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

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

Posted

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!

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Posted

Hi there. Just wanted to let you know if you put your loans into forbearance they still accrue interest daily. At least with Sallie Mae they do. And may I say I'm speechless to the amount applied to the interest every time I pay.

David Lloyd Merrill

David Lloyd Merrill

Posted

Yes that is often true (although there are some (rare) types that do not. Count on being charged interest during any forbearance.

Posted

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 analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here. Please visit my web site: www.avanesianlaw.com for more information about my services.

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Posted

Since there is no such payment plan for private student loans what else is available to assist me.

Michael Avanesian

Michael Avanesian

Posted

If this is a private student loan, you should call bk attorneys in your area until one of them tells you they think they can discharge some types of student loans. Then go to that guy for a free or paid consult. Not all student debts are non-dischargeable. There are certain kinds of student loans that you can discharge, it all depends on your situation, the qualify of your attorney, and the rigor in which they oppose the discharge. Here is are two links to learn more: http://www.avvo.com/legal-answers/is-a-judgment-based-on-a-defaulted-private-student-1054647.html This second one is just code, so it's only good for an attorney: http://www.taxalmanac.org/index.php/Internal_Revenue_Code:Sec._221._Interest_on_education_loans

Posted

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.

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