I’ve heard that student loans weren’t subject to negotiation?
There are two types of student loans, federal and private. Federal loans are backed by the federal government and lenders aren’t willing to negotiate balance reduction on these types of student loans. They have many remedies to collect from you including garnishment and keeping your federal tax returns. They are not dischargeable in bankruptcy.
Private student loans are different. They are made by banks and are subject to negotiation and balance relief. We believe that they are willing to take less than what they claim is owed because a fast nickel beats a slow dime. Like federal loans, they are typically not dischargeable in bankruptcy.
What if I have been sued or have a judgment?
This isn’t uncommon and you aren’t alone. We represent clients with and without lawsuits. We encourage anyone who has been sued to seek legal advice. The worst thing to do is ignore a lawsuit.
Can you shorten the term on my loan?
Student loans often have very long payback terms. We often see 20-year repayment plans that will stretch well into the student’s professional career.
Our typical client retires their student loans in 1 to 6 years. Negotiating a significant reduction in the principal balance is what makes this possible.
How much can I save in interest and fees?
Based on our experience, we can give you a good idea of what a student loan settlement process would look like. A free visit with a paralegal in our office can give you an idea of what we think we can save you.
How will it affect my credit?
Your debt/income ratio makes up 30% of your credit score, so one of the most effective ways to improve your credit score is by getting rid of your debt. It's hard to predict just how many credit score points you'll lose due to debt settlement, but if you are current on all your payments, including credit cards and medical debt, our experience is between 75 and 85 points. Keep in mind the goal of debt settlement is to get rid of some of your debt, particularly if you can't afford to pay all the balances in full. Temporarily sacrificing your credit score for the sake of getting out of debt is worth the time and effort. If you have a high credit score, but also have high debt, your credit score isn’t doing you any good because lenders will still not consider you for a new loan.
The decrease in your credit score is short-lived once the loans are negotiated and paid in full, thus allowing you the ability to responsibly manage your credit score in the future.
What if I am not approved for the new loan?
We want you to be successful, so if we don’t feel like you are a good fit, we will tell you. Within 30 days after receiving the documents we need from you, your documents will be reviewed and we will let you know if there are any concerns. Once your loans have been negotiated and we have final numbers, the underwriter will look over your paperwork again and do a final qualification. If you are still gainfully employed and there have not had any major changes in your life, then we have every reason to believe you will qualify for the new loan.