I am currently an immigration attorney in Baltimore, MD. My parents took out a private loan for me for my undergrad degree from a tiny credit union in Ohio. I was able to defer payments while I was in school, but as soon as I graduated (May2019) payments began and are $1600 a month. The credit union is not allowing me any more deferments until the loan is current and I cannot refinance because my credit score is poor (because I have defaulted on this loan). They are going after my grandmother, the co-signer, and threatening to take it to court and garnish wages if I don’t make account current (which is $6000 at this point). Any advice is welcome! I feel like I’ve tried everything.
Sadly, both you and grandmom are “on-the-hook” for this/these loan(s). This is why I never had a co-signer.
At this juncture, I would see if you can apply for a “deferment” or “forbearance” elsewhere (i.e directly through the “crooked Fed”). Deferments are always better than forbearances, however. For example, after being on certain types of deferments for at LEAST 20 years, the rest of your student loan debt is normally written-off. You’ll have to do some hefty research because the “student loan world” is far more crooked than this administration (and that’s saying A LOT!).
If you’re considering bankruptcy, do know that more often than not, student loans cannot be included. If by some miracle you ARE able to include your student loans, you may or may not have to claim that as “unearned income” on your taxes. Also, bankruptcy lasts on your public record for ten (10) years, so you’d really want to consider that as well.
I wish you and grandmom best of luck in this financial tragedy.
Can I apply for a forbearance / deferment through the Fed for a private loan?
I THINK you can, but please don’t quote me. These are very murky waters. The whole student loan process isn’t very transparent at all; no matter what they might claim.
Private lenders are sharks.
Sadly, you cannot get deferment or forbearance assistance at all via the feds for private student loans.
If you contact the lender, let them know your situation, maybe they can do something for you payment-wise. Because it is a credit union, and private, they can do what they want to. It seems that they would want to get a lower payment than nothing at all. Maybe you can get them to work with you.
Otherwise, filing for protection under chapter 13 bankruptcy might be an option. That way, you can protect your assets and your wages from being garnished. (Each creditor will basically take a piece of your income… getting a % of the pie based on the type of debt (secured creditors are paid the value of the debt while unsecured creditors get what is left…(i am not 100% sure how the courts are treating student loans now, but because it’s a private debt, it’s not as big a deal as a public student loan). After the 5 years of paying the chapter 13 trustee through your confirmed plan, then the balance of debt is discharged. It stays on the credit score for 10 years, but is a good option).
Another option to consider is a consumer credit counseling such as CCCS. Its much like a chapter13 except its outside of the bankruptcy system. You would pay a lesser %… your credit rating would change to reflect “slow pay”…
Lastly, you could try and offer the credit a lesser amount and pay it off in full. However, that might be just as difficult if you don’t hsve access to cash. If you convince them this is all they are getting, as an alternative to bankruptcy for ex, they might accept less.
In a bankruptcy, creditors get crammed down… and unsecured debts get pennies on the dollar.
So you might get them to agree to 25% of the note or even less.
Hope that helps.
I want to direct you over to our dispute tools page. We do have a dispute tool for private student loans.
You can read more there on the private student loan dispute process. We have so many members being abused by private student loans. This is why we have to get organized to challenge this. Filing a dispute is one way to demand they prove you owe this debt. It does not guarantee they will stop collecting. It will at least flag your credit and create a record that you are disputing this debt.
I would also consider writing a letter about your story and sending it to your state reps and Attorneys General. They really need to have it in their face and hear the impact it has in your life. Not you or your grandmother, or anyone deserves to be bullied and put in fear…Just because you decided to seek a higher education.
you are not a loan!