Help I'm going to default on my Student loans

[aew1129]

I owe 100,000 in student loans, and can't pay it. I went to Seton Hall university and payed $100,000 for a criminal justice degree. Now I'm not using my degree and can't pay it back. I've been out of school for 3 years and have managed (with the help of my parents and Fiance) to not make a late payment, Yet. But will no longer be able to receive assistance from either of them. the problem is that after I got out of school I refinanced to help lower my payment. I refinanced with Collegiate Funding Service. Its a total of 2 loans one for 19,000 is a federal loan with only a 2.5 % interest rate. But the other $81,000 is a privated loan with a variable rate which is currently 9.25 %. So my monthly payment is $762 which is paying down $120 of principal out of the federal loan. the rest is interest only. So as we speak I'm not working anything off the principal of the big loan with the high interest.
basically I'm writing here to see if anyone knows anything about the infamous UNDUE HARDSHIP. I'm currently self employed and make between 20- 25,000. that doesn't net me to much money after paying all of those self employment taxes.
If I went to court is there any way they would consider a $762 monthly payment for the next 30 years as UNDUE HARDSHIP. Think about it, doesn't it sound like a hardship to you??
even if they wouldn't clear the whole debt would they do anything??
Even if they would just stop the interest maybe I could afford $500 a month if it was all going into the principal.
When you go to court do they look at each case and apply their own reason, or is everything predetermined. ( Do they think you should just get 2 more jobs and pay it off)
If anyone knows anything about the process I would greatly appreciate their help.

Thank you

[lrprn]

I owe 100,000 in student loans, and can't pay it. ... basically I'm writing here to see if anyone knows anything about the infamous UNDUE HARDSHIP.

The definition of "undue hardship" was set in 1987 in Brunner v. New York State Higher Education Services Corp. (October 14, 1987, #41, Docket 87-5013). That decision adopted a three-part standard for undue hardship and all three parts must be met:
- That the debtor cannot both repay the student loan and maintain a minimal standard of living.
- That this situation is likely to persist for a significant portion of the repayment period of the student loans.
- That the debtor has made good faith efforts to repay the loans.

You will be required to provide evidence of any additional exceptional circumstances that are strongly suggestive of a continuing inability to repay, such as being disabled (which you are not). The court also looks at whether you have taken advantage of forbearances and deferments (have you?).

Since you are currently employed, and although paying your loans is tough, you likely can maintain a minimal standard of living and still pay them, for these reasons, you won't qualify for an undue hardship cancellation. Even students who are on full disability have had great difficulty getting their student loans cancelled.

You didn't say why you aren't working in the criminal justice field you used the school loans for, but when you signed on the dotted line and took the money, that legal contract was binding. The govt and private lenders expect repayment even when it impacts your lifestyle negatively. It's far too easy to find yourself in your situation when the loan totals are climbing and you aren't matching the required monthly payments against what you can earn after college is over.

However, you certainly aren't alone in your situation, and cancellation isn't your only option. Check out the Nolo site at http://www.nolo.com/article.cfm/pg/1...3/208/135/ART/ for an excellent discussion of all options when you can't pay your student loans, including forbearance and deferment. Hang in there - keep us posted on what you decide to do, ok?

[9877donna]

I owe 100,000 in student loans, and can't pay it. I went to Seton Hall university and payed $100,000 for a criminal justice degree. Now I'm not using my degree and can't pay it back. I've been out of school for 3 years and have managed (with the help of my parents and Fiance) to not make a late payment, Yet. But will no longer be able to receive assistance from either of them. the problem is that after I got out of school I refinanced to help lower my payment. I refinanced with Collegiate Funding Service. Its a total of 2 loans one for 19,000 is a federal loan with only a 2.5 % interest rate. But the other $81,000 is a privated loan with a variable rate which is currently 9.25 %. So my monthly payment is $762 which is paying down $120 of principal out of the federal loan. the rest is interest only. So as we speak I'm not working anything off the principal of the big loan with the high interest.
basically I'm writing here to see if anyone knows anything about the infamous UNDUE HARDSHIP. I'm currently self employed and make between 20- 25,000. that doesn't net me to much money after paying all of those self employment taxes.
If I went to court is there any way they would consider a $762 monthly payment for the next 30 years as UNDUE HARDSHIP. Think about it, doesn't it sound like a hardship to you??
even if they wouldn't clear the whole debt would they do anything??
Even if they would just stop the interest maybe I could afford $500 a month if it was all going into the principal.
When you go to court do they look at each case and apply their own reason, or is everything predetermined. ( Do they think you should just get 2 more jobs and pay it off)
If anyone knows anything about the process I would greatly appreciate their help.

Thank you

Have you checked into getting a 'deferment' on your Student Loan? Or an 'Economic Hardship'.Check your Student Loan's website or call and see what kind of deferments they can offer you.Do it now.Don't wait until you are too far behind.
If you haven't already looked into it it certainly can't hurt.
Good Luck to you.
Donna

[FoolAndHisMoney]

You didn't say why you aren't working in the criminal justice field you used the school loans for, but when you signed on the dotted line and took the money, that legal contract was binding. The govt and private lenders expect repayment even when it impacts your lifestyle negatively. It's far too easy to find yourself in your situation when the loan totals are climbing and you aren't matching the required monthly payments against what you can earn after college is over.

I'm wondering too why you aren't working the the criminal justice field? It seems with that degree you can do much better then 20-25k. We can all bet there is no shortage of criminals and you don't have to worry about being outsourced to Asia.