Hey all!
I've been stalking this board for a few weeks now as I finally decided that, with new husband (who is woefully unemployed) and new baby on the way, it was time to stop hiding from my credit issues and face the problems head on.
... and the largest of these is my student loan, which has defaulted.
I had my MD state tax seized, and I am sure my federal is to follow as I now owe, due to the 7% consolidation interest on my loans, 61K.
I called the CA, Acct Control Technology, and was told that the minimum payment they could give me was $432 for rehabbing purposes. An amount that I can't afford. They also told me that they were about to begin the garnishment of my wages (which was interesting since they didn't know where I worked...)
I want to get on the road to paying this massive debt off, but I simply cannot afford to pay that much - at least not now. My car will be paid off in Sept and then, I can pay that amount, no worries.
She even told me to borrow the money to begin rehab. (Oh, the irony.)
I'm willing to take ANY suggestions. The stress of all of this is killing me.
Drowning in My Defaulted Debt
Started by
Petratishkovna
, Apr 24 2012 12:09 PM
3 replies to this topic
#1
Posted 24 April 2012 - 12:09 PM
#2
Posted 24 April 2012 - 11:35 PM
What kind of loans where they originally? Like Federal, State, Private?
With all my personal credit journey as of late, I started helping out a friend of mine who had several defaulted student loans. In his case they where various types of federal loans, no state or private. He just got the confirmation letter for a Department of Education Direct Loan Consolidation, the the consolidation is due to get paid any day now. From my understanding several different types of federal loans are eligible for the DoE Consolidation regardless of if they are current or defaulted. All he had to do was apply for the DoE consolidation, provide all the info on his loans, provide income info so he could do income based repayment and few weeks later he got the confirmation letter and that they would be paid X days from the date of the later. (I'm not sure exactly what the credit reporting looks like as I have not personally seen it, but I assume the old defaulted loans change to paid off and the new loan is just a new trade line on your credit report. I don't think that new line can show up as defaulted since its new and your making on time payments hopefully)
So if it looks like all your defaulted loans or even a large chunk of them are federal this might be a good plan for you. They do offer income contingent and income based repayment, these are based on your income which you have to provide tax records, pay stubs, family size, basically anything necessary to document your income. You have the opportunity when you are filling out the application (On-Line Only, I think) to enter everything and they show you all the different repayment options, what your monthly payment will be, how long it will take to pay off your loans, how much interest you will pay over the life of the loan, etc. You get to see this before you submit the application for processing. This might be important because it sounds like your budget might be pretty tight at the moment with the circumstances you mentioned, so even with an income based option the payment might be over what you can afford right this minute. Since you only get one shot at consolidation (unless you go back to school and get more loans), you might want to wait until your sure you can handle the payment.
As far as state and private loans, I don't know of any similar programs/solutions outside of the standard make an agreement and pay that on-time for X number of months and then they take it out of default. I'm honestly not even sure if more local or private loans even are required to offer such things. I've just never dealt with them.
With all my personal credit journey as of late, I started helping out a friend of mine who had several defaulted student loans. In his case they where various types of federal loans, no state or private. He just got the confirmation letter for a Department of Education Direct Loan Consolidation, the the consolidation is due to get paid any day now. From my understanding several different types of federal loans are eligible for the DoE Consolidation regardless of if they are current or defaulted. All he had to do was apply for the DoE consolidation, provide all the info on his loans, provide income info so he could do income based repayment and few weeks later he got the confirmation letter and that they would be paid X days from the date of the later. (I'm not sure exactly what the credit reporting looks like as I have not personally seen it, but I assume the old defaulted loans change to paid off and the new loan is just a new trade line on your credit report. I don't think that new line can show up as defaulted since its new and your making on time payments hopefully)
So if it looks like all your defaulted loans or even a large chunk of them are federal this might be a good plan for you. They do offer income contingent and income based repayment, these are based on your income which you have to provide tax records, pay stubs, family size, basically anything necessary to document your income. You have the opportunity when you are filling out the application (On-Line Only, I think) to enter everything and they show you all the different repayment options, what your monthly payment will be, how long it will take to pay off your loans, how much interest you will pay over the life of the loan, etc. You get to see this before you submit the application for processing. This might be important because it sounds like your budget might be pretty tight at the moment with the circumstances you mentioned, so even with an income based option the payment might be over what you can afford right this minute. Since you only get one shot at consolidation (unless you go back to school and get more loans), you might want to wait until your sure you can handle the payment.
As far as state and private loans, I don't know of any similar programs/solutions outside of the standard make an agreement and pay that on-time for X number of months and then they take it out of default. I'm honestly not even sure if more local or private loans even are required to offer such things. I've just never dealt with them.
#3
Posted 08 May 2012 - 01:16 PM
What kind of loans where they originally? Like Federal, State, Private?
With all my personal credit journey as of late, I started helping out a friend of mine who had several defaulted student loans. In his case they where various types of federal loans, no state or private. He just got the confirmation letter for a Department of Education Direct Loan Consolidation, the the consolidation is due to get paid any day now. From my understanding several different types of federal loans are eligible for the DoE Consolidation regardless of if they are current or defaulted. All he had to do was apply for the DoE consolidation, provide all the info on his loans, provide income info so he could do income based repayment and few weeks later he got the confirmation letter and that they would be paid X days from the date of the later. (I'm not sure exactly what the credit reporting looks like as I have not personally seen it, but I assume the old defaulted loans change to paid off and the new loan is just a new trade line on your credit report. I don't think that new line can show up as defaulted since its new and your making on time payments hopefully)
So if it looks like all your defaulted loans or even a large chunk of them are federal this might be a good plan for you. They do offer income contingent and income based repayment, these are based on your income which you have to provide tax records, pay stubs, family size, basically anything necessary to document your income. You have the opportunity when you are filling out the application (On-Line Only, I think) to enter everything and they show you all the different repayment options, what your monthly payment will be, how long it will take to pay off your loans, how much interest you will pay over the life of the loan, etc. You get to see this before you submit the application for processing. This might be important because it sounds like your budget might be pretty tight at the moment with the circumstances you mentioned, so even with an income based option the payment might be over what you can afford right this minute. Since you only get one shot at consolidation (unless you go back to school and get more loans), you might want to wait until your sure you can handle the payment.
As far as state and private loans, I don't know of any similar programs/solutions outside of the standard make an agreement and pay that on-time for X number of months and then they take it out of default. I'm honestly not even sure if more local or private loans even are required to offer such things. I've just never dealt with them.
Thanks for the information.
ALL of mine are Federal. No state and no private.
I decided to do the rehab but I'm worried about the whole thing. I read somewhere that I need to send the documentation back certified mail so I can be assured they've received it and made certain I'm in the Rehabbing program.
Because my loans are FFELP loans, I think I'm stuck paying all the interest and collection fees as well.... *sigh* I can't believe I've done this to myself.
#4
Posted 09 May 2012 - 07:21 PM
Don't kid yourself about "they don't know where I work". It's not that hard if you are a salaried employee in the US.
That said, follow the suggestion to contact Direct Lending to see if they will work with you to resolve your default. The Dept is in one hot mess right now and they're doing everything they can to keep SL's from becoming the next economic crisis. Your payments should be manageable based on what you're posting.
That said, follow the suggestion to contact Direct Lending to see if they will work with you to resolve your default. The Dept is in one hot mess right now and they're doing everything they can to keep SL's from becoming the next economic crisis. Your payments should be manageable based on what you're posting.
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