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Valued Contributor
athensguy
Posts: 1,291
Registered: ‎02-26-2008
0

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

There are some programs that will help forgive some student loans, if you, for instance, opt to teach in an underserved area for a year or two. Maybe she should look around to see if she can qualify for any loan forgiveness.
Frequent Contributor
niecey89
Posts: 401
Registered: ‎05-01-2007
0

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



athensguy wrote:
There are some programs that will help forgive some student loans, if you, for instance, opt to teach in an underserved area for a year or two. Maybe she should look around to see if she can qualify for any loan forgiveness.





There is a post in one of the forums about a Teacher forgiveness program.
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Regular Contributor
rhinocl
Posts: 112
Registered: ‎05-16-2007
0

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

I am not advocating the foreclosure option but if it is a primary residence there will often not be a deficiency judgement. If you are considering taking this option check carefully as there are both state and federal laws involved. Your options on the house from good to bad (re credit score):
forbearance from lender
lender recasting the loan with payments moved to back end and/or lower interest
short sale
deed in lieu
bankruptcy (will usually only delay foreclosure)
foreclosure
bankruptcy and foreclosure
New Visitor
rodrain2
Posts: 1
Registered: ‎09-30-2008
0

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

I am sorry, but this is a no brainer. Pay the mortgage. Unless the student loan is co-signed and you do not want to sour the relationship of the person that co-signed.
New Visitor
dogrunner
Posts: 3
Registered: ‎08-24-2007
0

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

I have student loan debt and have been out of work a few times.  I would call up Direct Loans and see if you can still refinance your debt with the Federal Government. I have done it a few times to get the loans first out of the private organization and then to get a lower interest rate.  It was a simple process of just refilling out a promissory note.  Assuming you can still do this, the Federal Government is very flexible on payments and being out of work.  You can get a forbearance for financial hardship for a significant period of time.  Also, they have some very low payment plans that you can switch to when the forbearance period runs out, so that you can meet your obligations but be okay while you are doing it.
 
I don't know about private organizations, but if you can't refinance, you might see what kind of deal they can work out with you.  I refinanced initially a private loan when I was out of work and wasn't getting much help from the private organization, and I have been thankful on multiple occasions that I did so.
 
My point is that you may be able to avoid default by just working the system.  Then, you can focus on saving your house or perhaps getting it sold, so you can downgrade your living situation.
 
 
Established Member
ficoachiever
Posts: 57
Registered: ‎07-05-2007
0

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

You may want to submit the student loan part of the question in the student loan forum (about options you have).  They have a person named LYNN something that is VERY good about options and what happens with student loans.  I think it will be very helpful.
New Member
raven13
Posts: 3
Registered: ‎04-03-2008
0

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

I feel for you. I am in a pickle similar to you. I am going to give you my opinion which differers with the one that advised keeping mortgage.
I know someone that defaulted on a SL and this has presented problems for years. Not just 7 years like a BK or somthing but it has been years and years and years, well over 20. He got electrocuted and fell 28 ft on concrete on his head and got 8 skull fractures. They then forced him to go to school within two weeks of leaving the hosptial or lose his comp, which he woudl lose his vehicle and ruin his credit if he never went. So he tried but he was still on strong meds such as percodan and more and school was something he wasn ot ready for and the teacher told him so. So...he quit and could not pay back the loan, lost his vehicle and ruined his credit. That has hurt him from that day to this. He can't get a decent job because of the SL, he can't get back in school due to that SL loan, his credit is screwed up forever due to that SL loan. So....I woudl think foreclosure would be best. At least in 7 years you would get a clean start with your credit. SL failures never leave your credit and according to the attorney we talked to, you cannot file bk on them either. The attorney said you cannot file BK on any IRS paymetns due or government loans due. So...the man I told you about is ruined for life with the student loan deal.
Good luck, I truly hope you find some way to keep both paid.  
Raven13  
 
New Visitor
luven637
Posts: 1
Registered: ‎09-30-2008
0

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

My husband defulted on a sm student loan he was recalled to the military in california in 2003 while he was in college in Texas we have been in california since then and were under the impression that since he was recalled to active duty everything would freeze when it came to school...  Well that was not true sm sent him to collections and everything but that was about it they had not even talked to us before they sent him to collections they were sending the mail to an old address in texas and we had never knew until we went to get a house and pulled up his credit.... Then in 2005 we had found out that insurance paid sm and the loan had been turned over to someone so we had to pay this collection company every month on time for 10 months and then they turned the loan over to nelnet or something like that and once it was turned over to them they defered it until he gets out of the millitary because he is still on recall orders.... So what I'm saying is keep the house or just make smaller payments on the SL at least your paying something every month...
Visitor
pdhoang
Posts: 2
Registered: ‎10-13-2007
0

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

No one has made mention of what happens to the person who co-signs the loan. My mother co-signed my private educational loans and my understanding is that she is fully responsible for them if I don't pay. She co-signed my sister's as well and when she went under half-time for 2 semesters, the company tried to collect payments. When my sister couldn't pay, they started knocking on my mother's door. When we look at our credit reports, the loans shows up on both ours and our mother's. In this case I could never let my mother take a beating for me; she was gracious enough to help me when I asked for it . . . I would have to let go of the house. And a relationship with anyone else would surely sour, especially if someone else has worked hard to enhance their credit, only to have it smashed by this. Of course I can't truly speak from the heart because I don't have a mortgage right now, but my sister recently tried to short-sale her house because their mortgage payments were over $1500 a month and they moved to an apt complex renting for $800 a month now. I hope your decision becomes easier as each day passes and I wish you the best.
Senior Contributor
Wonderin
Posts: 3,494
Registered: ‎05-25-2008
0

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

Why in the world weren't you guys protected under the Servicemembers Civil Relief Act (SCRA)??!!!!!????

o_O

Am I missing something???

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