this in forebearance until now, and you are ready to make payments. The tax return divided by twelve is a good start, and since you mentioned an income-contingency plan, please keep in mind that the absolute minimum payment acceptable is $50 just as long as you keep up with it every month.

So far, it doesn't look like you are in default. Also, keep in mind as well that if you do default, the collection agencies that handle student loans MUST conduct business by the fdcpa. Also, when you do default a loan, your options decrease somewhat. Defaulted loan interst grows like wildfire. In default, you will be asked to rehabilitate, which calls for a 4% down paymetn for a loan of your size, and 1.5% installments thereafter until your loan is refinanced, in which case your loan comes out of default and you are given nine years to finish repaying. I know that the percentages we're talking about here are not sensitive to any income! That is what I meant when I said that defaulting decreases your options.

After you've paid your $208 for one year, as long as you make consistent payments of $50 monthly you should be ok.

I reconsolidated with A.C.E They bought off my loan from Sallie Mae.

I have never paid a dime.

I have never defaulted either by using deferrment and forebearance.

I will be told what my min. payment will be in April 2007. WHAT IF......

They say your min. payment is 306.00 and I can only send in 208.00?

You are telling me that this goes to default and I am screwed???

or does it stay out of default if you are paying faithfully. The only way I will be able to pay anything at all is by dividing my income tax by 12 and doing it that way....

Jedi....with your experience, what do you see happening???

I have student loans, LJ, when I took the student loan pre-application quiz, it clearly stated that the minimum acceptable monthly payment is $50.

Being in default of a student loan is not the end of the world, you will just be in a pickle until you get a better paying job. Since you're not in default paying $208 will not render you into default, the only reason why they insist on $306 is because of the interest, they will not refuse your payment.

Did you inform them of your plan with your tax return? It would help a great deal if you gave them a heads up on that and negotiated it from there. Keep me posted, pm me, e-mail me, just keep me informed of all your dealings with the Dept. of Ed.

Yes, I told the company that the only way I could afford to pay them anything at all was to use my income tax return and divide it by twelve. They said they understood, but lets see how fast they understand when I get my coupon book and it says 376.00 due and I only send in 250.00.

I only have 4 years of forebearence left and I don't want to use anymore of that crap...I need to start paying something soon.

I figure I will pay and pay on it forever and ever. Also my grandma is leaving me 15,000.00, think they would settle for 15,000.00 on a 48,000.00 student loan????? I am willing to kiss it goodbye to get the student loans far, far away from my name.

Also, would it have to default to ask them to settle for 15,000.00?
or what.

GIVE me all the advice you can.

About a better paying job? THIS IS IT. I have been at my job for 9 years and I am not going anywhere. The pay sucks, but it is the best job in town and it has great benefits! Plus I enjoy helping others and I am a social worker. My husband has no college education and he goes job to job and sometimes is out of a job period.

Sorry, I don't think $15,000 would even cover the principle in a settlement. The bare minimum settlement amount is principle plus half interest.

If they said they understood the payment arrangement you presented, take it at face value! They accepted it didn't they? Just remember, that when not in default, the minimum acceptable payment is indeed $50. THe coupon book is based on a set number of years plan, if you were to pay what you can, you would just take longer to pay it off, you wouldn't be defaulting unless you skipped one whole month.

While you have four years left on forebearance, have you considered relocating? If you and your husband are not exactly blooming where you are planted, do a little research on what cities are more fiscally fit, and give yourselves a do-over. Think about it, if you are making less than you're worth and your husband is just barely moving laterally, then you're not in the best economic area. In this situation, you'll never retire and you'll be in a serious world of hurt when you're older and there is no pension of 401k for either of you to survive on.

so you are saying....AS long as I make the payment of more than 50.00 then I won't ever default (even if it is not the full payment they want??)

No, nothing is set in stone and they have not accepted anything yet. This was just "small" talk about my future plans to start paying next year. They of course were happy and talkitive. I wonder if they will walk the walk at that time though.

What makes me madder than the dickens is when I graduated it was just 24,000.00 it added interest over the years to a whooping 48,000.00 and it just chaps my rear end. They ought to knock that all off, but I don't see that happening. Especially since this new A.C.E took over and purchased the 48,000.00 from Sallie Mae.

Is there anyway to bargin that total price down and to try to settle and make payments on that amount???

I don't want to pay on this damn thing forever. It has been 10 years since I graduated and seems like they would just write it off....

I think I am dreaming.

