Wondering what would happen
Posted by Infamous_Code_4078@reddit | studentloandefaulters | View on Reddit | 42 comments
Hey All! I have $100,000 in private student loans with a monthly payment of about $1000 I went to school for Film back in 2005 and nothing came of it, I wish my parents had actually had a talk with me about going to school for that type of career but here we are. Over the years the balance hasn't changed much and I have only been able to really afford the minimum. It has gone up a few times due to forbearance and deferments that were needed due to just life happening. I got married 10 years ago and we are both now in our mid 40's with the realization it will never be paid off. We also have a house payment, credit cards and a car payment and the only way to afford it is my husbands job. He works a manual labor job that is starting to take a toll on his body due to his age. What he makes he won't be able to for much longer so once he starts working less the money he makes will not be enough to pay them.
My question is if we end up not paying them what would they come after besides wage garnishment and my credit tanking. Honestly I don't care so much about that as his credit is still good and everything we take out is under his name due to one day we not pay them anymore. My name is not on the house, I only have one credit card under my name and the car is also not in my name. We live in Arizona which I know has laws about couples being together for a certain amount of time property belongs to both but I read that is if the house was bought after you were married which it was not, he got the home before we got married so I don't think they would go after that. I did co-sign on his truck which has now been paid off but I am not sure how that would be affected. Our other vehicle is only in his name but that was bought after we were married.
I have looked at maybe refinancing but it would only save us $200 a month, I thought that if I maybe let it go and let it go to collections that maybe the payment may be even less than that and we can settle on something way less but I don't know if they may try to sue which I would like to try to avoid.
Any suggestions would be helpful!!!
Ecstatic-Pop-3650@reddit
Well, since you're in Arizona, just a heads up that it's a community property state, which might make things a bit tricky... You really should chat with a lawyer in your area to understand your options better. Also, just curious, what school did you go to? Was it a legit one or one of those sketchy "private" places?
Infamous_Code_4078@reddit (OP)
I’ve spoken to two lawyers and thankfully the house wouldn’t be effected since it was purchased before we got married and they also mentioned they wouldn’t go after our car since there isn’t much equity in it :)
As far as the school I went to Full Sail
morbie5@reddit
What did the lawyers say about a scenario where if the house was bought after the marriage?
Infamous_Code_4078@reddit (OP)
For AZ then it would be considered an asset since we will have been both paying into it
morbie5@reddit
So do you think you are going to try default then?
Infamous_Code_4078@reddit (OP)
Not sure quite yet, it’s gonna determine partly on how much the federal is gonna want me to pay when I apply for a new payment plan and then it’s what we decide
morbie5@reddit
Good luck!
Infamous_Code_4078@reddit (OP)
Thanks! Did u already default?
morbie5@reddit
No, I don't have any student loans anymore. I paid them off
Infamous_Code_4078@reddit (OP)
Oh ok congrats!
morbie5@reddit
Thanks!
ComplexFlaky3587@reddit
Hey, you might wanna check out YREFY's services... Also, since you're in AZ, remember it's a community property state, so that could make things a bit tricky. I'd definitely recommend chatting with a lawyer in your area to get the best advice!
Suitable-Cat1499@reddit
Hey, I feel ya on that... I make 49K a year too and my hubby makes a bit more, but I don’t really know what’ll happen with your loans since you’re in a community property state like Arizona. Definitely think about talking to a lawyer to figure out your options, it could get a bit tricky…
morbie5@reddit
Well AZ is community property state so that complicates things. You would need to talk to a lawyer in your state to know for sure. I think in community property states they can garnish a spouse for debts taken during the marriage. But this debt was taken before the marriage so...
AZ also seems to have a generous homestead protection so that could help.
How much money do you make?
I'm leaning towards a strategic default in this situation if you don't have a cosigner but you need to talk to a lawyer. Do you have a cosigner?
How much do you think you have paid them up to now btw? And what are your interest rates?
Forsaken-Arrival7500@reddit
So, like, AZ is a community property state which can make things kinda complicated… You should really chat with a lawyer in your area to get the best advice. Also, I totally remember the Full Sail hype back in the day! A few people I knew went there and only one actually found work…
Infamous_Code_4078@reddit (OP)
I make 49K a year, my husband I’m not sure but I know he makes more than that. I do not have co-signer and it’s through Mohela. I did just speak with a lawyer literally not long after posting this and she said they would go after our house but can they really take it and kick us out and it’s not even close to being paid off. Also she said they just passed a law here we’re they have the option to start wage garnishments after being 30 days overdue which is crazy to me as that just seems too soon
AmazingCode9605@reddit
A lawyer told you this? You’re in Arizona right?
Infamous_Code_4078@reddit (OP)
They did and yes but I’ve spoken to a couple more lawyers and it’s not true
AmazingCode9605@reddit
Also do you mind sharing the lawyers info who shared this with you.
Infamous_Code_4078@reddit (OP)
To be honest I don’t remember since I’ve spoken to a few now just to get verification
Infamous_Code_4078@reddit (OP)
I would let u know if i knew
AmazingCode9605@reddit
It’s ok. I was about to report them AG Mayes
AmazingCode9605@reddit
I’m going to DM you. I know for a fact no such law has been passed and I would raise hell if I saw it coming.
rharrow@reddit
Look into YREFY’s services.
