It looks like I cannot stop paying my credit card because the consolidation company has my checking account nubmer and withdrawing the payment online. If I stop it what shall I do when they harrase me for payment? and now I am wondering how long can a consolidated student loan be on deferrment? Do you think those lenders will see any use to harass debtors if the economy keep getting bad? I hope to hear from you again and thank you for all the information.
This question comes from newsletter subscriber Jeanie.
If a debt consolidation company is hitting your credit card each month then I have some real concerns. Who is this company and what kind of consolidation plan are you on?
Changing the payment method is one issue but it seems the bigger issue is if you can afford the payment at all and if you can’t then what are we going to do about the remaining debt.
There is no doubt that student loan lenders will chase borrowers regardless of the economy. The reason they will is because the rules allow them to easily do it. Between wages being easily garnished and tax returns being intercepted, the power to collect is only second to that given to the IRS.
If you have government backed student loans and you are struggling to make a payment then you should look into the Income Based Repayment Program or IBR. This will give you a payment based on your income.
But leaving the loans in deferment is not helpful. Interest will continue to be charged and the balances will grow. It might be better to tackle the other debt you have with bankruptcy and make room for the student loan payments.
Please post your responses and follow-up messages to me on this in the comments section below.