Old defaulted student loans - payback options
I have a lot of old student debt. I lived out of the country for many years but now that I am back in the US they have found me. I need to fix it. I am willing to pay, but not to be crippled by monthly payments.
So far, it seems there are 3 options for me:
1.)Loan Rehabilitation. I am scared of this option because the payments will be too high.
2.) Direct Consolodation Loan - this option has 2 types of income based repayment types. However, I am worried about them using my husband's income, to calculate. That is HIS income, not mine. He does not deserve to be poor because of mistakes I made before I even met him. We may not even stay together, so if I come up with a payment based on his income, if we break up I will end up in default again.
3.) Wage garnishment. I could live with 10-15 percent garnishment of my wages. My problem is - my question is - can they garnish my husband's wages, too, or just mine?
I actually wouldn't mind a wage garnishment of my wages. I could live with that. I could afford 10-15 percent.
What are your thoughts?
Sorry, you are married....it is HOUSEHOLD income. Why would h
Sorry, you are married....it is HOUSEHOLD income.
Why would he be poor if the payment is based on household income? ICR payments are a percentage of income, and are very affordable. Since payment is recalculated yearly, if you break up it wont be taking into account.
You dont want a wage garnishment....that would also involve state and federal tax offset as well.
Thanks SoapLady for your reply. A couple of questions you mig
Thanks SoapLady for your reply.
A couple of questions you might be able to answer: 1.)How do they calculate ICR payments? Your definition of 'affordable' might be different from mine...
2.) What is a state and federal tax offset? Is that where they take any tax refund of mine? Is there any other reason I would not want a wage garnishment?
would someone please be so kind as to answer my questions in the
would someone please be so kind as to answer my questions in the post above? I would really, really appreciate it. Many thanks in advance.
I am no student loan expert here, by any means, but I can share
I am no student loan expert here, by any means, but I can share my thoughts, if your interested. Tax offset is taking your tax refund money. Plus, depending on the state you live in, I thought wage garnishment is more like 25%. I have not heard of a 10% garnishment. Actually, altho many folks here might disagree with me, I dont know if wage garnishment is such a bad idea either. I owe over $175,000 in student loan debt, so for me, garnishment is far better than my regular monthly payments even at 25%. I suppose it depends how large your student loan debt is and if you ever care about having decent credit again. I have terrible credit, always have, and manage to live just fine. Having no credit sure keeps me from getting credit that I dont need, running up more debt that I dont need. Are you loans federal or private and how much are they total?
Federal student loan garnishment is 15% of your disposable pay,
Federal student loan garnishment is 15% of your disposable pay, set by federal law...a few years back it was raised to 15 from 10%...this federal admin garnishment trump state law.
Why dont you you want to be garnished? It will be almost impossible to get your loan out of default, as rehab will have to be done over and above the garnishment amount. You will never get a home loan as long as your loan is in default and it also makes you AND your family ineligible for extended FEMA benefits should you need it. Plus you will be subject to taxoff set every year.
As for the ICR plan, go to the Direct Loan Consolidation website and read about it.