Re: How many times does defaulted student loan appear on credit report
01-31-2013 11:07 PM
It may not be reported now, but federal loans are not subject to a statute of limitations, so it may well re-appear somewhere down the line. I don't know if you are eligible for any refundable tax credits, but they can also seize your returns without a judgment.
These loans will not go away, and the collection efforts will probably not stop unless you either go through the process of discharging them in bankruptcy or contact the collection agency and work to rehab or consolidate the loans and get them out of default and eventually paid off.
Even with your limited income, unless you plan to pursue discharging the loans through bankruptcy, I would consider attempting to work out a rehab plan, and then enrolling in the income-based repayment plan, which would probably zero or very close to it in your situation. With the loans on IBR, you would have a positive payment mark each month, and after 25 years, the remainder of your balance will be forgiven. It's a positive for your credit, it makes good on your debt, and it prevents any unexpected surprises with negative marks showing up on your credit report, or tax returns being seized.