Friday, October 23, 2009

Student Loan Problems & Solutions

Know Your Rights

Depending on the state in which you live, the Statute of Limitations for most of the debts may have passed or is very close to doing so. The debts you cannot ignore are the student loans and the back taxes. Find out what the Statute of Limitations is .

Make a payment plan that focuses on housing, utilities, food and transportation. You may need to include a small amount for clothing repair/replacement also. After all these "essentials" are covered, then include the taxes and student loans. If you haven't already consolidated the loans, do so. Also, you may want to check into an "income contingent" repayment plan. That cuts the payments considerably.

Now, you can figure out how much money you have left to pay the other bills that are in collections. You do have rights under the law and the collection agencies cannot threaten you or harass you. The Fair Debt Collections Practices Act provides procedures to follow when dealing with collection agencies. You may be able to negotiate the debt payment at 30% of what is owed. Collection agencies pay the original creditor pennies on the dollar and they try to get the total owed. That's how they make their living. However, you want to make this offer in writing and not send a payment until you and they have reached a mutually acceptable agreement. Keep copies of all communications in a safe place.

Usually collection agencies file lawsuits because they're getting short on time to collect. If the SOL has run out, that's your defense because they cannot attempt to collect then. Many people do not know their rights.
Ginny

Know Your Rights

Depending on the state in which you live, the Statute of Limitations for most of the debts may have passed or is very close to doing so. The debts you cannot ignore are the student loans and the back taxes. Find out what the Statute of Limitations is .

Make a payment plan that focuses on housing, utilities, food and transportation. You may need to include a small amount for clothing repair/replacement also. After all these "essentials" are covered, then include the taxes and student loans. If you haven't already consolidated the loans, do so. Also, you may want to check into an "income contingent" repayment plan. That cuts the payments considerably.

Now, you can figure out how much money you have left to pay the other bills that are in collections. You do have rights under the law and the collection agencies cannot threaten you or harass you. The Fair Debt Collections Practices Act provides procedures to follow when dealing with collection agencies. You may be able to negotiate the debt payment at 30% of what is owed. Collection agencies pay the original creditor pennies on the dollar and they try to get the total owed. That's how they make their living. However, you want to make this offer in writing and not send a payment until you and they have reached a mutually acceptable agreement. Keep copies of all communications in a safe place.

Usually collection agencies file lawsuits because they're getting short on time to collect. If the SOL has run out, that's your defense because they cannot attempt to collect then. Many people do not know their rights.
Ginny

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The Dollar Stretcher is dedicated to "living better...for less" - including a section for those who are just starting out. You'll find more information on reducing the length of student loans.

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