Wage Garnishment / Debt Settlement

I was exploring the world of a starving artist for first several years that followed my schooling (defaulting all they way).

I now have (thanks to the school and experience) have the ability to start paying off my student loans. I have been saving money for the past several months as I was trying to figure out what I should do. As I was slow of foot, that decision was made for me. Wage garnishment.

I'm in the process of trying to re-establish myself, I'd like to buy some property/house one day. What would be my best plan of action at this point?

I owe 34K (fees and balance), I talked with ISAC they will do a debt settlement for 29K?

Or

If I try make voluntary payments (I can afford $1-$500) on top of the wage garnish amount ($500) for 11 months I can hope for rehab (I've been told there is no guarantee).

I have 7K of my own, the 22K for the settlement would potentially come from a family member who would needs serious convincing debt settlement would be the best option and that no better options exists.

and I work in a small office, I'd rather not be have garnishments as it'll probably get around the rumor mill.

I still live in Illinois, I went to school in Illinois.

Bump

Personally I would do the rehab and then consolidate. Will help to build your credit while removing ISAC's negative trade line.

Thank you for the response

Why risk the garnish + volunteer payments then maybe get a rehab loan (34K + interest)?

what if there is no money left in the rehab program (ie 1/09-6/09), the garnishment payments would kill my credit with no chance of removal?


The savings of over 5k seems to be a good offer...

I'm kind of unclear on how the debt settlement would effect my credit score?

I not leaning one way or the other I just want to make an educated decision.

Settlement would be negative with ISAC and either way, your lender/servicer remains.

DOE is getting into the rehab game for FFELP loans, so I wouldnt worry about funds being avaialble.

Would you recommend I make the maximum volunteer payments I can ($500)?

Once again I appreciate the helpful advice!

Only a 1% payment is needed to qualify...for if you are around $34K, $350 would work.

So if I make 11 consecutive monthly payments of $350 while having my wages garnished for $500 monthly. I should be eligible for a rehabilitation loan, those 11 wage garnishment payments will be expunged from my credit record?

assuming I continue payments and payoff my balance my credit will record will read as though I never had a default or wage garnishment?

I'm leery only because it seems to good to be true.

What would the settlement do to my credit report?

A garnishment does not show up on your credit report, only the default.

It is actually 9 payments, although sometimes it takes a 10th before the rehab goes thru. ISAC's tradeline would be removed....however your original lender servicer would remain.

With settlement you would have 2 negative tradelines. Plus you will get a 1099 for the portion they write off...so you will get hit on taxes.


Why does it seem to good to be true?? It is federal law...The Higher Education Act.

When setting up the Rehab, do I have to give my checking account info or can I send it each month? Also, I am around 34k defaulted and going to request a Reasonable and Affordable payment. How likely are they to budge? Right now they will not move from around 350/month and I would be scared to make that committment right now.

They are less likely to set you up without the checking account....70% of all accounts set up on rehab with mailed payemnts fail.

Reasonable and affordable...depends on how low you are proposing. It has to be affordable to you and reasonable to them based on your loan balance.

I am going out on unpaid leave for 12 weeks and need to be on the safe side...do you think $250-$300/mth is reachable? The person keeps telling me they may file a civil lawsuit.

Is this a federal loan?

The $250-$300 range I would think is very workable.