Student Loan Lenders Aggressively Collect Loans Even During Economic Collapse
Make no mistake, our economy is in bad shape. Economic conditions are worse today than at any time since the Great Depression. Need proof? 42 million Americans are receiving Food-Stamps. Unemployment in many areas has soared to double digits. Food prices are up dramatically as a result of fuel costs, packaging, and crop failures. Greedy corporations are hoarding cash. They have invested in hundreds of millions of dollars in their own stock over the past year, like hogs at the trough! Meanwhile, American families go hungry. Highly profitable corporations feel no patriotic responsibility to create American jobs and continue to outsource jobs overseas! Congress operates in a state of gridlock – nothing is accomplished. The American people – hard-working people – from coast to coast, stand on the sidelines, dejected and angry. Still, many nourish the hope that tomorrow will be a better day.
For many of us, that “better day” has not yet arrived. We can’t see it on the horizon. We have lost our jobs, our homes, our health insurance, spent down our savings to cover living expenses, and now we are at the end of our rope. The top 1% make more money than the first 50% of American workers. Billionaires have little concern for everyday people.
As if it were not enough that our jobs, homes, and security are gone, there are many Americans who are also sick. Many, are simply too sick to perform any meaningful work. Faced with no other option, these Americans apply for Social Security Disability Benefits and SSI.
Creditors simply don’t care that we are disabled. They insist upon payment no matter what.
Unsecured creditors such as credit card companies, doctors, hospitals, clinical labs, radiology outfits, and other health care providers can drive us crazy by engaging high-pressure bill collectors to call us fifteen times every day about bills we simply cannot pay. But, because their debt is typically “unsecured debt” they know it will be extremely difficult to collect if you cannot, in fact, pay. They can harass and harangue, but that’s about all.
Student Loans = Serious Debt! Beware of Liens & Wage Garnishment!
Student loans, like federal, state and county taxes, are serious debt. Folks who fail to pay-up on their student loans may really be in peril. What do I mean? I mean that such loans are backed-up by the federal government, and the government is deadly serious about collecting their money. Companies holding portfolios of student loans will not hesitate to obtain liens and institute wage garnishment proceedings against you if you do not pay.
“What can student loan debtors do to avoid incurring the wrath of such lenders?”
Federal Law Provides Avenues for Discharge and Forgiveness of Student Loans
There are several special circumstances that allow student loan debtors obtain “loan forgiveness”and “full discharge” their student loan debt.
This article is concerned with two, out of several, ways to obtain discharge of your student loan(s). I will outline others in future articles.
Discharge of Student Loan Debt for Disability and/or Death
If you are permanently disabled, it is possible to obtain conditional or permanent discharge of your student loan debt. I’m talking here about total disability, certified by your doctor on Form OMB No. 1845-0065. Contact the company that services your loan(s) and request s copy of this form.
When you receive the form, turn your attention to “Section 2.” Complete instructions for completion of the form are provided there.
You will be asked to obtain certification of your disability from your physician or from authorized personnel of the Veterans Administration.
If you have been determined disabled by the U.S. Social Security Administration you might think their decision constitutes proof of disability. It does not! You must follow the instructions on the form and have your doctor certify your permanent and total disability, and submit same to the lender within ninety (90) days of the doctors certification.
Loan funds to be disbursed or scheduled for reimbursement after the date of the physician certification, must be cancelled. If proceeds are received by the borrower, they must be returned to the lender within 120 days of the disbursement date. If you fail to return them within this time frame, you will not receive a discharge. If your loans are “conditionally discharged”, your debt may be given up for assignment to the U.S. Department of Education for as many as three years before your loan debt is finally and permanently discharged.
If a loved one has expired with unpaid student loan debt, contact the company who services the loan. They will guide you through discharge/forgiveness process.
If you cannot pay your student loans and you are not disabled, there are other circumstances that allow for forgiveness or discharge.
If you have student loans that you cannot pay, you may be tempted to hide. You are frightened, embarrassed, and maybe even angry. Don’t let your fear and anger cause you to stick your head in the sand. If you do so, the lenders will pursue you relentlessly. No, you must use the rules to obtain relief from these unpleasant, greedy, people. Get the facts, read the rules, and be proactive in dealing with your inability to pay. Loan forbearance, discharge, conditional discharge may be available to you. In some cases, you will be required to file bankruptcy, and go before the bankruptcy judge to demonstrate that paying the loan would cause you an undue hardship. None of these potential solutions are certain or easy. But, do not ignore the debt. Be assured that the lender will not allow you to forget. They usually strike when you least expect it and cause devastating financial difficulties.
Good luck to all!