Can I get rid of Sallie Mae Private Student Loans that have been charged off?

Asked over 1 year ago - Bluffton, SC

I have 5 private student loans through Sallie Mae. I currently have only been able to afford to pay for 2 of them that equals to 100 dollars and current on that only. The other 3 have been charged off HICA charge off guarantor but is still reporting to credit bureaus with increased interest. I can not afford to pay the other 3 because I am paying 3 other private lenders, so 8 months ago I had to choose which one I let fall behind and it was the most expensive ones Sallie Mae. Since they have charged these off and given to a collection agency are they allowed to continue increasing interest while reporting it as charged off. I would really like to know what are my options, possible arbitration or anything. I live in South Carolina and need help with understanding my options.

Attorney answers (3)

  1. David Lloyd Merrill

    Pro

    Contributor Level 15

    3

    Lawyers agree

    Answered . No, not based upon the facts you present. "Charged off" is an accounting term that merely means the lender can no longer report the claim it has as an asset. That has nothing to do with their ability to collect the debt.

    There are extraordinary reasons for being able to discharge student loans, but none of those rare situations is evident in your description of your situation.

    Do everything you can to get current with them or ask for a forbearance (which can help your situation temporarily). Not paying them will only incur more interest and force you to deal with a worse situation later.

    Good luck!

  2. David Stone

    Contributor Level 6

    1

    Lawyer agrees

    Answered . I am an attorney in Hilton Head, SC and I do agree with the two other answers. These loans will not be erased in bankruptcy and I am not hearing that you qualify for forgiveness of the loans. However, you may want to look into chapter 13 bankruptcy for the purpose of debt restructuring with payments over a 5 year term depending on your assets, debts and income, or perhaps chapter 7 which may help to free up some of your income so as to allow for its reallocation by doing away with dischargeable debt. Contact me if you would like to explore this matter further.

  3. Michael Avanesian

    Pro

    Contributor Level 16

    2

    Lawyers agree

    Answered . These sound like straight up qualifying loans which won't get discharged under the facts you presented. I'd switch over to IBT = income based repayment. You only pay what you can afford based on last years tax returns and they won't mess with your credit that way.

    The above is general legal and business analysis. It is not "legal advise" but analysis, and different lawyers may... more

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