22
Dec
12

Student Loan Default Problems? Rehabilitation May be the answer.

If you are in default on your student loans, you can renew eligibility for new loans and grants and cure the loan default by rehabilitating the defaulted loan.

Loan rehabilitation for loans may be requested after you have made nine payments within 20 days of the due date during a period of 10 consecutive months.

Collection does not necessarily cease during the rehabilitation period.  It will only stop if the rehabilitation agreement specifically provides for an end to collection efforts.  Otherwise borrowers will continue to face the usual range of collection efforts, including tax offset, even though they have made a repayment commitment and are in the process of rehabilitating the loans.

Neither the loan guaranty agency nor the Secretary shall demand more from you more than what is reasonable and affordable based on your total financial circumstances.  This calculation includes both you and your spouse’s income and expenses including housing, utilities, food, medical costs, work-related expenses, and dependent care costs.  You will need to provide back up documentation.  Basically, the Department of Education sets out minimum percentages that you have to pay on your loans.  Of course, if you are dealing with a collection agency, collection agencies get more money the more you pay.

If you are in default on your student loans and would like to explore rehabilitating the loans, please contact the Zarcone Law Firm at 619-800-3082 for a FREE consultation.

 

 

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The content found on the financialfreshstart Blog is not legal advice and is purely for informational purposes. The Zarcone Law Firm does not guarantee the accuracy, integrity or quality of submissions. The information provided by the bloggers on this site may not represent the opinions of the Zarcone Law Firm or its affiliates. The information contained herein is not a substitute for the advice of an attorney.

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