Pasadena Student Loan Attorney
In California, student loan debt is a huge problem for college graduates. Even if you leave out those with graduate degrees, the average college graduate leaves school with nearly $40,000 in student loan debt. When you consider that most college graduates land jobs where they earn less than $50,000 per year, paying back that amount of debt can be extremely difficult. Big student loan debt can make it difficult to buy a house or car, getting a credit card can also be a challenge. It is no wonder why more college graduates are living at home with their parents than ever before.
What Happens if You Cannot Pay Your Student Loans?
If fall behind on your student loan payments, first you become delinquent, then you go into default.
What is student loan delinquency and default?
If you fail to pay your student loans on time, you are “delinquent”. Almost every student loan will become delinquent at some point during the repayment period. The student loan lender will report you to the credit reporting agencies if you fall more than 90 days behind on your payments, which of course, destroys your credit. If you continue to fall behind on your student loan payments, you will go into “default” after 270 days.
Consequences of being delinquent on your student loans
If you become delinquent on your student loans, you will be reported to the credit bureaus which will impact your credit score. This will make it difficult to get any kind of loan or credit card but may also make it difficult to rent an apartment or even some jobs. You will start receiving threatening calls and notices from your student loan demanding payment.
Consequences of defaulting on your student loans
There are severe consequences for defaulting on your student loans. In most cases, when you go into default, your student loan lender may demand the entire amount of your student loan, not just what you are behind. The student loan lender will also charge you collect fees that can quickly add up to thousands of dollars. Eventually, the student loan lender will be able to garnish your wages, without many government benefit payments and even take your tax refund. This, of course, is in addition to ruining your credit for years to come.
What should I do if I can’t make my student loan payments?
The best thing to do if you are going to miss a student loan payment or if you will be unable to make your student loan payments for the foreseeable future, you should contact your student loan lender as soon as possible. Let them know what is going on and why you are going to miss some payments. In some cases, the student loan servicer will have an alternative to offer you such as an extended grace period, reduced interest rate or one-time settlement payment. If you find that the student loan servicer won’t work with you, you still have some options. At this point, you should also contact our Pasadena student loan attorney. We may be able to help you find a solution to your student debt problems.
What Options May Be Available if I Can’t Pay My Student Loans?
For federal student loans, you may be able to enter into a loan rehabilitation agreement. Your student loan lender will specify what your new “reasonable and affordable” payment amount. You will need to make several payments of the new amount on time. If you do so, you will no longer be in default and you may ask your student loan lender to remove the derogatory entries on your credit reports.
After you have cured your default, you won’t need to worry about the negative consequences anymore and you will be able to qualify for things like deferments and forbearance among other things.
If you have more than one federal student loan, you may be able to combine them into one loan with a fixed interest rate. However, most private student loans will not offer you this option.
Many people find a consolidated loan easier to handle than two or three separate loans. You can often get a lower interest rate when you consolidate and extend the term of the payments to up to 30 years. This can make your payments much more affordable.
Forgiveness and Cancellation
In a few cases, you may get out of your student loans altogether. Realistically, this does not happen often, but it can happen under the right circumstances.
Total Permanent Disability
If you become permanently, totally disabled and you can no longer work, you may qualify for student loan forgiveness. This requires a serious injury or illness that renders you completely unable to work with no expectation that you will recover. A disability qualifies as permanent if it is expected to persist for 5 or more continuous years or it is expected to be fatal. Temporary disabilities do not qualify for student loan forgiveness. The good news is that if you die, your student loans will be forgiven so they will not haunt your family for years to come.
Falsified Certification of Eligibility
In some cases, your school must certify that you are qualified to work in the field that you will receive training for. For example, if your chosen field requires a high school diploma and your school falsely certifies that you have one in order to get a student loan, you may qualify for student loan forgiveness.
If your school closes while you are enrolled, you may be entitled to student loan forgiveness. However, if you have finished your coursework, you will not qualify even if the school closes before you receive your diploma or certificate.
Public Service or Teaching
Some direct loan programs will forgive all or part of your student loans if you take a job in public service or as a teacher. For teachers, you will usually be required to work at a qualifying school for at least 5 years before you qualify. For public service jobs, you will likely have to work in a qualifying position for 10 years before your student will be forgiven.
Private Student Loans
If you have a private student loan, your options are much more limited. Private student loan lenders typically do not offer forgiveness. You may be able to refinance the loan to get a lower interest payment or extend the term of the loan to reduce the payment amount.
Typically, student loans cannot be discharged in bankruptcy. However, in cases of extreme hardship, the bankruptcy court may permit the discharge of some student loans. If you would like our Pasadena student loan attorney to evaluate your situation to see if you may qualify to discharge your student loans in bankruptcy, call us now. The consultation is free.
What can a Pasadena student loan attorney do for you?
If you are falling behind on your student loans or you are already in default, you will need a Pasadena student loan attorney on your side. You will need an experienced student loan attorney to fight off the legal problems that come along with a student loan default. These may include lawsuits, collection actions, and creditor harassment. A student loan attorney will also deal with government agencies and student loan servicers and they can often negotiate an arrangement that is more favorable to you. Even if your student loans do not qualify for forgiveness or other types of relief, bankruptcy may give you the breathing room you need to deal with your student loans.
Let us help you analyze your student loan debt situation and find the best solution for you.
Call us and let us help you today!