Student Loan Default

[KMartt]

Hi all,

I'm 24 years old with student loan debt. I've got $20,000 worth of loans consolidated and another $17,000 of private loans from Sallie Mae that have gone into default as of July 31st. The debt collector has offered me a settlement of $9,600 but at the moment I cannot pay this. I have finally landed my first professional job where I'll be making $48,000 annually. However, I cannot pay the $9,600 at the moment and by the time I can save up that amount working it will be too late. My credit score is so bad from missing all of my payments that obtaining a line of credit to pay off the defaulted loan is next to impossible. I am trying to gather all of my options and have considered filling chapter 13 bankruptcy. If anyone could give me some advice on the situation I would greatly appreciate it.

Thank you,
Kyle

[LadyInTheRed]

There aren't a lot of options with private student loans. I would try to get them to accept a payment plan that is affordable for you. If that doesn't work, then Chap 13 is the way to force them into a repayment plan. You could save as much as you can and hope you save enough to offer a meaningful settlement before they sue. In the meantime, consult with a couple of BK attorneys so you can be prepared to file if they do sue.