What are the Consequences of Defaulting On Student Loans?

[technoreid1]

I have about 90k worth of student loans and have not paid them in a few months - We are currently broke, losing our home + We are filing CH7 right now. (We are literally living paycheck to paycheck barely getting by if you can call it that) We cannot afford my student loans after we pay for our food, and rent.

The student loans were incurred before I got married and my wife is concerned about them trying to go after her wages (we survive 100% from her wages).....

About 40% of the debt is private loans (which have come out of deferment a few months ago in which my mother co-signed for....(my mom only owns a car)

The rest of the loans are federal loans which happen to be in deferment right now and probably can be ok for another 6 months - 1year....

We will not own a house (after it forecloses) but we do own 2 cars and no money in the bank.

Would anyone know what they could do to my wife, my mom, and me for defaulting? Can they (private loans or federal) sue us?

Thanks for any info you provide,

techno

[treehugger1]

Outside of filing a form with the IRS to have any tax refunds taken from you, they can garnish 15% of your take-home pay. This does not need to go to court or involve a judgment. I recently spoke to an attorney who thought it is even posible to encourage/agree to a student loan garnishment, and as a result this takes 15% off the top of a total of 25% garnishment of wages, in most states. In my case, if I had a student loan garnishment (automatically renews and doesn't expire), there would only be 10% of other garnishable wages for other creditors to go after.

Unless you have a severe disability, you will not get out of paying your student loans. My understanding is that these will eventually find and haunt you. I have 70K in student loans and I'm now down to my last forbearance/deferrment. I probably have another 6 months before al the cards could be played to garnish wages. At that point there is th epossibility for rehabilitating the loan (make so many months of original payments) and the note goes back to the original active status.

But, I have slipped away from the subject here. If you can't pay, try to forebear/defer until the time runs out. You will continue to add interest, etc, but it can buy you a few more months.

[treehugger1]

Sorry, I re-read your post. I'm not sure what actions a private loan holder can take against a cosigner, but I suspect they have a lot more options than the guaranteed lenders have.

[technoreid1]

So you owe 70K --- Sounds like you are in almost the same situation as me.


Are they a combo of private and federal loans?

thanks, techno

Outside of filing a form with the IRS to have any tax refunds taken from you, they can garnish 15% of your take-home pay. This does not need to go to court or involve a judgment. I recently spoke to an attorney who thought it is even posible to encourage/agree to a student loan garnishment, and as a result this takes 15% off the top of a total of 25% garnishment of wages, in most states. In my case, if I had a student loan garnishment (automatically renews and doesn't expire), there would only be 10% of other garnishable wages for other creditors to go after.

Unless you have a severe disability, you will not get out of paying your student loans. My understanding is that these will eventually find and haunt you. I have 70K in student loans and I'm now down to my last forbearance/deferrment. I probably have another 6 months before al the cards could be played to garnish wages. At that point there is th epossibility for rehabilitating the loan (make so many months of original payments) and the note goes back to the original active status.

But, I have slipped away from the subject here. If you can't pay, try to forebear/defer until the time runs out. You will continue to add interest, etc, but it can buy you a few more months.