Hi, If anyone can help me to figure on the best move from this point, I really appreciate it!! My situation: Filed BK in 06/01. I have been default in my student loan for the past 2 years (they have taken my tax return for 2 years in a row). I have been thinking that this should be writeoff when I filed my BK. But, I guess I am wrong. Current situation: This account are in collection and they added 25% on top my loan. How can I go around collection people and start to pay this? Now, I can afford to pay around 200-300/mo. My loan around 12k (ecluding 25% fee). Thank you!!! Sebel
Government guaranteed loans are ususally eligible to be "rehabilitated" Ask your agency about doing this... what will happen is you will apply for the rehab program, they will accept you on the condition that you make 12 on-time monthly payments (the payments will be "income-adjusted" based on your salary, expenses, etc) After you complete the year of on-time payments, your SL account will no longer be considered in default, and it will be in good standing as you have learned, student loans are almost never able to be included in bankruptcy!
When you say agency, who is this agency? I remembered I called someone before from Direct Loan, and they direct me back to the collection agency. And, this collection agency would add 25% to my loan for collection fees, which I am trying to avoid. Yeah, I have a VERY lousy BK lawyer...I guess that what I got for paying pretty cheap (under 1k for the whole process). But, at that moment, If I can afford to pay more than $3000, I would use it to pay my debt instead. Thank you.
Re: Re: Default Student Loan, What To Do? In your case, I'm not sure...Maybe the state agency which originally guaranteed the loan... I had a friend who had the same problem with Student Loans, taking her tax refunds, etc. but they were being serviced by the NY State Higher Ed. Assistance Corp., not a private collection agency. She was able to rehabilitate the loan through them as I described (PS note: these loans were very, very old, they had long been returned to NYSHESC after her default , and after collection agencies could not find her!)
You basically have 2 fairly good options. If you haven't consolidated before, and possibly if you have , you can apply for a William Ford Direct Student Loan. The process takes 6-8 weeks. You can apply online, I will find the link and post if for you. Once you have the loan processed, you are officially out of default, and are even eligible for more Title IV funding from a university(Grants, Loans etc) (Whie you are in default on any federa student loan, you are ineligible for T4 funding.) Your past loans will still retain the "charge off/default" notation on your CR if they are on there. You can possibly goodwill the lenders and see if they will change the notations after you have been in payback for a bit with a good payment record. OR You can go the Loan Rehabilitation route, where you make timely payments for 12 months and they change the notation on your CR to a positive notation (paid as agreed or something, I don't know the actual notation used, but they remove the default status, etc) The first option will get you thisvyears tax return if you WAIT TO FILE your return until after your loans have been paid by Wiliam Ford and you receive a letter from the IRS that your refund is no longer offset by your loans. I will go look for the links and post them in a bit, Good Luck!
here is the link to WF http://www.ed.gov/offices/OSFAP/DirectLoan/index.html Here is some info on rehab of loans: http://www.aessuccess.org/manage/cant_make_payment/default_rehab.shtml I believe you can rehab through William Ford. They are really nice to talk to at William Ford, don't be afraid, but you HAVE TO stay on top of the application process, call weekly and see where they are in your case.
