Legal Question in Credit and Debt Law in Missouri
defaulted student loans referred to collection agency
I have an excessive amount of student loan debt ranging from $1,000 - $9,500 from 1989 to 1998. Three of them have been sent to a collection agency for the U.S.Dept of Education with the rest with a state agency. The latter have been under deferments and forebearances until now. My annual income averages less than $9,000. I am presently working a limited position for less than $800/month. My living expenses and other debt total more than $1000 monthly. All were made before I remarried. I own no property, other than my own vehicle for which I am making payments. I can not pay these debts today or in the prospective future. I tried sending what I could and was informed through harassing phone calls that it was not acceptable. How can I have these debts released, discharged, eliminated or reduced so that I can avoid any garnishments or lawsuits against me?
2 Answers from Attorneys
Re: defaulted student loans referred to collection agency
It is unclear whether you would be able to get out rom under these debts through Bankruptcy. You may be able to consolidate some or all of your student loans, thereby reducing the monthly amount you would need to pay. There are many programs for loan consolidation, search the internet, or call your lender, and they may tell you of some.
You seem to feel you are underemployed, and that is why you are unable to pay back your loans. Besides Bankruptcy, there is another avenue that may be a win win situation for you. So as to get people into otherwise underserved jobs, Congress, and a few states have created Student loan credit programs. For instance if you teach children in a rural or impoverished area, you may be able to have some of your student loan debt excused. Other activities like Americorp and Peace Corp work can get you a reduction of your student loan debt. If you search the internet, you should be able to find the activities that carry the extra bonus of reducing your student loan debt. Many do not pay more than you now make, bu teh laon reduction would be like extra pay for you, while saving your credit rating from seeking lower than it probably now is. You may also be able to consolidate some or all of yoru loans, so as to lower the monthly amount you owe.
Re: defaulted student loans referred to collection agency
I sincerely wish I had better news for you than I do. The only way to avoid this debt is to file for bankruptcy, and that is not a sure thing. You need to see a competent bankruptcy lawyer to find out if under your situation a court might permit discharge of the obligation.
There is no statute of limitation for student loan debt. Once you owe the debt, you owe it. The Department of Education has broad powers to get its money. If you are getting harassing and abusive phone calls, that may be independently actionable under the Fair Debt Collection Practices Act.
I would urge you to see a Legal Aid lawyer as soon as possible.
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