Oh, and will that keep them from every intercepting my taxes, If I am paying "a regular payment" monthly.?

Correct!

"Default" is going sixty (60) days without any payments. Only then can they garnish wages or offset taxes. As long as you pay at least $50 every month, you are remaining current.

By the way, based on what you're telling me. If you hade the option to settle, your principle is $24,000 and your current interest is the same. As of right now, you're minumum settlement amount would be $36,000.

Say I inherit 20,000.00

Is there anyway to settle on the 36,000.00 and pay 20,000.00 and payment plan on the remaining 16,000.00?

That wouldn't be a settlement. That would be a payment plan with a down payment of $20K and you'd have to pay the rest of the $28k monthly. That would be more befitting of a Repayment Plan.

Settlements are lumps sums only.

Is there any debt settlement companies that do accept student loans?

I hate them...I did not even do them. My mother filled out the paperwork and signed my name to them and sent them in for me. She knew I would have to pay them back. She did not tell me, they just sent me off to college...and told me where to pick up my student aid. hell, I thought it was grants not loans, until I got like a big coupon book the month after graduation.

OMG. I would have rather worked part time to pay for my college than took out 8000.00 each semester.

There are, but most CA's that specialize in student loans are pretty honorable. Collection Company of America and Nationwide Credit Inc. to name two. But you're not in default! So stop worrying abut settling and just make your payments! you'll do fine and you won't get into any trouble.

Yew hew.....JEDI...are you out there?

Ok, I pulled up my profile and right now I am in forebearance until 3/2007. I again have to request yet another year forebearance in 3/2007.

I have NOTHING, NOTHING to pay on climbing interest and my balance is: 49,000.00. It is collecting 3,000+ in interest each year. I CAN NOT DO A THING ABOUT IT. MY JOB IS STEADY AND I CAN NOT RELOCATE. I actually have a very good job for the area I live in.

Anyway, I pulled up the income sensitive plan and OMG...it say my payment would be like 352.00. My gross is around 2500.00 however my net is around 1900.00

THERE IS NO WAY I CAN SEND THAT.

SO, after this last year of forebearance, I will be paying 250.00 monthly by dividing our income tax by 12 months.

As you can see, 250.00 is no where near he amount of 352.00. Are you telling me that if I only send in what I can a month that my loan will not default ever?

Sure, I am going to get behind and have late fee's I am sure,but at this point of time, I don't care about that. I am just going to pay faithfully once I start paying.

And then try to settle when I have a large lump sum to settle with.

So, your also telling me they will not garnish me if I am paying something monthly?

If you are paying something rather than nothing, the chances of garnishment are very slim. Make sure that your creditor knows your plans. Keep everything documented and get the receipts after a payment is done. You should enough proof at your side if the matter reaches the court.

No they will not garnish you if you pay monthly. Since you are not in default, you don't have to think about rehabilitation or income contingent rehabilitation, those options are only for defaulted loans. Pay what you can spare faithfully ever month and you will have nothing to worry about.

Correct me if I'm wrong, but I had noticed in one of your previous posts about 60 days of delinquency is defaulting. I was told that defaulting is anywhere from 90 to 180 days of delinquency. Is this true?

No

correct me if I am wrong, but defaulting is not paying anything at all, and if you are paying something, I will not default. RIGHT?

SO, basically the worst thing is at 49,000.00 if I am not meeting the minimum payment, I will just keep getting late fees and interest added and will never pay it off.

SO, say 15 years from now, will they ever eventually come to get me and lock me up or what?

Thanks Jedi for all your help.

I believe I already answered these questions satisfactorily. If you read this thread once over from the beginning you will have all the info you will need. I also hope you saved all the e-mail correspondence between us, they also contain all the information you requested.

Sorry to have bothered you Jedi.

No, I did not save any of our email correspondence, and actually nothing has been spelled out for me yet as I am still looking for a straight forward answer. Mainly because I keep receiving answers with lots of open end questions.

I guess what I am looking for is an answer clearly spelled out for me such as:

IF YOU PAY SOMETHING YOU ARE NOT AND WILL NOT GO IN DEFAULT.

I can re-read this thread all day and still have my questions...I guess I just am not very smart when it comes to this and thank you for pointing that out to me.

You didn't bother be Linda, I just didn't understand why you were still wondering, please don't take the opening line in my last post as sarcasm, I'm just pretty certain that I covered all bases. In a nutshell, as long as you pay faithfully a minimum of $50 monthly you will never encounter the word "default" and nobody in this country goes to jail over a debt.

