- Get your student loans out of default. After nine months of nonpayment your student loans go in to default status. Making the minimum payments on time will keep you out of default.
- Ask for a deferment or forbearance. If you can’t pay your loans on time, ask for a deferment. A deferment can postpone payments for up to three years. Depending on your loans, interest may or may not continue to accrue if you’re in deferment. You can also request a forbearance, which pauses your loan payments for up to one year. A forbearance has different eligibility rules and interest continues to add up during the forbearance period.
Student loans are not usually wiped out in bankruptcy like other debts (although bankruptcy can provide assistance). But the court still requires that you list your student loan debt in the bankruptcy, since this is a debt that you owe. This can be difficult, especially while they were in forbearance, if you have not kept track of your loans
For federal student loans, you can locate all of your lenders and student loan debt on The Department of Education website. It’s called the “National Student Loan Data System”. Go to www.nslds.ed.gov and click the “Financial Aid Review” button, and just follow the instructions. This will give you a print out of all your student lenders and their contact information.
For private student loans, you can’t go to a single website that has information about all of your private student loans. However, private student lenders may be reporting your loans to the credit bureaus and you can locate their names by requesting a free credit report at www.annualcreditreport.com.
A garnishment is an order from a court that is sent to your employer requiring them to withhold certain amount of money from your paycheck. This money is then sent to the creditor. Mississippi law limits the amount of money that your creditors can take from your wages to 25%. Most creditors are limited to the 25%, but some creditors like the IRS, State Taxes and Child Support are allowed to get more.
What Is The Process For Getting A Garnishment?
1. A creditor must file a lawsuit against you and serve you with a summons telling you to come to court.
If you are having trouble paying back your student loan debt, the Department of Education has options that will give you more protection from debt collectors collecting on federal education loans. These regulations should make it easier for you to get your federal student loans out of default.
These rules do not apply to private student loans, only to loans made or guaranteed by the federal government. For example, if you are in default you can”rehabilitate” loans by making nine “reasonable and affordable” on-time payments during a period of 10 consecutive months. You must agree in writing to make these 9 voluntary payments (as determined by your loan holder) within 20 days of the due date. This will allow you to get out of default and become eligible for further federal student aid or other repayment programs. Keep in mind that Student Loan Rehabilitation is a 1-time opportunity only. It cannot be repeated.
Some private debt collectors who were collecting on federal loans fail to offer payments that borrowers can afford; instead offering payments based on a percentage of the borrower’s total debt. Such payments mean increased commissions for the collection agencies, but are unworkable for borrowers. Some debt collectors try to also demand minimum monthly payments without telling people about the more affordable alternatives, even though the laws of federal student aid does not require those minimum payments. In 2014, the Department of Education really cracked down on these practices.