This post originally appeared onReadyForZero.
There’s no declaring bankruptcy should you find yourself in over your head.
There’s no ignoring bills if you could’t make the payments.
There’sno getting rid of it.
But what about when you simply can’t make payments on your loan?
Namely,student loan default.
Borrowers can default on a loan for any number of reasons.
Some borrowers default because they’re financially unable to make payments.
Others default unknowingly on a debt they didn’t know that they carried.
What exactly does that mean?
Let’s take a look.
As soon as you miss your first student loan payment, you’re considereddelinquent.
This status can act a bit like a red flag to both you and the lender.
After270 days past due, a student loan is considered to be indefault.
At this point, your debt will be put into collections and payment will be required from collections agencies.
These will be tacked on to your initial balance of principal and interest.
This will be used to pay debt collections fees, interest, and then principal of your debt.
For more information on how this works, check out our post onwage garnishment.
Legal actions:If you continue to ignore your defaulted loan you may face even more serious legal repercussions.
The government can sue you at any time after your student loan has reached default status.
Talk to your lenderabout changing your repayment plan to one that makes sense with your financial circumstances.
They’re there to help guide you in your repayment and can answer any questions you might have.
These plans can lower your monthly bill to a number that may feel more manageable.
While it’s scary to receive calls from debt collectors it’s alsoempoweringto take charge.
Be the one to make the call, start the conversation, and begin exploring your options.
Go into the conversation prepped with your financial stats and account information.
Above all, remember, you’re not alone.
Image adapted fromNemanja Cosovicandvso(Shutterstock).
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