MULTIPLE Private student loans going to default

[worriedsick]

have 8 student PRIVATE student loans, totally, more than $150,000 which are in default and will probably grow as they take on the fees. I am 60 years old right now, and probably for the rest of my life, I will make very limited income, doing babysitting or other none w2 wage earning type jobs. My long time significant other pays all the household bills. I do not own a home and have no savings. I have been trying to pay the miniumuns on these loans but now my money has dried up. I understand that private loans can garnish your wages. If I do get a job, having these wages garnished might be lower in payments than paying the minimuns, which are around $1500 a month or more. Why would I not just let this happen?
I dont intend to collect Social Security for 12 more years.

My questions are:

if they garnish my wages, and I have eight loans, can each loan take 25% or is it one garnishment at time? I think I read its up to 25% so I would have to have one paid off before the other hits me.

once your loans are in Collections, do fees continue to be added to them? In reading the posts, it sounds like these loans get moved from one agency to another and each time this happens, do they add collection fees? does interest also continue? How long will the fees continue to grow?

I dont care about my credit, I will never buy a home, and everything else I need, I pay cash for. If I end up in a nursing home, I have insurance to cover this, so I am wondering if I should let these bills stress me out for the rest of my remaining life.

P.S. these loans accumulated when I younger, attempting to get a Pharmacy degree... but medical problems did not allow me to complete.

[creditcardfree]

If you are physically able to work, I would do so. I don't know the specifics on wage garnishment, but I don't think they can take ALL of your income.

I would also expect that fees and interest will keep adding to these loans. The only way to make it go away is to pay them. Once you have a chunk or money you might inquire if they will take less than the amount owed. A settlement of sorts. If they will, make sure you get it in writing. And never give the lender access to your bank account...or at least one with any other money in it.

Hopefully, someone else may have more to add.

[wincrasher]

From the information you have given, you sound like a good candidate for bankruptcy. Not sure if private student loans can be discharged thru bankruptcy. I know government backed loans cannot.

Most likely, just letting the loans go won't stop the harassment from collectors or the fees adding up. Most likely, some of them will sue you in hopes of collecting. Each case most likely is settled separately without regard for the others. This could be a big problem if it comes to garnishments - as they could eat up all your income since there is not a global settlement.

You need to talk to bankruptcy lawyer asap. Once you file, all the interest and "fees" stop. The outcome could be an affordable payment plan, absolution of some debt or a combo of both.

Either way you go, you should at least address this in some way. That's what responsible adults do.

Good luck to you.

[PaydayLoner]

I am not a lawyer (not even close!) but it's my understanding that both federal and private student loans can be discharged with bankruptcy only if you separately and specifically prove that paying back the loans would cause undue hardship. Private student loans used to be different but the law changed and they're the same as federal now, at least that's what a friend said who was going through this.

She didn't get approved for the undue hardship thing, and from what her lawyer said, it's pretty rare and hard to get, but it is possible. I dunno, but it sounds like your case might be one where it's possible, since you're really in a tight spot. I agree with wincrasher, sounds like talking to a bankruptcy lawyer could really give you some help, because there ought to be a way to work this out, rather than just ignoring it. I assume you've already looked into all the options for student loan foregiveness, but I know those vary a lot with private loans.

[wincrasher]

Another bit of information -

I think that SS payments are free from leins and garnishments by law.

[worriedsick]

thanks for the advice, but I have already claimed bankruptcy 1 year ago. I would of gladly included these loans if I could of, but they do not get to be included.

I dont mind if they garnish my wages.. I think my garnishment would be less than what I can work out with them on a payment plan. I have no job, and the only wages I am asking about are my social security ones, once I start to collect them in 10 years..

I suppose everyone here thinks I am crazy, but I am just wondering why it would be so bad to have your wages garnished? If they do that against my social security?

[JoshuaHeckathorn]

I don't think anyone here thinks you're crazy worriedsick. That's a lot of private student loan debt to have hanging over your head for such a long time.

Anyway, social security benefits can never be garnished, so I wouldn't worry yourself over that. However, if you have any joint checking or savings accounts with your long-time significant other, they could potentially come after those assets.

[wincrasher]

For some reason you have it in your head that all your garnishments would be limited to a certain amount of your income - here you are saying 25%.

That is not necessarily the case. Each creditor will go after you independently. Whatever lein or garnishments they get will be settled individually. So timing would be a factor. The first claimants would probably get more than later ones. There may not be any limits as to "affordability". If you are being sued in parallel, then each could get settlement without the court knowing about the other. You can see where this could go?

[worriedsick]

wincasher,, are you saying that each loan can garnish me at the same time for up to 25%? meaning 8 X 25% each. I thought that if you have a garnishment and the loan in 1st position is taking 25% that the 2nd loan cant garnish until the 1st is paid off? do fees and interest continue thru garnishment?

[worriedsick]

I suppose I am hoping to hear from someone that has multiple loans and they have a garnishment. I am wondering if all the loans that were in default were able to get a garnishment at the same time. I cant consolidate them so they will remain separate as separate accounts.

[dmontngrey]

wincasher,, are you saying that each loan can garnish me at the same time for up to 25%? meaning 8 X 25% each. I thought that if you have a garnishment and the loan in 1st position is taking 25% that the 2nd loan cant garnish until the 1st is paid off? do fees and interest continue thru garnishment?

You are correct on this. Multiple garnishments should be "first come, first serve". Once the first one is satisfied, the next one could start. Please note: this is assuming your HR/Payroll knows what they are doing in this respect. Don't always assume it will be done correctly.

[worriedsick]

again, I dont have a check,, except what I might get from my social security in 10 years.

what about if you only get paid with 1099?

[dmontngrey]

I have no idea as my experience only comes from the payroll department of a private employer. I don't know how anyone could garnish the pay of a 1099 employee. Sorry, I don't know how the reporting system works for them.

[creditcardfree]

I think if you pursue employment and your wages are garnished that is not a 'bad' thing. You are providing income to pay the debt you incurred. I think that is admirable!

I'm not aware of anyone on the board with garnished wages...does anyone else?

[JoshuaHeckathorn]

While SS benefits are not subject to garnishment, they can certainly come after your 1099 pay.

If you receive 1099 income, the company paying you has to report how much they pay you to the IRS. You also have to compute and pay your own taxes on that income, so there's a very clear trail of how much 1099 income you're bringing in. As soon as that money goes into your bank account, creditors can seize it if they have the right to do so.