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I'm pretty sure there are many posts in regards to this topic and I have been reading and looking through many of them through the past couple of days. I'd appreciate any advice for my specific case
There is still a full year and a few months before the SOL is past and I was also handed a wage garnishment warning for my school loans. My parents stated that they would handle the school loan payments, which they haven't, and one of my parents opened up about 3-4 cards in my name as well. I realize that I did stick my head in the sand for quite some time trying to ignore everything hoping it would all go away but realistically that's not going to happen. I want to handle this situation right now if I can. I barely earn around $600 a month, $400 going to bills already so I don't know how I'd be able to pay them back. My boss gave me 30 hours a week as opposed to the 18 and I'm also seeking another part-time job to supplement if needed. I haven't finished school since I had to quit early to work and support the family. I'm considering filing ch.7 bankruptcy but I want to know what all my options are before I do anything I'd regret. I have about $12k in debt from student loans and another $6K in credit card debt.
I'm located in California and I was served a summons about a week ago from a collection agency. I understand that I have to act quickly as I have limited time to prepare an answer. I'm checking on whether the summons are valid or not with the court clerk. Assuming that they are, what can I do at this point in time?
Student loan debt cannot be discharged in bankruptcy.
True that. Plus you're going to have a real hard time getting $18,000 discharged in bankruptcy.
I realize you got screwed but the best thing you can do is whatever it takes to clean the mess up.
Are we talking about Federal student loans or private loans? If they are federal loans you should be able to get a hardship deferment or forbearance due to your lack of income which will put off the payments for awhile. Not sure what options you might have if they are private loans.
Your best bet with the cards is to try to settle. I assume you don't have any money right now; I'd start saving what you can, and when the collectors call tell them "I have $XX, will you take that as settlement?" Once you save enough to offer 50% or so they may bite. Just don't give them access to your bank account, make them send you a letter stating that they are accepting your offer as settlement, then send them a check via registered mail, return receipt requested.
As to the court summons, it doesn't sound like you have anything they can attach so a judgement isn't going to hurt you any. The judge may order wage garnishment, but with what you're making it won't amount to much. I'd call whoever is trying to take you to court and explain that to them, they choose not to pursue it.
In the meantime, you need to get that income up, either through a different job or a second job.
Thank you all for your replies. To answer some questions:
I just turned 25 and do not want to press charges as both of my parents have it hard as they already are. I know this sounds crazy not to press charges.. one of them is at least willing to help me make payments now if I can get them sorted out.
As for the federal loans not being discharged in bankruptcy, I am aware of that thank you The loans I have are federal school loans and I have asked for many deferments already. I was just wondering if it would be helpful to discharge the other debts and focus on just repaying the loan if possible. Or if bankruptcy is even a smart option at this point considering my debt isn't very high.
For the summons, should I let them just drop a judgement? I'm working on getting the forms filled up to at least make an attempt to settle if possible. I really don't have any money right now, $8 in the bank haha, but I want to repay something back if I can.
If your loans are Federal loans you should get on the Income Based Repayment plan. With your income the amount might even be zero. It doesn't make the loans go away, you will need to keep up with the payment (the payment adjusts according to your income) over the next 25 years and then the loans will be forgiven (that's generally how it works anyway). Income-Based Plan | Federal Student Aid
Get that set up ASAP and then start working on your credit cards. Get a roommate, work a weekend job, work a second job, mow lawns, shovel driveways, babysit, whatever you need to do. You're young and the hole you're in isn't too big yet but you obviously need to make some changes soon or you'll set yourself up for a lifetime of money issues.
I'm pretty sure there are many posts in regards to this topic and I have been reading and looking through many of them through the past couple of days. I'd appreciate any advice for my specific case
There is still a full year and a few months before the SOL is past and I was also handed a wage garnishment warning for my school loans. My parents stated that they would handle the school loan payments, which they haven't, and one of my parents opened up about 3-4 cards in my name as well. I realize that I did stick my head in the sand for quite some time trying to ignore everything hoping it would all go away but realistically that's not going to happen. I want to handle this situation right now if I can. I barely earn around $600 a month, $400 going to bills already so I don't know how I'd be able to pay them back. My boss gave me 30 hours a week as opposed to the 18 and I'm also seeking another part-time job to supplement if needed. I haven't finished school since I had to quit early to work and support the family. I'm considering filing ch.7 bankruptcy but I want to know what all my options are before I do anything I'd regret. I have about $12k in debt from student loans and another $6K in credit card debt.
I'm located in California and I was served a summons about a week ago from a collection agency. I understand that I have to act quickly as I have limited time to prepare an answer. I'm checking on whether the summons are valid or not with the court clerk. Assuming that they are, what can I do at this point in time?
Hi iHopefully--
I'm currently in law school and the number one thing anyone learns in the first-year civil procedure class is that isn't worth suing someone who doesn't have any money. That said, it would be wise to at least show up in court and prove to the collection guys (and the court) that you quite frankly can't afford to pay anything right now. Show them that you have $8 in the bank and are barely breaking even as it is. But that you're looking for that second job in an attempt to settle. Making a good faith attempt can go a long way, because both the court and the creditor realize that they can't squeeze blood out of a turnip - literally nothing the creditor does can make the money out of thin air.
Not going to court on the other hand - ignoring the summons altogether - can open up a big ole can of worms. Generally, the court just enters a default judgment against you - but I've heard of times where people are found in contempt, and before long they're up to their necks in some deep doo-doo.
Even if you go to court and get a judgment against you - the most they can do, legally speaking, is garnish your wages - which, depending on your state, is usually a percentage of 'disposable income' - anything typically above a Federal poverty guideline. At $600 a month, that's only $7,200 a year - and thus well below the line. I'm not up to date on my poverty guidelines, but for one person it's currently between $12,000 and $15,000 a year?
I'd still try to make an offer to settle with them - but I'd start much, much lower - maybe even as little as $500 towards $6,000 in credit card debt - again, everyone involved here knows you're flat broke. The collection guys should be lucky they're getting that much. Just get it settled, because it's much better on your credit report to have it as settled rather than written off.
And with regards to the Federal student loans, as covered before, they are non-dischargeable in bankruptcy. But I would join the income-based repayment plan, which only takes something like 15% of your disposable income - which in this case, again, appears to be zero. It also gets the Sallie Mae guys off you back. Hope all of this helps
Wow.. thank you so much for all the responses everyone. Still trying to find a stable 2nd job Doing all sorts of odd jobs aside from my part time job and selling off things to start saving up money for payments!
I verified that there is a case filed against me and have begun to prepare an answer/settlement payment plan already. As for the federal loan, I never knew that they had an income-based repayment plan and will definitely get that started ASAP. Again, thank you all for the advice given.
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