Infamous_Code_4078@reddit (OP)
Thanks for the suggestion but I already have and at first it seemed like a good move but then I looked into refinancing and they offered the same plan as Yrefy did except I wouldn’t have to default to do it. I also don’t understand how you end up defaulting and then they negotiate the balance to take it on but it’s the same amount I had been paying when it should be lower so for now if needed I will refinance and hope when the save plan ends for my federal loans the next plan I need to get on won’t ask for much otherwise I will be in trouble
If I ever end up defaulting on my private loans I’d look into them since my credit wouldn’t be any good anymore to try to refinance
rharrow@reddit
The difference is the interest rate is like 2-3% and you can actually have the loans paid off within 10 years.
What were your refinance terms? Was it under 5% interest for under 10 years?
If I didn’t have a co-signer I’d use YREFY bc I don’t care about my credit score, I save up and pay cash for everything now. Besides, your score bounces back in no time. I filed Chapter 7 bankruptcy after my divorce and my credit score was back up to 700 in less than two years.
Infamous_Code_4078@reddit (OP)
I looked into SoFi for refinancing and the interest was the same as what YRefy had offered same with the term of 20 years if I wanted to go less years it would cost us more for both which we can’t afford. The monthly payment was the same for both too and yeah no co-signer here nor do I care whether my credit drops
rharrow@reddit
Gotcha, makes sense! My loans total to ~$90k or so, at $1k/month (which is my current monthly minimum) I could have them paid off in under 10 years.
wandering_womb@reddit
Ugh, I remember the Full Sail hype in the early 2000s. I knew a few people that went to school there and only one ever worked in the industry and that’s a stretch since she worked for a local news station. Given your comments I think I would look into moving to another state to protect your spouse and his assets.
Infamous_Code_4078@reddit (OP)
I wish it was that easy, he’s been at the same job for years and his family is here so he wouldn’t be wanting to do that but I’m going to talk to a lawyer tomorrow and that’s definitely one of the things I plan on asking. A few people I knew got into the industry and I remember a teacher telling us in class that we didn’t even need a degree to work in the industry lol I should have taken the hint then
Irritated_Compassion@reddit
What school was the loan for? Was it a legit school or a predatory ‘private’ one like ITT Tech? In other words, is it from one of the schools found on the Exhibit C school list of the Sweet v Cardona lawsuit? (Note that lawsuit is for federal loans only, but the schools on Ex C are all known as predatory).
Who is the loan through?
I’m asking because if any of that applies, you may be able to file a discharge application with the lender, similar to Borrowers Defense.
Infamous_Code_4078@reddit (OP)
Also sorry the loan is through Mohela and I went to Full Sail University in FL
Infamous_Code_4078@reddit (OP)
Don’t you need proof for that? And my loans are private, not sure if that changes things
Infamous_Code_4078@reddit (OP)
Thanks I will do that :) when you went through the default did you go to court and deal with all that and didn’t they garnish your wages?
jerseywillow364@reddit
Unfortunately when I defaulted I had been laid off from my job and hadn't been able to find anything. So no, there was no court or wage garnishment. They typically want there money back outside of suing as that costs them more money. I'm still actively in strategic default because I believe I was defrauded by my school and my loans should be subject to discharge due to the holder rule.
As for evidence, you just need to think back to when you applied. Did they inflate graduation rates, potential income rates higher than they would ever be? Did they promise you a better education and opportunities than you received? Did they prey on you being first generation college student? Talk you into borrowing more than you needed? Use predatory enrollment tactics like saying your spot would be taken if you didnt apply soon? Lie about who would be teaching you and there educational experience?There's many ways these school scammed people into paying astronomical tuitions for subpar education.
Good luck!
Infamous_Code_4078@reddit (OP)
Thanks! Can anyone apply for the strategic default?
Infamous_Code_4078@reddit (OP)
Thank you, I most definitely will and what I meant by proof is to have individual proof showing how it’s effected you personally to see if something like that would even make you eligible. I had looked into the lawsuit that was against another school I went to and they wanted something to show you were misguided which unfortunately I didn’t have
jerseywillow364@reddit
There's tons of proof online. Join the borrower defense Facebook group, there might even be one for Full Sail. Those groups have incredible resources.
The other option is a strategic default. They will typically settle for lump sum payment or down-payment and installments. After a few months of not paying Navient my offers started coming in at 20%, 30%, 50% and 1.5 years in 65% off. If you can come up with a lump sum, and dont mind the credit taking a hit do that but first I'd research the misconduct application through them.
Irritated_Compassion@reddit
Oh, but there is so much proof out there. And if it’s owned by Navient (serviced by Mohela - they don’t own the loan, I promise you that), then Navient has a misconduct discharge program for scam schools.
I would highly encourage you to check out the Borrowers Defense subreddit- lots of evidence and how to find it there, as well as info on the misconduct discharge stuff for Navient. Lots of us (thousands of us) going through it too.
Gingerandthesea@reddit
Ahh yes the scammy for-profit college that has been busted for ripping people off. Full Sail is well known for this.
Look into filing a Misconduct Application if the loans are owned by Navient.
If you have federal loans the look into filing a borrower defense application.
https://www.ppsl.org/privateloans-iss
SuperSav85@reddit
Did you do the "Behind the scenes" tour before you applied?
They straight up lied to me with a promise of job placement & filling out the loan paperwork for my parents and I in a tent at the end of the tour.
If any of that sounds familiar you should look into a discharge. Just don't pay anyone to do it for you those are scams.
Infamous_Code_4078@reddit (OP)
I honestly don’t remember since it happened over 20 years ago, the only part I remember is going to an office and the guy talking to us about next steps which I also don’t remember everything that was said