If you are a college graduate, you can only feel cheated. Did you study hard, who received the diploma, and now faces an unsustainable labor market. To obtain an education, it is likely that a considerable debt accumulated in the form of student loans. Chances are, if your loans come from the U.S. Department of Education, it is time to start making payments.
But what happens when you simply do not have the money and can not make loan payments? If you do anotherThus, the loan eventually defaulted. When this occurs, a debt collector may be called. This is because the Department of Education contracts for debt collection agencies debt collection of 18. Unfortunately, the consequences of not paying a student loan and pay the consequences of other types of consumer debt - your bank account or credit card bill, doctors - are very different. Here are fiveExamples:
Bankruptcy - Most consumer debt is discharged in a bankruptcy proceeding to Chapter 7. In essence, bankruptcy clean slate - with few exceptions. Student loans are one such exception. In other words, even if you declare bankruptcy, you still owe your student loan debt.
Taking advantage of government money - to the regular consumer debt, a debt collector can not go after things like social security income or tax refunds. Withstudent loans, however, your tax refund and government benefits are fair game. If you're failing, you can bet you never received the refund check.
Wage fixing - run of the mill debt, it is difficult for a collector to garnish your wages. To this end, a collection agency must have debt to court and obtain a ruling against him. Then they have to enforce the ruling. With student loans defaultedHowever, the Ministry of Education to force your employer to withhold up to 15 percent of what determines that "disposable wages.
The costs of the collection - the consumer debt, you can not afford the cost of collecting y. Student with nonperforming loans, however cost of collection (approximately 25%), ie the insert in your excellent , the balance of interests, taxes. To make matters worse, made before any payment will pay the taxmanpayment.
Statute of Limitations - Each state has a law defining the statute of limitations, after which it is no longer a debt can be executed. In other words, once the prescription is high, a debt collector can not take to court and obtain a ruling against him. The same does not apply to student loans not repaid. Under federal law, there is no requirement for student loans - and the federal law prevails over state law.
Although there are severalsignificant differences between student loans and regular consumer debt, one thing remains the same. Debt collectors must comply with the Federal Fair Debt Collection Practices If they violate the FDCPA (that is harassing, threatening or intimidating to you, example) you can take to court. If the court finds to have violated the law, you could receive up to $ 1,000 in damages, plus attorney fees and courtcosts.
While loans may be daunting, you are entitled under the law. It is important to understand and exercise those rights, and consult with a lawyer if a debt collector violates the FDCPA fair.
