Student Loan Relief

Having Student Loan Troubles?

Just what Could Happen if you Default on your Student Loan?

Students_Caps_Gowns_008Umm. You might want to sit down for this… 

If you fall 9 months back on your student loan without making any payment arrangements, your lender will put your loan in default status.

Don’t let this happen if you can help it. Although it may seem a lower priority payment than the roof over your head, the transport you have to work, or food for you and your family, don’t treat it like credit card debt. When you default on a student loan, some troubling things get set into motion which can make your life very uncomfortable. If you are headed in this direction, speak with a counselor.

If you Default on your Student Loan…..

1) The Loan Accelerates. This means that the entire balance of the loan becomes due. You cannot just add up the amount you fell behind and ask that wealthy relative to send them a check. They’ll send it back and say “thanks but No thanks”. They can only accept the arrears if they are attached to a new pay plan which is accepted by the lender.

 2) Lasting Credit Damage. Defaulting on a student loan will show up as a negative entry on your credit report and reduce your score. The effect will sting for many years as the default remains on the report even if you emerge from default later. In today’s economy lender’s are requiring higher scores to approve loans for mortgages. Don’t be denied your dream home years from now because you let your student loan default.

3) Walloping fees and costs. The fine print of student loans can contain some harsh penalties for default. Your total balance could soar overnight to 20% over the original amount! One day you could owe the original $50,000, and the next day you owe $62,500! When they send your loan file to a collection agency, the cost to collect the debt is passed onto your balance. Sounds pretty scary. We agree.

 Student Loan Relief Help Line (888) 856-2668

 4) Aggressive Collection Action. The collection industry bids each year for contracts with the Department of Education and other lenders of student loans. They’ll aggressively pursue you by phone and mail. They might start calling you at work, since they can do that until you ask them not to.Students_Caps_Gowns_009

 5) Loss Your Professional License or Credential.  Many professions require a license to practice. Found in medical, legal, therapists or other credentials where the public places trust in an individual. Depending on your occupation and area of expertise, if you default on a student loan you could be stripped of that license to perform your work.

 6) A Shocking Trim Of Your Take Home Pay. Imagine looking at your paycheck, and finding that your net pay was only 75% of what you normally see on the bottom line. A defaulted student loan can result in a garnishment of your wages of up to 15% of your disposable income. But if you have more than one loan guaranteed by the federal government, it could go up to 25%. Although you would be notified 30 days before garnishment, you would not know if you shoved those mailed notices in a drawer.

If you are having troubles making your student loan payments, you should speak with an expert. Many new programs are available to consolidate your loan, reduce payments, pull it out of default, or in some cases forgive the student loan. Have a conversation with a counselor.

Student Loan Relief Help Line  (888) 856-2668

Is Bankruptcy a way out?

Probably not. It is very rare that student loan debt can be discharged in a bankruptcy. Although it is not considered a secured debt since there is no collateral, it remains not dischargeable much like child support obligations and income taxes. In the rare cases where it can be argued for discharge, the judge must be convinced that the debt places an undue hardship on your ability to lead an otherwise normal life. These rare cases can include a permanent disability preventing you from entering the workforce with no foreseeable prospects for future earnings. To speak with a bankruptcy attorney about whether you might qualify for a discharge of your defaulted student loan, click here for free bankruptcy advice.

Speak with an expert now. New programs can reduce your payment. 

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Student Loan Relief Help Line  (888) 856-2668

Additional phone numbers for The Student Loan Relief Help Line include: 800-379-0954, 888-563-6260, 888-694-8235, 888-699-5772, 888-756-1671, 866-836-9168, 888-661-8973.

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