IF YOU PAY SOMETHING YOU ARE NOT AND WILL NOT GO IN DEFAULT

is absolutely correct.

Thank you Jedi.

I have a couple more questions for you and then I will print off this thread, so I remember.

On 49,000.00 just paying 50.00 minimum because I am not sure yet that it won't be hard for me to even come up with 50.00. What is the worst thing that could happen to me after paying say 50.00 monthly for 5 years? They won't try to garnish me or take my taxes for sending in 50.00 faithfully monthly?

Also somewhere online I read where if you pay 50.00 monthly for 15 years, that they write off the rest? Is this information true?

So, not making the minimum payment they request monthly and sending only what I can (at least 50.00) will they keep my loan or send it to collectors?

And last but not least....Is education loans more lenient to us, because of it being an education loan? or why are they so much more cooperative than credit card companies?

In all honesty, I earn 24,000.00 yearly and have a house hold of four. This is our income. I am struggling to make ends meet now and 49,000.00 dangling over my head is nerve wrecking.

Not to mention the 20,000.00 credit card debt and my 60,000.00 mortgage on home.

My goodness Linda you really are in a pickle. I hate to say it, but you may need a second job for yourself, and to give your husband an ultimatum. You mentioned that he works sporadically, well that is no good. Even if he has to work at Home frickin Depot so be it because he has to bring something to the table if you guys are to survive financially. How come he only works sporadically? I don't recall you mentioning why...

BTW, I'm not bashing, I just think you are severely overwhelmed.

Well, I won't go into my personal life here...but basically I am in 49,000.00 debt with student loans. I am going to pay them what I can monthly even if it is 50.00 a month.

the 20,000.00 in credit cards are not upsetting me as of yet, because I am in a great debt settlement program that is doing wonders for me. Soon those will be settled and gone.

The 60,000.00 mortgage is not a problem either, it is set on 33 years and I have never been late on a payment.

So, basically I am just worried about having my check garnished on my student loans for not being able to pay the minimum payment they request which is 372.00 on income sensitive repayment plan.

I work 50 hours a week, with two small children, a second job is just not an option for me.

If a second job is not an option, how about a first and second job for your husband? Just him such a kick in the ass, it really annoys me that you bring home the bacon, have all this debt, and he does squat.

$24,000 at 50 hours a week? Technically speaking that's $9-10 dollars an hour! That's pretty grim. As much as you love your job, it's not enough. I too wanted to be a counselor or psychologist, and if I remained single I may very well have been one. But I chose to marry, and had to give up that dream to realize another. When what you do in life effects others in your life, such as spouses and children, you have to give up dreams that suit singles. I traded in my liberal arts studies for business admin/marketing studies because I want an income comparable to my husband's should one of us lose a job. I'm getting there, have an interview for a marketing manager position on Monday. What I'm trying to say is, even though you love what you do it brings too little to the table. I strongly recommend going in a different direction if it means a different career that brings in more income, or a different city where there is more money, or giving you husband a good hard push. I hate to say this, but if you refuse to even consider these three options, then you are stuck in this rut for life.

Jedi,

I love my life, or "rut" as you call it. Like I said in my previous post, my debt settlement program is going really good. I have not completed the program yet, but so far----so good.

The student loans were taken out before I married. I was out of college when I got married. My husband does not have to worry about them, he had no part of them. He should not have to worry about them, his name is not on them and he married me, not my loans.

My only is options is to: A-pay something or B-pay nothing on my student loans. You are the one that told me that if I pay something, I will not default and they would not garnish my wages. Now, you keep telling me I am in a "rut". Are you saying now that they will garnish if I am paying something? or what? I am getting mixed messages here.

The rest of my "rut" life as you call it is perfect. I am very content and so what that I will owe 49,000+ forever, as long as it don't go into default.

I have also heard that if they do garnish your wages, it is only 14% net and that is: 250.00 and that they can not take your taxes if they are garnishing. I don't know if that is true or not. Then I heard that after 15 years, they write the rest off and discharge it. I am of course insolvent at time, so I won't have to pay taxes on 49,000.00

Anyway, these are my only options.

thanks

If you're so happy and life is so perfect then why are you always begging me for help!?

The rut I was referring to is you settling for being poor and in debt with a jobless spouse for the rest of your life. If that is what you truly want why are you inviting me into it in your quest for advice? That to me sounds like complaining about a problem, and when that is what I am confronted with then yes I am going to give my honest opinions and they won't always be pretty!

