Learn The Best Course of Action to Deal With a Defaulted Student Loan
Defaulted Student Loan Facts
If you have a defaulted student loan, you need the facts to help get you back on track. If not, student loan debt can turn into a nightmare.
First and foremost, before we proceed, we need to put a stop to the nonsensical statements made by over zealous
debt collection agencies.
Some have been claiming those who defaulted will or can be arrested.
The truth is; no one is going to be arrested for non-payment of any student loan.
But you do have to understand the consequences and the solutions that are related to a defaulted student
The IRS and Defaulted Student Loans
The IRS can create a lot of problems in your life. Working in conjunction with the DOE Department of Education, the
IRS has the power to intercept your tax refund until you pay the full amount of your loan.
The far reach of the Department of Education can extend to your state tax refunds also. What’s worse is; they
can take these steps without prior notice to the defaulter.
Wages Garnishment and Defaulted Student Loans
The Department of Education can also garnish a substantial portion of your salary. The amount is around fifteen
percent. Most individuals will suffer when hit with such a reduction in pay. That’s why it’s always better to deal
with a defaulted student loan head on.
Other Consequences of Defaulted Student Loans
The guarantor may also sue the defaulter. He may charge extra money. Legal actions can be taken against the
defaulter. The court may ask him to pay back the entire sum immediately, which could result in a judgment being
filed against you. Usually at that point, you cannot ask for a grace period due to the fact that legal action has
already been taken.
The person with the defaulted student loan cannot apply for any other loans. The situation makes it virtually
impossible to obtain a home loan or a mortgage. There will be additional hassles while attempting to finance or
lease a car. Most banks will classify such a person as a higher risk and will most likely levy additional charges
due to the defaulted student loan.
The best course of action to deal with this matter is to seek what is commonly referred to as “Loan
Rehabilitation.” This is the process of recovering a loan that has gone into default and making the loan active
once again. Hence pulling you out of default status and stopping all of the collections actions and legal actions
taken against you.
To learn what you need to do to get a defaulted student loan back in good status, go to restore Defaulted Student Loan.
Brad Matheson is a professional Financial Consultant who specializes in helping businesses and individuals
resolve their debt issues. He believes that all debt problems can be solved with the right debt advice and aspires
to help Americans learn all of their debt options and exercise all of their rights. Says, Matheson, “A Defaulted Student Loan doesn’t have to hinder or
block your career aspirations or your dreams.”