Borrowers of student loans fail to
understand the consequences of not repaying their loans within the stipulated
time period. There are different types of federal student loans that are
offered and prominent ones include PLUS Loans, Direct Subsidized and
Unsubsidized Loans, and Direct Consolidation Loans.
Unless you pay off the loan, you must
be prepared to face serious consequences because there are many ways by which
the loan can be recovered from you. In this write-up, the topic has been
discussed as under:
be prepared to face serious consequences because there are many ways by which
the loan can be recovered from you. In this write-up, the topic has been
discussed as under:
- Steps by federal government for loan recovery
- What are the lawsuits for loan recovery
- Impact of Collection Charges
Steps by federal government for loan recovery
Actions that can be taken by the
federal government for recovery of loan include the following steps-
federal government for recovery of loan include the following steps-
- The US Department of Education can
garnish your income as much as 15% of it from the disposable pay of the debtor
without having to produce a court order. Aside from this, it can also prevent
your professional or occupational license from being renewed.
- The US Treasury-
- Has
the power to stop state and federal income tax refunds that you are entitled to
compensate for the nonpayment of the loan.
- It
also has the power to intercept benefits from Social Security for disability
and retirement as a means to make up for the loan that is delinquent.
- It
can stop proceeds from state lottery winning
- As a debtor you may not be eligible
for VA and FHA mortgages
- You will not be able to avail further
student financial aid in any form
- Most importantly, the delinquencies
will be reported to the credit bureaus, which may cause your credit report and
credit score to get impacted adversely. Since the credit report will show the
negative aspects, you may not be able to get proper employment, an apartment,
or rented premises of your choice.
What are the lawsuits for loan recovery?
If you have fallen behind on
payments, the federal government can file lawsuit against defaulted debtors and
seize their retirement accounts, brokerage accounts, and also bank accounts as
a measure for not paying up the student loan amount on time.
payments, the federal government can file lawsuit against defaulted debtors and
seize their retirement accounts, brokerage accounts, and also bank accounts as
a measure for not paying up the student loan amount on time.
If your outstanding student loan
amount exceeds USD$45,000 and you have fallen behind on the payment for more
than 4 years, you are liable to be sued by the federal government.
amount exceeds USD$45,000 and you have fallen behind on the payment for more
than 4 years, you are liable to be sued by the federal government.
On the other hand if the outstanding
loan amount is lower than USD$45000, you may be sued by private attorneys that
are hired especially to deal with such cases on behalf of the federal
government.
loan amount is lower than USD$45000, you may be sued by private attorneys that
are hired especially to deal with such cases on behalf of the federal
government.
Impact of Collection Charges
The debtors that have defaulted on
the student loans are also responsible for paying for the collection charges. As
a rule, 20% of every loan payment on a delinquent student loan account will be
taken away (deducted) as collection charges.
the student loans are also responsible for paying for the collection charges. As
a rule, 20% of every loan payment on a delinquent student loan account will be
taken away (deducted) as collection charges.
The addition of the collection
charges to the already existing debt burden has been seen to restrict the
progress of the repayment of the delinquent loan accounts. For instance, if you
could have paid off the loan within a period of let us say, 12 years will
eventually take around 14 to 16 years of the collection charges are added on to
the debt account.
charges to the already existing debt burden has been seen to restrict the
progress of the repayment of the delinquent loan accounts. For instance, if you
could have paid off the loan within a period of let us say, 12 years will
eventually take around 14 to 16 years of the collection charges are added on to
the debt account.
However,
the interest amount will accrue over a period of time when there is nonpayment
of the loan amount. In order to avoid these additional charges and pay more
than you actually deserve to pay, it is best to prevent the loan account from
being delinquent or default on the monthly payments.
the interest amount will accrue over a period of time when there is nonpayment
of the loan amount. In order to avoid these additional charges and pay more
than you actually deserve to pay, it is best to prevent the loan account from
being delinquent or default on the monthly payments.
There are many advantages of finding one that can help you go about getting this type of loan which is a tenant loan. Always try to get information and be sure of what you are doing. Visit the website to get a clear picture of small cash loans.
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