Comments | poor_skills: student loans in collections

anon618217 in poor_skills

student loans in collections

Nov 25, 2006 22:02

I have a question on behalf of my boyfriend. He has about $13,000 worth of student loans that have been sent to collections because he wasn't able to make payments. He has filed for bankruptcy but it did not cover his school loans. Every so often he gets a letter from collections saying that if he does not make payments his wages will be garnished ( Read more... )

bankruptcy, student loans

Comments 49

chaeri November 25 2006, 22:05:13 UTC

i'd say look into a loan consolidation agency but be VERY VERY careful. and - since his credit is screwed anyhow - get a credit card and pay the loans with that. then pay off the card as he can afford it.

lookbehindyou November 25 2006, 22:07:51 UTC

Just start sending them payments [as much as you can afford and as often as you can]. Make sure to keep records of all the payments you make to them [or rather, he does]. They cannot garnish your wages if you are actively paying on the bill.

Of course, I know that's how it is in my state [Illinois]. I don't know about others.

anon618217 November 25 2006, 22:11:33 UTC

I guess I should have noted where I live - in Illinois as well.

lookbehindyou November 25 2006, 22:13:39 UTC

LOL. Yeah, just send them what you can when you can. Even if it's $5. But you have to send a payment at least every month. They can't do anything about it then.

a_bad_analogy November 25 2006, 22:46:24 UTC

If you're worried about the banking info, I would suggest money orders - keep the stubs and make sure you note how much you paid.

Thread 5

missakins November 25 2006, 22:09:46 UTC

My student loans are currently in default, and payments are being garnished from my wages. They can only take a certain percentage of his pre-tax earnings. For me it ends up being 10% I think. It's more than I would be paying anyways, and I never see the money.

It will mess with his credit more if he has the garnishment, though.

Has he ever consolidated his loans? That usually helps bring the payments down.

barefoot_dyke November 25 2006, 23:50:36 UTC

the percentage of garnishments depends on the state ... i think illinois is 10% also. michigan (where i'm at) is 25%, which sucks BIG TIME.

been there, done that (vehicle reposession) .... so thankful it's over.

inever November 25 2006, 22:12:38 UTC

If you are in Canada and wait 7 years they will automatically stop trying to collect.

I would try and speak with a not for profit credit counselling agency if such a thing exists where you live.

missakins November 25 2006, 22:21:54 UTC

In the US, government-guaranteed student loans never go away.

yackyackyack November 25 2006, 22:28:07 UTC

Yep, nothing is so sure as death, taxes and student loans!

That said, don't know how far this has gone...don't understand collections process, as have never been in that situation....however, I'm a bit confused as to why he let them slip so far. I know if you have a student loan and you're in a position where you CAN'T pay, you can apply for a hardship deferment. He probably should have tried working with his loan servicer. Maybe he still should call them and find out what he can do.

roselover58 November 26 2006, 02:15:28 UTC

Most student loans are not due until six months after graduation, so the amount can add up. And everyone so far is right - student loans do not go away with a bankruptcy. Nondischarageable.

If you call them, and tell them that you will pay, without fail, something each month, that should get them off your case. They won't be too terribly happy, as they want the full amount (DO NOT PUT THIS ON A CREDIT CARD), but if they cash the check/money order/etc, they are agreeing to your payment plan. You can't quit though, you have to make that payment each month. Keep track of what you paid. As long as you are paying, your account should stay out of the autodial system (the collectors work through a queue of delinquent accounts each day).

Good luck!

Thread 23

real_bethy November 25 2006, 22:13:12 UTC

I think that before you do anything, you should seek credit counselling. A credit counsellor will advise you on the best approach to take and often can act as a mediator between collection agencies and the debtor. Often, these people will meet with you for free or reduced fees if you are in dire financial straights. Seriously, you will be surprised at how much these people can help you. If you can't find any in the phone book, contact your city's social assistance office ("welfare") and they can refer you to someone.

I am in a very similar situation and I know how painful, scary and disheartening this can be. Good luck to you!!!!

shes_so_lovely_ November 25 2006, 22:59:59 UTC

The only problem with this is the collection agency does not have to accept the payment proposal from the credit counciling service. If they are not offering to pay something that is acceptable to them they can reject it and you're not any better off than you were before.

munchkin1616 November 26 2006, 01:55:53 UTC

and you still have to pay the credit counselor!

real_bethy November 26 2006, 16:30:27 UTC

I live in Canada, so things may be a little different. The United Way (a charitable organization here) covers almost all of the expenses of credit counselling provided that you qualify (i.e. you are on Social Assistance, Unemployment Insurance and fill out a budget of your expenses). I never would have been able to afford any help if this option wasn't open to me.

Thread 5