I have a student loan that is in default and they want to settle for a lump sum. Only i don’t have the money to do so. If I don’t come up with the money they are going to take me to court to try and collect. Is there anywhere to get money to pay my lump sum to avoid going to court and them possibly taking my dads house to get their money.
Where can I get the money? Is there a program to help me with this?”
There are no programs I am aware of that will help you fund a settlement on your student loan.
With missed payments comes a tarnished credit profile. This can make qualifying for a loan in order fund the settlement next to impossible.
When working with consumers over the years in identifying funding sources to take advantage of fair settlement offers, I often suggest:
- What items around you can be sold in order to raise cash?
- Can you borrow (not cash out) against a retirement plan (not always a good option depending on the circumstances)?
- Do you have a friend or family member who is financially able to loan you the needed funds on a short term basis?
Sometimes an account can be settled with terms as opposed to a lump sum. Check into this with the lender/collector if you are unable to raise the cash for one lump sum payment.
You mention your concern about being sued. Were you told you would be sued? Have you already been served a summons/complaint?
Your reference to the taking of your dad’s house suggests your father co-signed for the loan. If sued, and were your father included in the suit, and were there a judgment entered against him, a lien could be placed against the home. It is rare that the judgment and lien would result in the forced liquidation of the home in order to satisfy the judgment debt. Having said that, the bigger concern would be wage garnishment or a bank account levy in order to collect on the judgment.
Can you provide more detail in the comment section below; to include:
Who is the lender?
How long has the loan has gone unpaid?
Who is contacting you right now in an effort to collect?
What was the last written notice you received and from whom?
Has the loan been deferred or in forbearance in the past?
When and who stated they would sue and take your dads home?
What is your current income picture like?
Are you working?
Are their realistic prospects for a better income in the near future?
What would those prospects be?
Can your loan qualify for an income based repayment plan (IBR)?
Can you come up with enough money to bring the loan current if your loan qualifies for an IBR plan?
Answers to these questions would help to better identify your best next step.
Michael Bovee has worked with financially challenged consumers for the past 17 years and is a recognized expert in his field. Michael founded Consumer Recovery Network (CRN) in 2006. CRN offers debt settlement services and educational resources nationwide. He has served as its president since 2006.
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