soaplady,I have a student loan that is in defaul

Have you proved to them that there is no way you can make this down payment?

Is this a federal or private loan?

it is a federal loan, and i am in the process of proving financial hardship. I am mostly concerned about them going after my wife and her finances. since i learned about the possibility of garnishment i removed myself from any joint accounts we have and had them placed back in maiden name. I dont know if that matters but i panicked at the thought of her being responsible for my debt.

From my experience having a defaulted loan, in the past (it's now taken care of), the loan was only in my name. However, at the time, my hubby (then) and I had a joint account. Legally, a student loan lender isn't suppose to touch your spouse's money. But, that doesn't mean they won't. It was a 'good call', on your part, to remove you name from joint accounts. If you don't mond me asking, what lender did you use for your student loan?

my loans are both federal subsidized/unsubsidized stafford loans. my original lender was South Carolina student loan. I got the call stating that if i didnt agree to pay a good faith amount (ranging from 2600-8000) and pay X amount of $ per month by 2 pm monday they would begin AWG. I am currently unemployed and explained that any type of down payment would not be possible but i would agree to pay a set amount per month. They told me to "think about it" and call back on monday. Since then i have tried to read everything possible to educate myself on what the options are but find myself lost.

Well obviously since you are unemployed, they cannot pursue AWG. If you have told them you are not working, obviously they should realize this. They cannot garnish your spouse, nor do they seize bank accounts.

Tell them you want to rehab. This requires 9 monthly on time payments of approximately 1% of your balance. They CANNOT make a down payment a condition of your rehab. They can ask but they cannot require it to qualify for a rehab.

Another suggestion is to go straight to consolidation thru Direct Loans. If this loan is still held by South Carolina, there really is little benefit to rehabbing first.

thanks for the help, I was able to get affordable monthly payments with no down payment. It was funny how their tone changed and were more willing to work with me once they realized i knew my rights and how the process works. i contemplated filing a complaint against DCS but would much rather put this all behind me. thanks again for the help!