The consequences for defaulting on your student loans are huge. Most student loans are considered in default when the borrower fails to pay for 270 days. When the loan goes into default, it is then assigned to a debt collector, which can add collection fees to the loan balance. Default loans are also subject to garnishment of 15% of someone’s wages without any court action. One’s tax refunds or social security benefits can also be garnished until the debt is paid. There are two different ways to cure a default loan – rehabilitation or consolidation. Our experienced student loan attorney can help those under student loan default.
Consolidation can only be done with Direct Loans. This allows someone to consolidate their defaulted student loans or loans into a new consolidation loan. This is like a type of refinancing. At this time, the borrower puts the new loan into an income-based repayment program, which takes anywhere from 30 to 90 days to complete. It’s important to note that not all loans are eligible for student loan consolidation, and there are limits on how much can be consolidated. Our experienced student loan attorney can help you to understand all of this information.
What is Rehabilitation?
Rehabilitation is a process where a borrower makes nine affordable payments in 10 months. The benefit of this over consolidation is that when the loan is rehabilitated, then the default notation is removed from someone’s credit report. Consolidation leaves a notation there, so rehabilitation is a great option for someone that doesn’t want this red mark there for a long period of time.
Schedule a Free Legal Consultation with a Student Loan Attorney to Discuss Student Loan Default in Minneapolis Today
To learn more about student loan default and to determine if you’re eligible for consolidation or rehabilitation, contact our student loan attorney at Hoverson Law Offices, P.A. Our legal team understand what can be done to help those going through financial issues and their student loans. In order to schedule a free consultation today with a student loan attorney, call our Minneapolis law office today at 612-349-2728.