Federal Student Loan Default Stop Garnishment With A Settlement
Stop Student Loan Garnishment with Settlements!
Are you currently debating whether or not you should pay off your federal student loans? What’s the matter? Collectors demanding too much or won’t budge on letting you pay anything shy of the ENTIRE balance? Maybe you don’t have all your money put together yet, or the collectors are giving you a deadline you can’t meet then threatening garnishment if you can’t meet the deadline? Whatever the case, everyone is entitled to pay off their loans with a settlement! As mentioned in some of my other articles, there are 3 settlement options available to you right off the bat! I’ll briefly explain the difference to you below.
Obviously the purpose of a settlement is so you can get your defaulted federal student loans paid off, without having to pay the entire thing. So basically, it’s a partial pay-off. As mentioned everywhere there are 3 basic settlement options available to you as soon as your federal student loans fall into default.
Curious about the PROS and CONS of each option?
Option #1 Principle and Interest
In my opinion there is absolutely NO BENEFIT going with this option. As a matter of fact, I think this option is ridiculously stupid and it’s only available for collectors to take advantage of people that are unaware of their options to have them pay MORE than what they really need to pay!
Option #2 Principle and 50% interest
This option for settlement works especially well for individuals who racked up a great deal of interest. Regardless of how much you owe in interest, this option will cut your interest in half. Basically meaning if you racked up 10 years worth of interest, this option will allow you to pay-off your loan(s) by paying back your principle and 5 years worth of interest.
Option #3 90% of Principle and Interest
This last option allows you to pay back 90% of your loan’s combined principle and interest otherwise known as a 10% discount. This option works especially well for individuals who don’t owe a significant amount of interest. For example if have a defaulted federal student loan and you owed a $25,000 principle plus $2,000 in interest. That gives you a combined principle and interest of $27,000 ($25,000+$2,000). Now take 10% off of $27,000 and that gives you a settlement pay-off in the amount of $24,300, which is $700 LESS than the principle!
COMMON QUESTIONS ASKED ABOUT SETTLEMENTS
What is a forbidden compromise?
What documents will I need to pay the minimum amount?
My Tax return got seized, can I use that for the settlement?
Can my wage garnishment payments be used for a settlement?