CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Behind or In Default on Your Student Loan? Here’s What You Should Know

student loan defaultStudent Loan Default

If you’ve fallen behind on student loan payments or your student loans are in default, you aren’t alone. There is more than $1.6 trillion in outstanding student loan debt. Financial experts say that up to 40 percent of people with student loans could be in default in the next three years. The pandemic and all of its fallout have made student loan debt even more of a crisis.

What should you do if you’re in default or you’ve fallen behind on your student loans?

Defaulting on a debt, any debt, means you fail to pay that debt at the time it is due. Not paying on the due date a single time does not automatically mean debt is in default. The time a default happens varies based on the creditor and the borrower. Some default after missing one payment, while others require several missed payments to trigger a default. In the case of federal student loans, default occurs when you miss a payment due date by just one day.

The important thing to recognize is that if you have fallen behind on student loan payments, whether it’s gone as far as defaulting or not, is that help is available. There is no reason to live with stress about your student loan debt or allow unaffordable debt to ruin your credit. Here’s what you can do:

Bring Your Student Loan Current

The best way to avoid problems with the default of your student loan is to bring the payments up to date. Of course, this is easier said than done if you are struggling financially. If you missed a payment because you forgot the due date or for any other reason any you have the financial ability to make the payment, do so as soon as possible. Setting up an automatic draft payment that doesn’t require you to manually make a payment might be the best way to avoid accidental default.

Consider Deferment or Forbearance

When you fall behind on your student loan payments by 90 days or more, your delinquency is reported to the three major credit bureaus. This hurts your credit.

However, despite falling behind, you have options. For many people, deferment or forbearance is the best way to avoid damage to your credit when you cannot afford student loan payments. Additionally, federal student loans do not accumulate interest while in deferment (they do in forbearance).

Make sure you understand the terms of a deferment or forbearance before agreeing to it, but this is an option for many people who have the temporary inability to meet their loan payment obligations.

Consolidate Multiple Loans

You could be eligible to consolidate multiple student loans into a single payment. This might result in owing less than you do on two or more loans. Doing so could lengthen the term of the loan, but make it more affordable from month-to-month. Some consolidated loan payments are even income-driven, which means what you pay each month is based on how much you earn.

You can learn more about student loan consolidation here.

Refinance Your Loans

Refinance is an option if you have private student loans. You might be able to consolidate private loans. You can also negotiate a lower interest rate or extend the length of repayment time and reduce your monthly payments. Keep in mind, your credit must be at least average or better to refinance. If you anticipate financial problems in the near future, it’s important to act quickly to refinance before those problems affect your credit score.

You might also be able to negotiate different terms or alter your payment on federal student loans. It never hurts to speak to your loan provider about your circumstances and explore your options.

File for Bankruptcy

If your financial situation is dire or headed that way, bankruptcy might be the best option. Student loans are not always eligible to be included in a bankruptcy. However, if you are struggling to afford student loan payments because of other debts, filing for bankruptcy frees up funds to put toward your student loan payments.

If you would like to know more about how bankruptcy can help you manage student loan debt or you are ready to schedule a consultation with an experienced bankruptcy attorney, contact the Law Office of Robert M. Geller at 813-254-5696 to learn more.

Archive

Tampa Bankruptcy Law Blog

How Will Filing for Bankruptcy Affect My Credit?

Will Bankruptcy Affect My Credit? Not paying your bills affects your credit negatively. And yet problems with credit are one...
Read More

Behind or In Default on Your Student Loan? Here’s What You Should Know

Student Loan Default If you’ve fallen behind on student loan payments or your student loans are in default, you aren’t...
Read More

Will Bankrutcy Affect My Job? Learn How Filing Affects You in the Workplace

Will Bankruptcy Affect My Job? Filing for bankruptcy raises many considerations. One of the most important is whether or not...
Read More

Can Bankruptcy Help Me If I’m Behind on Child Support?

Bankruptcy and Child Support Bankruptcy can help you with a lot of things. It can help you stop calls from...
Read More

Can You File for Bankruptcy When You’re Unemployed?

Bankruptcy and Unemployment Being in debt is bad enough, but if you’ve lost your job recently or accumulated debt because...
Read More

Bankruptcy and Eviction History

Eviction With the rate of evictions on the rise in recent months and the expectations that eviction numbers will grow,...
Read More

What to Expect Once You’ve Decided to File Bankruptcy from Home

File Bankruptcy from Home There are a few things that happen when you file bankruptcy from home. An automatic stay...
Read More

Will Filing for Bankruptcy Affect My Job Search? What You Need to Know about Unemployment and Bankruptcy

Unemployment and Bankruptcy Searching for a job when you are faced with a dire financial situation is difficult. If you’ve...
Read More

Will I Need to Go to Court If I File for Bankruptcy?

File for Bankruptcy from Home One of the most intimidating aspects of filing for bankruptcy is meeting in person with...
Read More

COVID-19 and Debt – 5 Ways the Pandemic is Leading More People to Bankruptcy

COVID-19 Debt If you’re considering bankruptcy you aren’t alone. The last few months of 2020 have brought a great deal...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

NACBA Logo comodo avvo1 avvo2 avvo3 LEA BBB Logo RG Seal

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions