If you have tried all the other methods of reducing your student debt, such as interest relief and loan reduction schemes, and you really are not coping then you may need to seek some sort of student loan debt settlement.
This is a very serious option and should not be undertaken lightly, however if you are getting very stressed and ill because of you debt and you know in your heart that there is no way of making payments and getting rid of this debt then you may have no choice but to pursue a student loan debt settlement.
Enquiries About Student Loan Debt Settlement
If you do enter into a student loan debt settlement it can be tempting to get the papers signed as quickly as possible, as this has suddenly become the light at the end of your tunnel and finally you can see an answer to the quagmire that has become your financial life, and you can look forward to sleeping worry free once more.
However before you get too hasty you need to make proper enquiries, student loan debt settlement is not a one off act that is suddenly all forgotten a moment later, this will affect your credit history and your ability to get any future credit such as finance to buy houses and cars, so it does require proper thought.
On your behalf a third party will approach the lender, whether you had a federal student loan or a private student loan and will begin negotiation on your behalf. The loan company is not going to just roll over, you borrowed money from them and they are naturally going to want it back, however they are obviously approached about student loan debt settlement from time to time.
In order to reach a student loan debt settlement agreement the person acting on your behalf will try and make suggestions such as a lower interest rates and ask that the loan is paid off on a longer term. This means that the loan can be recalculated and it may well be that these two factors combined give a new monthly payment that is more acceptable,
It is possible that your student loan debt settlement will result in your loan being discharged, but this is much rarer than making a new agreement, and rightly so – you borrowed the money, so must accept that you need to make serious and grown up attempts to pay it back.
If the student loan debt settlement is discharge, you will be probably declared bankrupt which has an even bigger negative impact on your credit rating and means that it will stay on your record for many years making new credit virtually impossible, certainly worth avoiding this option if at all possible.