| While there are some types of loans you have a | | | | payment ends up being much larger that what your |
| good chance of walking away from, student loans | | | | regular payment was. |
| are not that type of loan. Here is what you need to | | | | You can also forget about getting a tax return! Until |
| know about defaulted student loans. | | | | your loan is paid in full, the government will take any |
| Consequences | | | | refund that you have coming to you. |
| If you have ever fallen behind on a student loan, you | | | | If you have an older student loan, you may be |
| probably know that your phone will ring off the hook. | | | | thinking that it will just fall off your credit report after |
| When you default, the collection calls get even more | | | | seven years and you won?t have to worry about it |
| intense. The government hires some of the most | | | | anymore. Unfortunately, like tax debts, student loans |
| aggressive collection agencies out there. They are | | | | have no statute of limitations. This means that until |
| paid on commission and so the only time they get | | | | you you pay your loan, it will follow you! |
| paid is if they collect from you. They will call you | | | | The good news is that you can rehabilitate your |
| repeatedly and often people feel harassed. Although | | | | student loan. This is a program that allows you to |
| it is against the law, some will even resort to talking | | | | make nine payments on time within a ten month |
| to family and friends about your situation. (Getting | | | | period. On time payments are considered to be |
| your contact information is the only thing they can | | | | anything that you make voluntarily within 20 days of |
| legally talk to your family or friends about.) | | | | it?s due date. (Payments received through litigation or |
| If you have a good job, chances are that a lawsuit | | | | garnishments don?t count.) |
| will be filed against you. You will lose in court. Once | | | | Once you have done this, your loan will be considered |
| that happens, the collection company will petition the | | | | rehabilitated and taken out of default status. This |
| court for a wage garnishment. This will then be | | | | means that garnishment and seizure of tax refunds |
| presented to your employer. The law requires that | | | | will end. You will also be eligible for many of the |
| your employer send a percentage of your income to | | | | benefits, like deferment, that were available to you |
| the collecting agency before you get paid. The | | | | before your loan defaulted. |