When you ask for a student loan settlement, most often you must prove that you cannot afford the loans in the future, such as through alternative payment plans. To make your case, gather the following evidence: Health records. This includes a list of all your current and past doctors and hospitals. Have the names and addresses of your patients documented? They should also show which doctor’s office as their usual source of care.
Proof of income. Your lender will most likely require proof of income when qualifying for a student loan settlement. Lenders are not as trusting of applicants who have just graduated from college because they may not have a steady job to rely on. A lump-sum payment makes it easier for the lender to see that you will be able to pay off the debt in the long run. Ask your lender if this option is available.
Will borrowers lose their homes if they don’t settle their student loan debts? This is a risk that many borrowers don’t want to take. However, a loan discharge can protect the homeowner in many ways. Borrowers who successfully complete a settlement are not risking losing their homes, but they will not be allowed to use the equity in their homes to pay off their debt. If they do qualify for a discharge, they will only be able to use the equity in their home to settle their debts, not to fund other homeowners.
Private student loan debt settlement
Are there benefits to using a federal loan rehabilitation program? Yes, there are. The Department of Education offers certain benefits to students who qualify. These benefits include: reduced interest rates, subsidized and unsubsidized student loan debt, Federal subsidized loan debt forgiveness and student loan debt counseling. In addition, borrowers can defer their payments while they work at receiving financial assistance.
How do private student loan debt settlement programs differ from federal ones? First, a private student loan settlement will not prevent borrowers from filing a bankruptcy claim. As mentioned above, borrowers who qualify for a federal bankruptcy resolution cannot use their home equity to repay their unsecured loans. This is why it is important to thoroughly discuss your options with your lender.
What do I need to do to ensure that my student loan settlement may go through? First, you must always be completely honest with your lender. If you lie, your lender may find out, and you could lose your home. Second, your lender will need verifiable proof that your income has been reduced enough to make paying your unsecured obligations impossible. You can obtain verification from the Internal Revenue Service, which will provide an Individual Eligibility Certificate. You can also show the lender a letter from your employer that states that you have not been able to make all of your payment obligations because of a loss of income.
Federal student loan settlement
How are student loan settlement options handled by guaranty agencies? Student guaranty agencies are third parties that guarantee payment if the borrower does not pay his or her student loans. In most cases, the agency will charge a portion of the outstanding amount owed to the Department of Education. Once your loan is enrolled in the Direct Loan Consolidation Loan Program, your guaranty agencies will be paid by the Department of Education directly. If you have multiple student loan debts, your guaranty agencies may negotiate additional settlements with your lenders on your behalf.
If you do decide that your lender will agree to accept less than what you actually owe, there are other options available. If your lender will accept less than your full amount owed, contact the Office of the Comptroller of the Currency. The OCC works to regulate the payment of delinquent fees and penalties on college loans. In most cases, the Comptroller’s Office will file suit against the school that allows its students to accept less than what they are legally obligated to pay. If you are unsure whether or not your school can legally reduce your student loan payments, contact the Comptroller’s Office for more information.