Hi there. I'm hoping some of you guys (and girls) can help me. In 1996 and 1997 I got student loans in the amount of $18K. For various reasons (health and I wasn't working) I couldn't pay and defaulted. About 3 years ago I got a good job and started to get my head above water and started paying debts back but wasn't getting any notices for my student loan and defaulting etc. About 18 months ago, I got a wage garnishment notice from work. So for the past year and half they have been garnishing apprx $500 a month. I figured it was my fault and I'll just get through the next couple of years and deal with it.
My delema is that 18 months ago the balance was $27K. Over the course of these 18 months they have recieved over $11k but I got a notice that I still owe them $22K. I was so upset. They are charging me so much interest. At this rate I won't get this paid til 2015. I have two questions. If I borrow this money from my parents and offer to pay the loan off in full is there anything I can do to only pay the rest of the principle (so roughly $7K) The collection agency wants $15K to settle but that seems so bad because the principle was only 18K.
If not is there anything I can do to get it out of garnishment and pay the same amount on my own? Any help you all could give me would be greatly appreciated. I'm really trying to fix my credit and take control. Thanks!
Full Version: STUDENT LOAN GARNISHMENT HELP!
QUOTE (Badiis @ Jan 1 2009, 09:26 PM) 
Hi there. I'm hoping some of you guys (and girls) can help me. In 1996 and 1997 I got student loans in the amount of $18K. For various reasons (health and I wasn't working) I couldn't pay and defaulted. About 3 years ago I got a good job and started to get my head above water and started paying debts back but wasn't getting any notices for my student loan and defaulting etc. About 18 months ago, I got a wage garnishment notice from work. So for the past year and half they have been garnishing apprx $500 a month. I figured it was my fault and I'll just get through the next couple of years and deal with it.
My delema is that 18 months ago the balance was $27K. Over the course of these 18 months they have recieved over $11k but I got a notice that I still owe them $22K. I was so upset. They are charging me so much interest. At this rate I won't get this paid til 2015. I have two questions. If I borrow this money from my parents and offer to pay the loan off in full is there anything I can do to only pay the rest of the principle (so roughly $7K) The collection agency wants $15K to settle but that seems so bad because the principle was only 18K.
If not is there anything I can do to get it out of garnishment and pay the same amount on my own? Any help you all could give me would be greatly appreciated. I'm really trying to fix my credit and take control. Thanks!
My delema is that 18 months ago the balance was $27K. Over the course of these 18 months they have recieved over $11k but I got a notice that I still owe them $22K. I was so upset. They are charging me so much interest. At this rate I won't get this paid til 2015. I have two questions. If I borrow this money from my parents and offer to pay the loan off in full is there anything I can do to only pay the rest of the principle (so roughly $7K) The collection agency wants $15K to settle but that seems so bad because the principle was only 18K.
If not is there anything I can do to get it out of garnishment and pay the same amount on my own? Any help you all could give me would be greatly appreciated. I'm really trying to fix my credit and take control. Thanks!
When you default on a student loan, you are chared up to 25% in collection fees which are mandated by the federal government. Your payments on garnishment are being to the collection costs first, then interest and finally principal. So for the initial period of time , nothing is hitting your past due interest or the principal plus new interest is accruing and is being capitalized. Your interest has not changed...it is the same interest that you signed for when you borrowed the loan. By not paying or deferring you have incurred additional costs which you are legally responsible for.
They will not settle for just the principal. the settlement offer the CA is offering is very fair.
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