I was what people would probably consider a disadvantaged student living close to the poverty income line when I first started college. Financial aid was critical for me to be able to attend college. My real debt started when financial aid officials informed me after the semester had started that I had a large balance in my account that financial aid could not cover. Without any advise I feel I made a terrible mistake, I put my tuition on a credit card. It happened around 10 years ago or more, so I don’t recall the exact amount, but it was in the thousands. In fact it may have been between $8,000-18,000.
As a working student I would usually pay something close to the minimum because it was all I could afford.
After I graduated I started a Masters program and the University advised me to take out more student loans. While a student I worked low paying internships and temp jobs to get by, meanwhile my credit card debt went up and down depending on my situation.
After I finall y finished with my graduate degree I spent a few months without a job and some working in more low paying temp jobs. During this time I kept deferring my student loans. Eventually I started working with nonprofit and government, always in public service earning little. Now my credit card debt is at about $20,000, and my student private loans with Sallie Mae are about $92,000, and my US Department of Education loans are at $156,000. That’s about a quarter of a million dollars in debt.
So I filed for Chapter 7 bankruptcy in July 2010, to at least do something about the unsecured debt so I can finally focus on the student loans. (By the way, I know about the debt forgiveness for public service, but the info for the Dept of Education says I have to be making minimum payments for 10 years.) At this point, I stopped making all my student loan and credit card payments and am waiting to hear back from the court to see if I was granted the discharge for my unsecured debts. I’m no t using a lawyer, so I have no one to ask about the process.
My question is, during these extreme circumstances is there anything I can do to negotiate the amounts I owe with my student loan lenders?
Also, is there a nonprofit organization I can trust that can help me and guide me? I ask because I have some distrust of lawyers and fear that their best interest is making money and not really helping me as cheaply as possible.
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