I went to college FIVE years ago and my parents co-signed for a Sallie Mae Loan. I'm not sure if thats a government loan or not. I only went there for one year and then came back home and paid for my classes in cash. I was contacted by the school shortly afterwards about paying the debt, since the loan had been cancelled. Roughly speaking, I owe about 10,000 dollars.
I was 18 at the time so, I didn't have that kind of money and didn't care about it either. A few years later, I wanted to start making payments so I emailed the school asking for a balance and payment plan. I never got a response, nor did I ever receive another letter from them. It never appeared on my credit score so I figured it had passed.
Now, five years later, I receive a call from a collecting agency saying that the debt has been passed on to them just yesterday. They want me to pay the full balance right away or pay 921 a month for the next twelve months. I can't get approved for a loan. What should I do?
2007-03-08 03:18:37 · 9 answers · asked by greenletterday 1 in Business & Finance ➔ Credit
No, you won't go to jail.
But here's the bad news: a student loan cannot be discharged by filing for bankruptcy. And since your parents co-signed, they're on the hook with you, financially and legally. Their credit history can be ruined by your past behavior.
For starters, visit www.creditnet.com These are experts on all the legal problems associated with credit. It's an excellent message board full of heavy hitters who've been through it all. Before you contact the collection agent, ask the people at creditnet about debt "validation". It's an important first step.
Also, get an attorney who's experienced with student loans, or go to the National Federation of Credit Counselors for expert advice. Once it goes to a collection agent, you face legal challenges in the courts, as well as credit history challenges.
Do NOT use the phone when dealing with collection agents. Do everything in writing, certified mail, return receipt requested, and save copies of everything. Written documents are your ammunition in court.
2007-03-08 03:36:34 · answer #1 · answered by VT 5 · 2⤊ 0⤋
The worse case scenario is you can't agree on a payment plan with the collection agency and you have to find a bankruptcy attorney and file Chapter 13 which allows you to pay off your debt in small payments (in your case they could be as low as you can afford). Note: this type of bankruptcy does not erase the debt, it only sets up a manageable payment plan.
I would say negotiate with the collection agency. Tell them you can pay, say, $100 a month for a few months. If the loan is in collections, your credit is already damaged severely. If they won't leave you alone and won't agree to a monthly payment you can afford, then go for the bankruptcy option. But even that costs like $1000 in attorney's fees to file. Student loans are from the devil.
2007-03-08 03:25:08 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Pay Sallie Mae directly- or they will default your loan (which they probably have already done) and take your taxes. I would say start off with about 200$ a month to Sallie Mae (you can find the address to send $ to on the internet or go through your old papers and find the coupon payment book). The bill collectors can do nothing to you if you are paying on a bill. I would not contact them. Find your old account number- keep all records of your payments and pay off a bit each month.
With you not paying the loan- i am sure it hurt your parents credit score. however, you can pay it off. Keep all records of any contact made to Sallie Mae.
2007-03-08 06:38:18 · answer #3 · answered by glorymomof3 6 · 0⤊ 0⤋
You need to try to make arrangements to pay it. I am sorry that you were so young and didn't understand that you have to pay back a student loan. You don't have a choice or they will go to a judge to get a judgement against you to be able garnage your wages. You can't even file bankrupacy on a student loan. I would talk to the collection agency and see if they will work with you if you can't afford 921 a month but you need to tell them you are willing to try to pay the amount off.
2007-03-08 03:29:15 · answer #4 · answered by Jennifer U 2 · 0⤊ 0⤋
Since this is a student loan you can not negotiate a pay off price, you owe the outstanding balance in full. They should work with you on payment terms, you can't get blood out of a turnip! Student loans also can not be filed in bankruptcy court, call them back and work out a reasonable payment plan. Next they will be calling your parents for payment since they co-signed, can't get out of student loans.
2007-03-08 03:31:53 · answer #5 · answered by fitforlife0032 2 · 0⤊ 0⤋
You can deal with those collection agencies. If you can't afford $900 a month, you can't pay them that much...tell them you can only afford $100 a month (or whatever your price is) and they'll work with you.
Usually they will settle at about 50% if you can pay it off all in one chunk or in 2 or 3 payments...
2007-03-08 03:23:57 · answer #6 · answered by Nasubi 7 · 1⤊ 0⤋
my cousins work for sallie mae in new york. you'll have credit collectors calling you non stop until they get their money. if you dont pay it, its like any other loan - your credit will get f*cked. so will your parents since they co signed.
2007-03-08 03:21:18 · answer #7 · answered by Anonymous · 1⤊ 0⤋
Sallie Mae will jump out of her boot after you with her broom yelling at you in Japanese.
2007-03-08 03:21:04 · answer #8 · answered by Priceless Purity 3 · 0⤊ 1⤋
U will be in Jail
2007-03-08 03:21:39 · answer #9 · answered by santhosh k 1 · 0⤊ 3⤋