How Do You Deal With Student Loans In Default?
With college becoming more expensive, it is hard to avoid defaulting on your student loan. Defaulting involves missing payment on your loan for nine straight months. This means that the lender of the loan can turn your account over to a third-party agency for collection, which will add additional penalty charges until the debt has been paid. In addition to these penalty charges, you could also be sued for repayment, or face wage garnishment so that 10% of your paycheck can be taken to repay your loan agreement. Here are some ways to avoid and deal with defaulting student loans. Deferment and Forbearance • A deferment is defined as the temporary relief from paying debts for up to three years. You can take a deferment more than once throughout the lifespan of your loan, as long as the time-frame does not go past the term of the deferment. You still have to pay the interest accumulated during the deferment period. To apply for a deferment, you will need to have your application approved.
