Question: I had a Guaranteed Student Loan for Tech School from 1987 – 89. Due to numerous unforseen problems, including getting laid off from my job, I defaulted on this loan. The defaulted loan eventually became a Judgement and is now in the hands of a collection agent, who is now contacting my current employer. I did at one time try to work out a payment arrangement with these people and was told I would have to pay at least $250 per month minimum, which I could not afford. I have since straightened out my financial difficulties, have a decent job, and would like to somehow fix this “blemish” before it becomes a bigger problem, but I still cannot afford a huge monthly payment. Any suggestions or advice would be appreciated.

Answer: Quoting here from Robin Leonard’s book (Nolo Press), “Take Control of Your Student Loan Debt,” which I think I reviewed on Amazon.com and/or Barnes & Noble (bn.com) at some point:

“[I]n most situations, you cannot consolidate loans if the holder of the loan has obtained a judgment against you or has a wage garnishment order on the loan. This … does not apply, however, if you seek to consolidate under the federal direct loan consolidation program.” (Page 5/18.)

The Dept. of Education has an Income Contingent Repayment option that apparently allows you to make payments according to your level of income. See their website for information. Another quote:

“You are eligible for a reasonable and affordable repayment plan even if the Department of Education has sued you and obtained a court judgment. … The guarantee or collection agency collecting your loan decides what is reasonable and affordable. The agency must consider your disposable income … and your necessary expenses. … [T]he law is clear that you are obligated to pay only what is reasonable and affordable — and not a penny more.” (Pages 8/6-7.) contact SALLY MAE i think on their website there is infor on them mabe buying the loan, or refinancing it through them….not sure if it is an avenue you can do, but maybe its a start.

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