@Anonymous wrote:Hi all,
I'm 24 years old with student loan debt. I've got $20,000 worth of loans consolidated and another $17,000 of private loans from Sallie Mae that have gone into default as of July 31st. The debt collector has offered me a settlement of $9,600 but at the moment I cannot pay this. I have finally landed my first professional job where I'll be making $48,000 annually. However, I cannot pay the $9,600 at the moment and by the time I can save up that amount working it will be too late. My credit score is so bad from missing all of my payments that obtaining a line of credit to pay off the defaulted loan is next to impossible. I am trying to gather all of my options and have considered filling chapter 13 bankruptcy. If anyone could give me some advice on the situation I would greatly appreciate it.
Thank you,
Kyle
Rehab! Rehab! rehab!
First of all, it's unlikely that bankruptcy will help you with your student loans as they are rarely dischargable.
You reconsolidated your fed loans, but under what plan? Look into the income-based payment plan, as it's the lowest monthly payment option the fed has. Works out to be 15 percent (10 percent if Obama gets his way with it) of your discretionary income. So, if you make 20k, you subtract the poverty level form that 20k (about $11,400 for a single person I believe) and you would be paying 15% of the remaining $8600 per year, or about $100 per month.
Call Sallie Mae, and ask them about options to rehab their loans. I've found that student loan companies are VERY good about working with people to pay their loans. Have you asked them for a forebearance until you get on your feet? TALK TO THEM! Ignoring them does not make the problem go away.
Good luck!
Starting Score 12/2013: 547 EQ; 529 EX; 540 TU
I am currently rehabbing some student loans now, am 29, and just came out of a bankruptcy.
I would recommend that you rehab the loans first. It goes from 9-12 months, depending on the institution. Once the rehab is done, get on the Income-Based or Income Contingent plan.
Unless you have more debt, like credit cards, declaring bankruptcy will only drop your score and postpone the loan payments.
Hope this helps.
@Anonymous wrote:I went into BK13 ($35k in CC debt) with $50k in student loans. Student loans could not be IIB so were put on hold with interest accruing over the 5 years we were in the BK13. Came out of the BK13 and now I'm looking at $75k in student loans. Doh! So, yes... I echo the others here. Rehab those loans then get on an income sensitive payment. You will *not* regret it.
Wow.... $25k?
I had 5 small student loans (total $4500) and my interest accrual was minimal if anything at all for the 4 years of my 13... I pay $58 a month at 2% to Sallie Mae.... Much better than credit rebuilder loans.. LOL
