Legal Question in Credit and Debt Law in Minnesota

My husband is batteling with his loan company Sallie Mae right now. He has went into default with his private loan and they are telling him that he either has to pay them $15,000 in two days or they are going to either garnish 25% of his wages, take his taxes, and go after his grandmother (the co-signer) for the money.
He has had this loan for 3 years now and deferred it 3 times. He deferred it becasue he could not make the $250 a month payments on it, and wanted to save up money so he could make payments. The last time he asked to defer his loan they said either he pays the $250 a month or give them a $500 "good faith payment". Hes already given them $450 to defer his loans, ($150 each time) and he did not have the $250 to pay each month or the $500 for the good faith payment, so he went the worst rout possible and did not pay them at all and ignored them. A year and a half later now they have sent him to collection, his loan went from $9,000 to $32,000, and he only makes $18,000 a year. What can we do?

Asked on 12/29/09, 8:48 pm

David Anderson Anderson Business Law LLC

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There are a number of options your husband could pursue:

Bankruptcy is probably the lease desirable, and can be costly to file.

Another possibility is to renegotiate the loan, with a structured settlement (less interest and possibly reduction in principal as well).

The possible outcomes are determined by the terms of the Note (Secured or Unsecured?) and his total financial picture.

Call or email for assistance.

I have been involved in Debtor/Creditor law for over 28 years.

Answered on 1/04/10, 3:55 am

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