I am paying the credit card company $80 per month with very little payment going toward interest. I have a Sallie Mae student loan that I can not afford to pay. What will happen if I stop all payments? I am on Social Security Disability and my only resource is 1/8 interest in my mom's home and a car. Thank you.
2007-03-10 04:48:14 · 5 answers · asked by rebecca 1 in Business & Finance ➔ Personal Finance
Thanks for telling about filing Bankruptcy but I do not think this is possible since Sallie Mae is a Government loan.
2007-03-10 14:56:22 · update #1
Creditors never forgive, once you make a mistake it sticks with you for life.
Your best option would be to get a third loan why you are still able to and pay off everything with it. Payments on that loan may be 100-200 a month but at least you wont have debt elsewhere.
That is called consolidating your debt, its the best way to save your credit rating.
2007-03-10 04:59:46 · answer #1 · answered by Anonymous · 0⤊ 1⤋
You don't say if you are considered to be permanantly disabled by the social security administration?
If so, you really should check into getting some (if not all) of your student loan debt forgiven. They do this in the case of EXTREME financial hardship (and yes, you'd have to prove it, of course.) Even if you're temporarily disabled, they may be able to work out a deferrment for you (which would mean that you'd still have to pay eventually, but they would stop hounding you for the money for as long as the deferrment was in effect.)
If you were able to get that debt off you (even for a little while), you could start making larger payments on the credit card. If you see that you can make larger payments, it probably wouldn't hurt to call the credit card company and make arrangements with them. (Since they can't attach your social security benefits, they may very well be willing to work out something with you if you agree not to use the card. But if you make that agreement, you MUST stick to it -- or the penalties get worse.)
If you simply stop making payments, the credit card company will eventually come after both your car and your mom's house. (You might be well advised to get your name off the house, unless you want your mom to end up paying for your mistakes.)
2007-03-10 05:26:49 · answer #2 · answered by ISOintelligentlife 4 · 0⤊ 1⤋
All of the above are good suggestions....However, for your peace of mind...and contrary to what "ISOIntel" stated above, know that your debt is what it's called an unsecured debt, hence the credit card company and/or the Government (student loan) cannot come after your mom's house for lack of payment...Even if she co-signed on it...unless she used her home as collateral. If you were to file Chapter 13 or 7 (Bankruptcy) those debts will probably be discharged. I am not saying you file Bankruptcy...that should be your last recourse. However, most certainly your credit will be destroyed.... Now go and don't incur debt anymore....
2007-03-10 14:47:17 · answer #3 · answered by kalamity 3 · 0⤊ 1⤋
Go directly to both creditors immediately, as in Monday!! If the credit card is over $3,000 a debit service company may help you through this problem, however, it will not do the college loan.
Plan on writting to both these services and put your situation to them in a straightfoward way. Offer them an alternative payment based on what you can in fact pay. Be prepared to lose the credit card.
Keep copies of these letters so you can send them to Credit Reporting Agencies in the future. Good Luck.
2007-03-10 05:01:26 · answer #4 · answered by jerry g 4 · 0⤊ 0⤋
yes you are in debt get some help ok good luck
2007-03-10 05:09:58 · answer #5 · answered by pattibcacl 6 · 0⤊ 0⤋