$114k with Earnest - Should I default?

Posted by ThrowRA027392@reddit | studentloandefaulters | View on Reddit | 15 comments

Hello,

I had a private student loan with Sallie Mae at 18% interest. I refinanced all $114k with Earnest in 2024 at 8%. Payments with earnest have been around $1,200 which I’ve been making on-time. I’ve paid around $10,000 so far and I’m still at 0% paid off. I had a baby in 2024 and want to send him to daycare but I can’t afford it because any money I have left just goes to Earnest. Im not putting any money into retirement and I have no savings because I can’t afford to contribute. I have no disposable income and I can’t keep living this way. I’m completely exhausted seeing that payment come out and knowing I can’t even afford to send my son to daycare.

1) Should I default? Should I make tiny payments to stay delinquent but not default?

2) I no longer have a co-signer. I made sure to be refinanced on my own as to not involve anyone else in my own mistakes. Can they go after my husband’s income?

3) If I do go delinquent but don’t default, are they likely to still offer a settlement or will they just hound me and add up interest?

4) Does anyone have experience dealing with Earnest through default? Did they sue? Did you settle?

I have no idea what to do. If they garnish my wages, I’d be paying significantly less than making the monthly loan payment. I honestly don’t care about the repercussions to my credit, it will eventually recover…What would YOU do if you were me?

I live in Indiana.

TIA

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wolfgang9996@reddit

I chose to stop paying Earnest about 3 months ago after my son was born. About $30k.

So far...phone calls. Emails. I just block the number. I haven't even logged into my account since.

If you do this, do it right. Open some credit cards and max up the credit amounts ahead of time so it mimimizes the impact of your credit report. If it's multiple accounts, consolidate into one first so it's just one delinquent account (i made the mistake of keeping mine at 2).

Whatever you do, just don't fear them. You are taking a gamble either way. Personally I'd just default and be done with it. If they sue I would guess you'd still owe less than paying that sucker off in full...lol that's an extreme amount of money. Like truly, there is no debtors prison in this country, and do you know how hard it is to get a wage garnishment in this country? Or just switch jobs and make them do it all over again. Make it hard for them. And you don't have to worry about that until they get a judgement, and if they do, they'd probably just want a money settlement.

Take your house?? LOL no that would not happen. Worst case is a lien and I HIGHLY doubt that would ever fly in court with even the schlockiest lawyer.

All these people who say never default...are either bots, prob work for a bank themselves.

If this country were fair we'd have the ability to go bankrupt on these loans. And the fact that there aren't bankruptcy laws this is perfectly a fair move on our part. The bank lent this money as a business decision, not because of the goodness of it's heart. Just make a business decision right back :).

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arixsafariii@reddit

how's this going for you? I just found out I have been paying interest only for 2 years to "catch up" but they can't tell me how long I will have to do this, or how much interest should be accumulating each month, but that my minimum payment is the interest due each month. How TF does that make sense? How am I supposed to ever bring the loan down if I am only ever allowed to just pay interest, that continues to accumulate?! I'm so sick of dealing with these lenders. I just want to stop paying them. It's insane.

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HAMBoneConnection@reddit

Hell yeah brother love it. That’s how I’ve been playing it. While it is stressful and I do get concerned about what legal changes might happen in the future that could screw me a bit more with all this - fuck these usury banker scumlords charging 18% interest on private student loans to fuck over the middle class that doesn’t get enough aid.

Just another way they keep the classes in place.

Kind_Cow_6964@reddit

I did. I also rent and own nothing. I’m in a similar situation but I only make 33k a year take home. Couldn’t afford it so I stopped. It’s been sold off to allied interstate which is the…4th debt collector.

YOLO1633@reddit

So now what is happening? Are you trying to settle it?

Hahahaha no. I have no money. No savings. I live month to month. Similar story. Was originally Sallie Mae, but they wanted $1800 a month. So I refinanced with navient. I paid $1000 a month for about a year until I moved in on my own and I simply can’t afford that now.

newregrets@reddit

I’m going through a similar situation currently. Do you have any updates?

FloraAL66@reddit

Do you mind telling us how many payments you made to Sallie Mae before being able to refinance & release your co-signor?

Huge-Pineapple5104@reddit

The general answer is no, you should never default on a loan. However, unusual circumstances (such as massive student loans) can, at times, make it a lesser evil. You need to make the decision for yourself, but keep in mind that defaulting has serious and long-lasting consequences. Then again, so does a $1200/mo obligation.
Indiana is not a community property state (the two community property states that I can think of off the top of my head are Wisconsin and Texas) so they can't go after your husband. That said, they can still take everything in a joint bank account, so make sure you don't jointly own anything. If you guys own a house together, you should be protected by tenancy by the entirety - meaning (in part) that the house can't be sold off to pay the debts of one spouse. As always, schedule a consultation with an attorney in your state who deals in these matters to be sure.
I can't answer this question beyond generalities. They'll probably hound you and, if you don't respond and don't pay, will eventually sue. They might offer a lump sum settlement and they might not. They're not obligated to do so.
I have no experience with that company.

There used to be a forum called 'debtorboards' that had some interesting strategies and tutorials. There was one stickied post called "making yourself judgment proof" that might still be floating around somewhere on the web. Judgments last for 20 years in Indiana, which is a long, long time to have that over your head.

Aldierx@reddit

In Texas and WI does that mean if you have large unpaid student loan debt you shouldn't purchase a home with an sig other as it would be in risk?

Usukidoll@reddit

If I remember correctly, let's say a couple lives in a community property state (there's 9 btw) and the father cosigns a private student loanfor their adult child to go to college. The father and adult child are responsible for the student loan, but in the event the father passes, the debt gets transferred to the surviving spouse even though she didn't sign anything. Sucks I know.

Temperature-Material@reddit

Just as an FYI. You’re in default if you don’t pay the full amount due each month. Paying a little bit each month isn’t any different —- unless they agree to that payment plan.

Just default. Continuing to pay a small amount only extends the statute of limitations.

ThrowRA027392@reddit (OP)

That’s good to know, thank you! Someone on another subreddit recommended to just pay $4/month to not default but I guess that is debunked!

Equivalent-Watch9744@reddit

You do that for federal loans not private.

peri_5xg@reddit

If I didn’t care about my credit, I’d default. But I would think long and hard about the long-term repercussions of that and what that means.