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Valued Member
spooky
Posts: 62
Registered: ‎08-26-2008

Re: whats worse ? foreclosure or defaulting on student loans???

Also, I thought that recovery is not as bad with a foreclosure( I know it is still costly). but at least someday you can get back on your feet, where as a st loan, Its never if you default, they will hound you to your grave !, I am okay with moving, I am sure I could find a lpace cheaper before our credit tanks, before we go completly in the hole. I know there will still be cost related to the loss of our  home, but I dont feel like I want to buy again for quite a while any ways. I am trying to get a better job, my husband has a great job, but now the auto co's are in trouble, I feel like just taking  the road of least resistance, but I dont want to shoot myself in the foot either if i can help it, thats why I come here, for answers. TY again Spooky
Valued Member
spooky
Posts: 62
Registered: ‎08-26-2008

Re: whats worse ? foreclosure or defaulting on student loans???

Thats 3 hrs round trip to work, sorry. 500 mi aweek to work. we could definatly live in a smaller place, no kids, goodcredit 650-675-668
Moderator Emeritus
Timothy
Posts: 9,252
Registered: ‎03-19-2007

Re: whats worse ? foreclosure or defaulting on student loans???

SL's private or Federal do NOT have an SOL-
 
Do the math-
Weight each possible decision-
Are you upside down on the mortgage?
Will renting reduce your monthly costs?
 
If you default on the mortgage- are you willing to NOT be a home owner for 2  th 3 years or longer?
What would happen if the  SL's pulled 25% of your check in garnishment    ?
 
Do what is best for you!!!
 
There are very few PRO's to your situation unless  - you do what lot's of jinglle mailers are doing- living in the house for 6 months (rent free) prior to a major derog- FC.
 
Make a plan- do the math, you can't undo yor decition/
Frequent Contributor
thotgal320
Posts: 295
Registered: ‎08-14-2007

Re: whats worse ? foreclosure or defaulting on student loans???

My sister had student loans with sallie mae and she defaulted her loans and because of that the govenment kept her tax return every year til they were paid off.  I currently have loans as well and I pay every month.  It's a tough situation I hope everything works out well for you.
Valued Member
spooky
Posts: 62
Registered: ‎08-26-2008

Re: whats worse ? foreclosure or defaulting on student loans???

Were those private loans ? SM only gives out private loans, so how does the govt get involved in taking your tax returns. ?  Do you have to be in complete default? We've co-signed so that would hurt my daughter as well scince they are hers primarily???? so curious!
Frequent Contributor
thotgal320
Posts: 295
Registered: ‎08-14-2007

Re: whats worse ? foreclosure or defaulting on student loans???

I believe so not 100% sure though.  I know she attended a university and applied for financial aid and Sallie Mae were the ones that helped her.  Couple years after graduating she ran into rough times and didn't pay her loans.  They went into default and when she filed her return she got a letter a few weeks later stating she wasn't getting it due to student loans ( Sallie Mae).  This was about 6 years ago they kept her return things may be diiferent now not sure.
Regular Contributor
nfg
Posts: 248
Registered: ‎10-06-2007

Re: whats worse ? foreclosure or defaulting on student loans???

[ Edited ]
What a hard decision!!!  I can tell you that the government ended up garnishing my wages at about $400 a month for a 7K loan.  I would look at the option of possibly renting out the house or getting a roomate.   How about a loan modification on your mortgage?  (not a re-fi) 


Message Edited by nfg on 09-22-2008 02:12 PM
Member
californiajeff
Posts: 12
Registered: ‎09-23-2008

Re: whats worse ? foreclosure or defaulting on student loans???

Here's what you need to do:
 
Call up your Student Loans and ask for a 1 year deferement based on your current economic hardship. I have done this before. The other alternative is to go back to school. Payments can deferred indefintely while you are in school.
 
As for the house and mortgage, get some roommates.
 
Hopefully, with the above two you will have enough extra money now to cover all your bills.
Valued Member
spooky
Posts: 62
Registered: ‎08-26-2008

Re: whats worse ? foreclosure or defaulting on student loans???

Thanks for your ideas, will they defer after using up all possible deferrments? They told me that we have used all except 6 more months of partial deferments, where we pay interest only payments. Will going back to school nuke that policy ? I am trying to encourage my daughter to go back, she is all for it except that she is afraid of it piling up even more, at some point they have to be dealt with, I think were going tp put the house up or sale in the early spring,(living here in MI-that could be next to impossible) but we'll try that anyways. TY spooky 
Established Contributor
rmily
Posts: 670
Registered: ‎07-12-2008

Re: whats worse ? foreclosure or defaulting on student loans???

[ Edited ]
Eep? It seems like the first round of school didn't really produce a career that could pay for the resulting loans. If your daughter opts for another round, please please please do a lot of research and make sure the average starting salary will support the (big!) loan payments and that there is a decent level of demand for that position in your area/or she is open to moving where the positions are. Maybe do some cost comparisons of the schools so the debt doesn't grow so much.

Any chance the partial deferment could hold y'all till the house sells?

Message Edited by rmily on 09-23-2008 09:11 PM

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