Life After Default
By Genevieve Dobson
You thought after college you would get a great job and have no problem paying your bills but you forgot one thing: student loan payments. Massive student loan payments. At first you probably made your payments with ease but then you realized you wanted more than just your small one bedroom apartment. You wanted the American Dream of getting married and having a couple of kids. Maybe a nice house one day with a white picket fence. But how were you to do that with all the student loan debt you incurred for a degree that you never used. Sound familiar?
So you started missing payments or making only half of the payment like somehow that would be enough and before you know it you receive delinquency letters at your door. Whats the best way to handle delinquency letters? Pretend like they don’t exist which you did like a pro. Oddly enough the loan debt just didn’t go away. You can’t include student loans in bankruptcy and you cant give the degree back which at this stage you would gladly do seeing you aren’t using it anyway. Your credit is ruined and they still want you to pay the loans. So what do you do?
I wish I could tell you the next steps are easy but like most things in life they are hard and take dedication and time. You cant do this alone so you will need professional help. Degrees of Success has worked with clients and lenders to assist in resolving their student loan defaults and has come up with some basic steps that you need to take.
- Don’t ignore the debt anymore. Putting your head in the sand doesn’t mean the problem goes away. You will have to take some time out to talk to a specialist and get back on track.
- Rehabilitation. You can rehabilitate the loans and have the government pretend like it never happened. This is the best option if you can afford the higher than standard payment.
- Consolidation of the defaulted loan. If your loans are with say, Sallie Mae, they can be consolidated with the Department of Education and allow you to start over fresh with payment options and government programs that could provide you with a lower payment. However, this is not considered rehabilitation and the loans will remain on your credit report as previously delinquent for at least 7 years.
- Utilize a payment reduction plan. There are many different government payment options that allow for reduced payments and in some cases loan forgiveness all together
- Contact an Expert. You may be confused with all the options and not know which one makes the most sense to you. Hiring someone to sort it all out will be the best money you ever spent.
The absolute best way to determine what your options are is to contact an expert and get a handle on the debt right away. An expert should know all the options that are available and run the numbers to determine which option will be the most advantageous. Although there is usually a cost associated with using an expert the savings will always outweigh the cost.
Don’t worry…you aren’t the only one who has defaulted loans. Unfortunately student loan default has become common place. Matter of fact, student loan debt itself is rising faster than any other debt.
There is no doubt that student loan debt is on the path to being the next big financial crisis that will rock our nation. Nearly everyone has student loan debt and many of them can’t afford to make the payments.
There is Life After Default. Contact Degrees of Success to find out how you can get a handle on your defaulted student loans before they begin to garnish your wages. Once they garnish your wages there is nothing that can be done. So don’t wait until it is too late to get the help you need. There is always someone who can help you so that you are never alone.