I can't pay a student loan... What is the worst that can happen?

Question

This is similar to my other question I asked an hour ago. It is somewhat different, however.

Here are the facts of my situation:
1. I haven't been able to find work

2. I have no bank account (no savings/checking)

3. I live at home with my parents at the moment (sadly)

4. I don't own a car due to #: 1 & 2 above

5. I don't own any real estate. In fact, the only thing I really own are books, computer, printer, clothes, TV, and a radio.

These are the facts concerning the Sallie Mae loan:

6. The loan was for under 7,000.00 and was for college

7. I had a cosigner who agreed to cosign the loan.

8. The cosigner is now unreachable and the only income she receives now is SSI and VA (vetrans assistance)

9. The loan defaulted and my credit report says it was "charged off" (huh? what does that mean?)

11. An attorney now wants to sue me.

What is the worst that can happen to me given my aforementioned situation?

Answer 1

The worst thing that can happen is the cosigner could be tracked down and have some major problems - debt collection agencies etc etc.

If it goes to court you can plead you case (basically say what youve said here)
And they will 'garnish' any future salary you will get (they will take a percentage until its payed off.)

Can you really not find any work? especially at this time of year even part time work would show the court that you were at least trying to repay.

Answer 2

Wow! What a list of excuses. You do not own anything so they cannot take anything away except perhaps your computer and printer. It is possible that you will be sued but even if you are found guilty they cannot touch you. No jail time. If you are over 18 then your parents are completely out of the picture. They will try to find your cosigner and make her pay. They will huff and puff but if you aren't earning any money and have no worldly possessions to speak of then they cannot hurt you. Your credit, however, will be very bad for a long time.

Answer 3

In addition to the other possible problems mentioned, if you do get a job and ever get tax refunds, those will be seized to pay off the loan. So you should make sure that you always owe income tax at the end of the year.

If you are unemployed you should contact them and ask for a hardship/unemployment deferment. I've done this plenty of times and never had a problem getting deferments. The only problem is you have to make sure you renew your deferment before it expires because the deferment lasts for only 6 months - but you can keep renewing it if you have no job and can't pay. Depending on your type of loan, you may not even be charged interest during your deferment.

Answer 4

Your bank assets can be seized. Also, you can ruin both your credit and the credit of your cosigner. This leads to huge problems down the line if you want to purchase a car, home or even an apartment. Find a way to pay the loan, even if its in monthly installments. Attorneys mean business.

Answer 5

It can haunt you in the future...

You cannot discharge a government education loan through a bankruptcy proceeding.

It will stain your credit so much that you will have problems purchasing anything on credit, including a vehicle.

You will never be able to buy your own home.

The under $7,000 now will have compounded interest, meaning you may owe over $100,000 in the future.

Contact your lender and get the forbearance documents. You can have a forbearance for up to 12 months.

Good luck!

Answer 6

I was just approved for student loans. Why would you need a co-signer, are you under 21? You only have to pay 50 dollars a month and they have a low fixed interest rate for students. Worst that will happen: You will continue to get harrassing calls, emails, and snail mail. You will have bad credit. It it goes on long enough they will take you to civil court, and if you don't show up they can arrest you and put you in jail, release you and when you do get a job they can garnish your wages, take your tax return, take money from a bank account if you open one.

Answer 7

once your loan has been "charged off" that means it has been turned over to a collection agency and that the loan will no longer be gathering interest, if you avoid it for 7 years it will go away, but you will have bad credit/no credit, talk to the company (collection agency) and get on some kind of payment plan, you may be able to negotiate with them in some way, similar to a credit card company, to reduce the total that you owe, now get a job, even if its a crappy fast food one...

Answer 8

The biggest mistake that you can make, and may have already made, is not staying in touch with your lender. I have deferred my loans, put them into forbearance, been given lower payments. They will work with you if you just fill out the paper work. You can forebear your loans for lack of work, I've done it. Just don't pay and hide out, you will completely wreck your credit and your loans will grow and grow with penalties. Face the situation and try to work something out.

Answer 9

Why don't you call the lender? You can get a deferral on the loan if you are unable to pay, or they may be able to rehabilitate your credit if you agree to repay it at $100 a month or so.

Answer 10

Hmmmm-the worse?
All those things you say you don't have----you will never have because your credit is ruined. Get used to renting your house because no bank in their right mind will ever loan you money. While we're on the subject, hope you like driving 20 year old cars because those are the only ones you'll be able to pay cash for as no bank in their right mind would give you a car loan.
Sounds to me like you've wasted an education and are a deadbeat. It bothers me that people like you make it so hard for the rest of us to educate ourselves because of the high default rate on student loans by people like you.
Get a job you lazy prick.