FYI, and this is very important sice you are so worried about garnishment, is is 15% gross pay and taxes are still the same, if your default you will leave that much less for your family. Maybe your husband has nothing to do with your loans, but he has a great deal to do with your household and all the expenses, him working steadily and bringing home income will free up your paycheck considerably for repaying your debts.

One more thing, there is no statue of limitation of government owed debt, this will follow you until you kick the bucket. You will be paying on this with your pension and social security which will be even less than what you make now. How "perfect" for you.

I don't know of any other way to put this but....

did you or did you not tell me that as long as I am paying something, I will not go into default? If I am not in default, then I have nothing to worry about. As long as I am paying something, it will not default.

I hardly see this question as begging to you! I called upon you because I seemed to have thought you were one of the smartest people when it comes to student loans.

You keep referring to my husband as being jobless. Yes at times he was, but he has not been jobless in over two years. There is no need for name calling.

Do you have a link proving they take 15% gross income, because I have a link saying they can only take up to 15% of your disposable income, not gross.

Anyway, again sorry for bothering you and I will not ask anymore questions regarding this matter.

Quote:

Ok, I did not mean to come across as sour or sarcastic to you. I use caps to try to express my feelings at that moment, and I know others take it in another meaning. I am sorry.

I truely believe I have just took your message wrong somewhere. Let me try this again, one last time. I guess I got confused when I read in my thread, "You told me that if I paid anything at all and on a regular basis that I would not go into default as long as I told the creditor what was going on."

then, on another post you responded to someone else something entirely different. That is what prompted my interest in the whole ordeal again from the last time we spoke.

If you are telling me that they will not garnish my wages if I am paying what I can monthly (even though it may not be what their minimum requirement is), then that is the answer I was needing to know, and this is not the end of the world. I just did not know how they could garnish me if I am sending in 50.00-200.00 monthly.

Thank you for all your time in resonding to me regarding this matter.

Sincerely...

One other thing I am sorry about.... my computer is really slow! I am on dial up and it takes forever for this forum to pull up anything, I am talking minutes here. I did not want to take hours to find our previous thread to reread it. It takes 15 minutes for the page to come up to post on and then to post it and then to pull up something to read again.

this is not your fault, but I took the easy route by just starting another thread. This morning, I decided I was going to find our previous thread and I finally found it.

You told me it took 60-90 days of non payment before going into default and that the Education Depart. hardly ever sued or went to litigation unless it was a 6 figure and I had lots of assets or resources available to me, which I don't have nothing.

The Dept. of Education approved my consolidaion a year ago, and then ACS bought it from them. Does he above situation still apply?

Water under the bridge!

The facts you just stated are all true. Student loans have all the same terms applicable no matter who holds the account.

GROUP HUG!!!!

Thanks Jedi....again I am so sorry for all the confusion on my part.

Now, I kept this thread and I won't ask anymore on the topic unless I get a garnishment letter in the mail and I will be hunting you downf to see if all is legal. *
My "t" key sticks on my home computer and that is why my previous post sounded funny, there is nothing I can do about the sticking "t".

Quote:

I agree!

Linda, you won't get a garnishment letter if you stay current.

If something happens to your family and you are unable to stay current, just keep all your receipts and household bills in a file for that rainy day in the event a garnishment letter comes. If you can prove hardship, garnishment won't happen.

Stay current and good luck!

I hate to say it but I am seeing a lot of incorrect informtion posted in the thread.

It takes 270 days to default on a student loan.

What is default?

For a Federal Perkins Loan, default occurs if you don????????t make an installment payment when due or don????????t comply with the promissory note????????s other terms. Default for a FFEL or Direct Loan occurs if you become 270 days delinquent (if you????????re making monthly payments) or 330 days delinquent if you pay less often than monthly.

If your required payment is XX amount and you pay less than the required amount, you will be deemed deliquent. Making a min payment will NOT prevent default.

ICR repayment. You do not haveto be in default to get this payment option if your loan is consolidated with direct loans. ICR is REQUIRED if you are consoldiating a default, however anyone can opt for an ICR plan.

AWG Garnishment ...is 15% of disposable wages NOT gross wages. It has never been calculated on gross.
https://www.myeddebt.com/borrower/

I collected defaulted student loans for six months and the information I provided is the information I obtained through my job training and my school when it came to my own loans.

