Can’t Afford Your Student Loans? – 6 Tips for Fighting Back
While current bankruptcy laws often make it difficult to discharge unaffordable student loans through bankruptcy, there are many other ways you can fight back against student loan collectors outside of bankruptcy.
Here’s a list of the six most important tips for fighting student loan collectors:
1. Determine whether your student loans are federal or private. If you aren’t sure, log on to the National Student Loan Data System to find out. Only federal loans will appear on the website. Your options will depend on what type of loans you have.
2. Switch to an income-based payment plan. If you have federal loans and are current on payments, ensure that you’re enrolled in the best payment plan for you. Federal loans offer repayment plans based on your income (Income Based Repayment and Income Contingent Repayment). You’ll have to apply for these plans, but the requirements are broad enough so that most people qualify. At the end of these plans, the remaining balance of your unpaid student loans (if any) will be cancelled. Private lenders may offer similar repayment plans, but they are not required to.
3. Rehabilitate delinquent accounts. If you have federal loans and you’re behind on payments, then you’ll need to rehabilitate your loan in order to switch to a different payment plan. A rehabilitation will require you to make nine months of affordable payments on the loan. If successful, your loan will be brought current, removed from any collection agency, and you’ll be able to switch plans.
4. Determine whether your loans can be cancelled. In certain circumstances, bankruptcy isn’t necessary in order to have federal loans cancelled. If you’re permanently disabled or your school closed while you were attending it, then you may be entitled to an automatic discharge of your loans. For more information, go to studentloanborrowerassistance.org/loan-cancellation
5. Review debt collection laws. Whether federal or private, student loan lenders and debt collectors are subject to the same debt collection laws as all other collectors. The Fair Debt Collection Practices Act, the Fair Credit Reporting Act, and the Massachusetts Consumer Protection Act apply. For instance, in Massachusetts student loan debt collectors are only allowed to call you between the hours of 8:00am and 9:00pm and cannot call you more than two times per week. A student loan collector who violates these laws might be required to pay you damages.
6. Defend your case. If you’re sued for a student loan, contact an experienced consumer attorney immediately. A student loan collector, like anybody else, must prove their case in court and there can often be defenses to these lawsuits. If you do nothing a default judgment will be entered against you, which can then be used to attach your bank account and garnish wages.
If you need assistance in resolving unaffordable student loan debt, please contact us for a free consultation.
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Culik Law is a Massachusetts Law Firm. The posts on Culik Law’s blog are not intended as legal advice. If you have questions about your particular situation, CONTACT CULIK LAW for a Free Consultation.