My grandfather co-signed for me a few student loans through aessuccess.org in 2004. Within 3 days, I received the funds. The debt collectors started calling and harassing in 2009 claiming my 5 years was up, so it was time to start paying the debt.
They wanted me to pay over $700 a month in payments. I was only making $8.50 per hour. I did not graduate because when I applied for graduation (at a local community college), they said my 5 year plan was up and I had to take another year of classes to graduate.
I was a single parent, so it was not feasible for me to continue going to college. I offered these people $150-$200 a month payments, which would still have been very difficult for me to come up with, they laughed and said that would not even put a dent in what I owed at that point in time.
So my boss at the time, an attorney, told me to just not worry about it. Now, several years later, I've managed to ruin my grandfather's once perfect credit, and my own. My grandfather receives social security income only, and can't even begin to pay the payments. I am a stay at home mom of 2, relying soley on my husband, who does have a good income (the debt was years prior to him and me getting together), but with the one income we do receive is completely exhausted, we cannot afford any other payments.
I still have no idea how I was allowed to borrow $21,201 per semester for a college that only costed about $2,500 per semester. I borrowed 2-$21,201 loans, and 1-$4,000 loan. I used the money to live on and some college expenses, yet now looking back, some purchases were completely bogus.
I wish at 18 years old, I would have put more thought into borrowing in the first place because it was completely unnecessary since I received the full PELL Grant. Please help me! I feel that I will never get my grandfather or myself out of this mess! These collection companies will not budge on payment amounts or arrangements.
What options do I have to settle this issue? Can I at least help my grandfather declare bankruptcy? Can this company be help partially responsible for loaning this kind of money for an inexpensive community college? Can I declare bankruptcy? What are the laws about a minimum payment? Is there any way I can start over and try to reclaim my credit? I need help!
Tasha
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Dear Tasha,
First off it sounds as if your loans were private loans. In that case you do have some good options.
Depending on what state you live in the statute of limitations may have already run it's course and if that's true then your private student loans could be easily discharged in a chapter 7 bankruptcy within about 90 days.
If you need more assistance dealing with these issues then you can student loan assistance here.
But it might just be that your private student loans can be fully or at least partially discharged in a consumer bankruptcy anyway. This will depending on you finding the right attorney who has experience in dealing with student loans and bankruptcy. If you want to find one, click here.
If you have made a good faith effort to pay and your income is unlikely to rise based on your training and field, then at least a partial discharge might be easier than you think.
As one student loan servicer told me recently, "Many borrowers and attorney's don't even try for the discharge as they assume it's impossible but that's not actually true. Many courts will provide relief for student loans if this petition is filed and the borrower can show they made attempts to pay the debt, doing so will be an extreme hardship and that their economic situation is not likely to change in the future."
And then we have the issue that a significant amount of the student loan you were issued was used for unqualified educational expenses. That should be able to be discharged as well in certain situation. Read this.
You can learn more about dealing with student loans in bankruptcy here.
As far as your grandfather goes, if these are private student loans then the lender could only attempt to collect by suing him. Since it appears the majority of his income is public benefit based it seems unlikely they would be able to successfully garnish his wages.
However, as always, there is no substitute for you speaking with an attorney licensed in your state for specific legal advice.
If you have a credit or debt question you'd like to ask, just click here and ask away.
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