I collected defaulted loans for almost a decade and then went on to become a financial aid officer for the next 5 years. All thru the 9i0's is took 180 days to default....late 90's it changed to 270 days. Somebody gave you a lot of bad information!

Well, then I suppose it won't be all so bad should I ever (knock wood) default! Not that I ever would! Good to have you around, by the way!

...and you wonder why I got so easily confused. :lol: A quick update, We have been discharged of our cc's as of 12/5/07. That leaves us about 300.00 spare dollars to work with per month, to live off of: We are talking about two minor children, so this "spare" money will go quickly as there are Dr. copays, vehicle repairs, medication copays, home repairs, COLA's and etc.

I plan on making a payment of some sort in March towards my student loans, I know the minimum will be 380.00 and I know that I will only have 300.00 to send in and that is our income tax divided by 12 months! So, I am going to apparently default for sending in less than minimum payment expected.

Should I get a garnishment letter in mail, are you telling me that I can appeal this with verification that my family would be placed in due hardship and get garnishment stopped?

Also, I read in a previous post (not sure which one it was, but I believe Soaplady was involved) that after 25 years of paying, the loan is forgiven on the remaing balance. This is indeed correct information? Who do you verify this information with say in 25 years???

Thanks in advance and MERRY C H R I S T M A S.

I plan on making a payment of some sort in March towards my student loans, I know the minimum will be 380.00 and I know that I will only have 300.00 to send in and that is our income tax divided by 12 months! So, I am going to apparently default for sending in less than minimum payment expected.

Have you talked to your lender about income sensitive payments? Unfortunately it sounds like you had your loans with the DOE or DL program....they have the Income Contingent payment plan that would have been ideal for you. However since you reconsolidated with ACS, you no longer have that option. They do offer income sensitive though.

Should I get a garnishment letter in mail, are you telling me that I can appeal this with verification that my family would be placed in due hardship and get garnishment stopped?

Possibly. But then again they will look at assets and your husbands income as well in determining hardship.

Also, I read in a previous post (not sure which one it was, but I believe Soaplady was involved) that after 25 years of paying, the loan is forgiven on the remaing balance. This is indeed correct information? Who do you verify this information with say in 25 years???

Again this is a Direct Loan or DOE benefit.

My attorney told me that if ACS is
asking for 380.00 and I am only
sending them 300.00...he seriously
doubts they will garnish my wages or
take my refund check. He said they
will be happy to just to be receiving
payment on the outstanding loan.
He told me that very rarely does he
see wages garnished for student loans,
but they could take my income tax. He
told me to change the way I file so
that they don't get very much of my
income tax return (should they take
it.) I mentioned to him that if they
take my refund, there goes their 300
a month and he said again that he
rarely sees them intercept and garnish
wages and they would rather intercept
tax refunds. He told me that I may
default and they will give me crap
over it, but he is pretty sure they
will accept it without further action.

This was my attorneys advice...

Oh, and other than the fact that I
will be paying on this until I die!!

Yes, I have spoke with ACS. Their
sensitive plan is 2.00 less than the
minimum payment. I told them
already that I would not be able to
make their full payment and i wanted
to know what they would do to me for
not meeting that. They did not tell
me anything other than the fact that
they would not garnish my wages. She
kept saying they were there to help
me!!! We will see how long they will
be there to help me.

What ACS failed to tell or explain to you is that they NEVER garnish...they are a lender/servicer and that is NOT their job. When you make less than the required payment, you will be past due. After 9 months of past due, ACS will default you back to your guarantor. Your guarantor will pay ACS off in full. At that point your loan becomes due in full per the default clause in your contract. You will be placed into collections and up to 25% in collection fees be added to your account. This is the point that tax offsets and wage garnishments occur.

Your attorney has his head in a hole or is pulling information out of thin air. Administative wage garnishment is HUGE. He has given you horrible advise based on his experience or opinion which it totally not fact. Wonder if he ever had a student loan...

Thanks Soaplady, but just spoke with ACS rep. They were really nice again. They insisted that collections would work out a decent payment arrangement with me and will accept the 300.00 monthly payment, but that I will have to continue at that agreement until paid in full. Yes, they want their money, but they can't place you in undue hardship either. Government Loans do take into consideration undue hardship more than any other loan on the market. So, things are looking great.

Hello,

My student loan debt is much larger. I know I need to consolidate, what's the easiest way and the best company to consolidate with. I tried the US Dept. of Ed and did not get a response and just set it on the back burner. --But I really need to address this.