MULTIPLE Private student loans going to default

[worriedsick]

I understand about filing taxes with 1099 pay. I have been an independent contractor for years, always being paid 1099. BUT, you only report this at tax time, and if I deposited into my checking account, by the time tax time comes around, its already spent, gone. But, I give my checks to my significant other of 20 years. he deposits them and pays all my expenses. I dont share this account with him, none of his accounts are tied to me in anyway.

From reading the posts, I am thinking that really there isnt a whole lot they can do to me. They have nothing to chase me down with. I am just thinking that most of you folks here dont want to tell someone that there might be away to get off the hook for awhle, especially if there isnt any way they can get anything.

P.S. Please dont think I am trying to get out of something. I do have a life insurance policy of over $500,000. My attorney is the trustee on the policy with instructions to pay the loans off then, at the time of my dealth. I am just trying to push them aside for the remaining 10-20years of my life and not have the burden over my head.

[creditcardfree]

Legally, you have to pay your debts. Sure it is possible that they won't find out about your income and that you can push them aside, but YOU will always know the loans are out there. Until you can pay them off, or make any progress on the payoff, they will ALWAYS be a burden over you. Sorry, it is just the truth.

[PetMom]

The student loan situation has gotten so complicated and a problem for many. Some claim students are sort of pushed into loans that banks/creditors gladly give because they get such a good deal from it all. Plus school costs so much now.

I will wager that was not the original amount, penalities, added interest and changing hands fees have probably run that total up.

In your bankruptcy was not any mention made how these would be addressed? If you are filing for and getting bankruptcy obviously you would have problems paying such a huge loan. Could you call your bankruptcy att. and ask any of these questions?

And to leave you in the lurch to let these sharks come after your check. I refer to them as sharks because student loans are no longer fair straightforward loans any more. More disturbing - some Unis have directed students to certain loan institutions - with some accusations the Unis may have been profiting.

This is a multi level question. It in involves federal law, the power of these creditors, garnishment (sometimes this varies from state to state) and what you own, if your assets are at all comingled with your partner and can they come after him.

Also, the fact you do not own realty does not give them any lien leverage against you which is good.

You mentioned you deal with cash only. I wonder if there is a way to cash a paycheck before it could be garnished - just throwing this out there, and no am certainly not judging you at all. You are planning to pay them off with your estate, you just want to survive now. Certainly understandable.
Used to be we got a paycheck in hand and went to cash it at a bank or check cashing service. Now with automatic deposit and electronic banks a paycheck could possibly be flagged for garnishment.

I do know this has become such a problem that there are websites/forums/blogs of people fighting this unfair advantage these student loan creditors have and what people are doing about it. One person actually moved to another country to avoid the absurd mess, certainly a drastic measure but he had gotten fed up with the whole thing.

Maybe an appt. with your bankruptcy att. could get you more info on this.

[PetMom]

Just read where you are an independent contractor. Can you take a paycheck in hand and cash it somewhere for cash? Then use money orders for bills, etc.

Sounds like you might have that option.

Again, I wonder what the ability would be to garnish a comingled acct. Especially if you have written them a check for a payment out of this acct.

You also need to get the facts because what they actually can do varies from what they claim they can do.

[cicy33]

You are correct regarding the 1099. There is no way to garnish this because you are paid as a subcontractor. You are not an employee. Providing you do not deposit amounts in to your checking account I agree you will be fine. Sounds like you handle that fine. If for any reason you would qualify for a refund from the government the loans would take that. I personally wouldn't allow this to drive me too crazy. Based upon the fact that you are older now I doubt you will ever be able to pay the whole amount back. I know the feelings on this board are pay the loan back, pay the loan back. but in this day and age, living is equally if not more so important. you have to have lights and water and able to live somewhere. However you do this is your business. These loan companies can however take you to court. Then I am not sure how the rules play.

[wnlbutterfly]

They "sell" these loans back and forth (whether or not you are current), and each time it gets sold to another company they can add on "fees". I read that they can legal add up to 25% of the loan in fees.

We have been lied to so many times by student loan companies, setting up payments, then poof, they sell it off and the new one says "sorry, that wasn't agreed upon with us".

Yes, they could take you to court, but what are they going to get out of that?

[woodie96]

Worriedsick....
I hate to be so blunt....but get your head out of the sand and make an honest attempt to pay your debts that you incurred.

In this post you mentioned 150K in student loans that were incurred "early in life".....and currently have limited income..

In a different post you mention approximately 40K in credit card debt with your son that you played a part in building up (from that post, it seemed like a major part).....with a possibility to make around 5K a month selling real estate (depends on the market of course)...

I realize that the pharmacist thing didnt pan out, yes that is an expensive field to train in (I have a daughter going to pharmacist school in NC) but to let those loans just sit idle, incur penalties, run up credit card debt....to, in the end, just basically want to walk away scott free for another additional 15 to 20 years, to me, is ridiculous.

In this post you mentioned that you already filed bankruptcy a year ago and cannot do that again. I'll call a spade a spade and say that something is amiss......You must be living way above your means and not learned anything from having to file bankruptcy.

Looking for something constructive to say...I would recommend grabbing the bull by the horns, and using your income from real estate to try to kick some of these down....Hopefully you can get some of these creditors to settle for pennies on the dollar, that would help immensely.
Good luck with it, sounds like you are going to need it.

[worriedsick]

You can be as blunt as you like, most folks on this blog are. But just so you are aware, I was asking this questions for a very dear friend of mine who is very financially strapped. She was sitting with me when we went to the site, and instead of registering, we asked the question with my log in. I have yet to really get any straight answers. When I posted about the credit card debt, that was me, and I have taken care of those. I worked things out with my son and with the credit card companies and this site did help me to understand things better. But in regards to my friends student loans in default, all I have heard are maybes' what might happens. I am sorry you think we are flakes, but I was basically looking for answers from others to help guide us both like I got in the past.

[woodie96]

I do apologize then. I naturally assumed all of the information was concerning the same individual.
Like butterfly stated earlier, those loans get sold off from one company to another so quickly. My daughter in pharmacy school, keeps getting letters here at the house stating that so-and-so no longer service her account, next month another letter. I told her she needs to stay on top of these to ensure something doesn't fall between the cracks.
I can see how some could fall between the cracks and I'm sure the penalties are severe.
I don't have many solutions to offer, good luck finding an answer.

[creditcardfree]

Can I suggest that your friend speak to someone at a free consumer credit counseling agency? She does need some very specific help.

Please make sure the agency you pick is certified and has a good reputation with the Better Business Bureau.

[woodie96]

Interesting read this morning posted on yahoo news...

defaulted-loans-may-haunt-seniors: Personal Finance News from Yahoo! Finance