When student loans become delinquent, it is a real possibility that the Department of Education may file a suit against you, garnish your wages, or even offset your state and federal tax refunds. Contact Student Loan Law Lawyer Shawn Stone in Phoenix, Arizona to discuss the best options to manage your debts, because in most cases, even filing for bankruptcy will not eradicate your student loan debt. However, options exist to help you regain control of your debts.
Consolidation allows you to combine all of your student loans. Instead of making several payments with varying interest rates, borrowers have one payment and one interest rate, which is usually lower. The disadvantage, however, is that it may take longer to repay the debt, possibly resulting in paying more interest over the life of the loan. If you choose to consolidate, choose an option that will allow you to pay off your loan early without incurring a pre-pay penalty. Before committing to consolidation, it would make sense to calculate the long-term consequences. For most people facing an urgent financial crisis, consolidating their loans will not offer an immediate reprieve. More practical options for impending delinquency include loan deferment or forbearance.
A deferment occurs when your loan holder temporarily allows you to stop making payments. If you hold a subsidized student loan, the federal government may pay the loan’s interest while the loan is deferred. It is important to understand that if the government does not subsidize the interest, the interest will continue to accrue and the balance of the loan will increase to include the accrued interest. You may qualify for a deferment if you meet one of the following conditions:
In order to qualify for a deferment, submit a deferment application and supporting documentation to your loan holder; however, most institutions enrolling students at least half-time will notify your loan holder for you.
If you do not qualify for a deferment, you may qualify for loan forbearance. A forbearance, unlike a deferment, is discretionary, or the lender sets the guidelines and decides if you may qualify. All student loans in forbearance, subsidized and unsubsidized, accrue interest. And if it is not paid, the interest is added to the loan’s principal balance.
Under limited conditions, it is possible to have your student loan debt discharged, or eliminated. This means your student loan debt is completely erased. Because loan cancellation often requires understanding the law, it is best to contact a Student Loan Lawyer for legal advice. If you meet one or more of the criteria below, contact Shawn Stone for more information.
School related problems such as school closure, false certification and unpaid refunds are few of the ways to get your loan cancelled. If your school closed while you were attending and you were unable to complete your degree program, you may qualify for a discharge.
False certification includes forgery and identity theft. If someone affiliated with the school forged your signature to receive a student loan and you did not benefit from the proceeds, you may qualify for a discharge. If you were the victim of identity theft, you may qualify for a discharge if you can provide court documentation proving the identity theft.
If you left school early and your school did not return your student loan to the lender, certain circumstances may allow you to qualify for a discharge.
Death and disability allow you to have student loans discharged. If you have a medical condition that is expected to result in death or last for five years, you may qualify for cancellation.
Public Service Employment such as military service, teaching, law enforcement or medical service may qualify you to have all or part of your student loans discharged.
Managing student loan debt can be difficult if you are enduring financial hardships. It is always advisable to seek legal counsel. If you are concerned that you cannot afford to hire an attorney, Phoenix Arizona’s Student Loan Lawyer Shawn Stone offers affordable payment schedules to fit most budgets.