Sep 30 2014

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Sep 30 2014

How Can I Repay My Sallie Mae Student Loans When I’m Broke?

Huffington Post Reader Question

Dear Steve,

I have 8 private tuition answer loans from Sallie Mae in the complete amount of $138,000 obtained between 2004-2008. After school I had the ability to make some payments and paid the $150 forbearance cost. Then after the crash of the economy I have actually not discovered work that would give me adequate income to cover my living expenditure, youngsterday care and these loans payments of $900.00 a month.

Im currently unemployed and stay at home mom. They are presently in default and have been travelled through by 3 different debt collectors. On my credit report it is marked as a charge off. I was provided a settlement of $40,000, and another offer to repay in monthly payments with.01 % interest. Either which Im unable to do.

I did make some great faith payments to the very first collection firmcollector but understood that its cash being thrown into a vacant container with a hole in it, and ceased payment. I stay in IL.

My question is can these private loans be released in bankruptcy? These loans were disbursed straight to me without any accreditation or a record of payment from Sallie Mae to my school. Likewise these loans were a gross overpayment on my tuition cap. Can it be said that these loans are not qualified student loan? If one day possible is it much better to settle these loans with the collection agencydebt collection agency standing for Sallie Mae or to filedeclare bankruptcy with an enemy case?

Elyse

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Dear Elyse,

Your situation is far too typical among the individuals who contact me.

At the heart of the matter is the fact that, right now, it does not seem like you have much, if any, earnings to commit to these personal student loans. You are drowning. They are festering.

You raise some valid points and I see you may have read my post on certified education loans and why those can be easily released in bankruptcy.

It sounds as if the loans were paid out to you and not a qualified education organization which is a key point in defense from bankruptcy.

The 2 simple areas individuals never ever seem to planning to release private student loans in bankruptcy is when the loans were used for an unaccredited school like flight school or some other professional training, and when the funds were above the limit of qualified greater education expenditures.

Once again, the information are all in this post.

Id appearancetry to find a bankruptcy lawyer who is accredited in Illinois and speak with them about these private student loan issues. If they have dealt with this prior to they will certainly be able to deal with the problem quickly. Otherwise they might require some even more awareness about exactly what is possible.

Even some bankruptcy attorneys deal with the incorrect assumption that private student loans are not dischargeable in bankruptcy. Numerous are tough to release while some are unbelievably easy to eliminate.

Based on what youve said with the loans being disbursed directly to you and for more than qualified highercollege costs then this might be on the much easier side with the right lawyer.

Choosing if you ought to settle or not is up to you. However prior to you make a choicedecide I think you should do some even more homework and talk to a bankruptcy lawyer in Illinois with student loan experience.

Id like you make any decision to settle based upon if the attorney feels your certain loans are dischargeable. At that point the option will certainly be in between if you ought to eliminate the loans in bankruptcy or settle.

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