What If You Default
You should try to avoid defaulting on your student loans. A default will negatively impact your credit score and your ability to obtain credit in the future. But if you are unable to avoid default, you may have options to help repair your credit and get you back on track. You can consider contacting your servicer to discuss your options and ask them to work with you toward a sensible solution.
While each person’s particular situation is different, below you will find some general information regarding default and your post-default options:
Debt Relief Through Bankruptcy
Theres little point in entering a debt settlement or debt management plan if youre not going to be able to pay as agreed. We recommend talking with a bankruptcy attorney first, before you pursue any debt relief strategy. Initial consultations are often free, and if you dont qualify, you can move on to other options.
The most common form of bankruptcy, Chapter 7 liquidation, can erase most credit card debt, unsecured personal loans and medical debt. It can be done in three or four months if you qualify. What you should know:
Also, not everyone with overwhelming debt qualifies. If your income is above the median for your state and family size, or you have a home you want to save from foreclosure, you may need to file for Chapter 13 bankruptcy.
Chapter 13 is a three- or five-year court-approved repayment plan, based on your income and debts. If you are able to stick with the plan for its full term, the remaining unsecured debt is discharged. It will take longer than a Chapter 7 but if you are able to keep up with payments , you will get to keep your property. A Chapter 13 bankruptcy stays on your credit report for seven years from the filing date.
How To Verify That A Debt Relief Company Is Legitimate
Unfortunately, plenty of bad actors in the debt relief industry are looking to take advantage of people with credit-related difficulties. Warning signs that you are dealing with a scammer include:
- No American Fair Credit Council accreditation
- A poor Better Business Bureau rating
- 100% credit settlement guarantees
- Unrealistic guarantees that they will stop collection attempts by creditors
- Guarantees of settling debts within unrealistic periods
All the companies we included in this review guide are legitimate, and have excellent track records as debt relief providers. When evaluating other companies, be on the lookout for the above warning signs, and dont believe extraordinary claims.
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Government Debt Relief For Mortgages
One of the most popular debt relief programs for mortgages was the Making Home Affordable program. This included various foreclosure alternatives, including:
HARP Mortgage – The HARP mortgage allowed underwater borrowers who lost equity in the Great Recession to refinance into lower interest rates and affordable payments. The HARP program helped over 3.4 million borrowers. The HARP program expired at the end of 2018. Both Fannie Mae and Freddie Mac replaced HARP with special high loan to value refinance programs.
HAMP Modification – The HAMP modification expired but set the way for lenders to renegotiate government-backed loans into affordable payments. With the end of the program, lenders are expected to pick up the slack and offer their own modification programs.
Financial Assistance For Education
While most higher education financial aid programs are open to anyone based on academic qualifications and financial need, a number of grants are earmarked for single mothers and fathers.
One of the best-known programs is Raise the Nation, a scholarship fund from the Raise the Nation Foundation. Another scholarship, the Capture the Dream fund, is available to single parents in the San Francisco Bay area in northern California. Soroptimist, an organization that supports single mothers, offers scholarships though its Live Your Dream, a program that provide $2 million in grants to 1,500 women a year to advance their educations.
Finding scholarships can take time. Some are available to single parents wishing to pursue a degree, others help children of single parents hoping to attend college. Many help both.
Pell Grants are a major source of higher education fund that the federal government provides to low- and moderate-income families based on need. In the 2021-2022 academic year, the maximum grant is 6,495 and the minimum is $650. Students can apply for Pell Grants and other federal financial aid using the Free Application for Federal Student Aid form, which can be obtained through any college financial aid office.
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San Diego Region Support
The County of San Diego provides a Coronavirus Disease 2019 webpage with sections on Evaluating COVID-19 Information, Public Health Misinformation Panel, health orders, vaccine sites, testing sites, COVID-19 transmission dashboards, mask guidance, suggested signage, and safe reopening guidance. To visit that page, please click the button below:
How The World Bank Is Helping
- In 2018, global debt reached a record high of about 230 percent of global GDP in 2018 and total Emerging Market Developing Economy debt reached an all-time high of almost 170 percent of GDP, an increase of 54 percentage points of GDP since 2010.
- Non-concessional debt on average accounted for 55 percent of the debt of low-income countries in 2016, the latest year for which data are available.
- 50 percent of IDA countries are at high risk of debt distress or already in debt distress.
- Countries at high or moderate risk of debt distress are disproportionately Fragile and Conflict-affected States, commodity-dependent countries, and Small States.
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What Is A Private Student Loan
Private student loans do not come from the federal government. Banks and other financial institutions generally provide private student loans. Other private student lenders include non-profit lenders and schools that offer their own loans.
Generally, you should use private student loans as a last resort to fund your education. Most private student loans do not offer the same protections as federal loans, such as income-based repayment plans, forbearance, and discharge upon death. In addition, private loans are usually more expensive than federal loans.
However, in contrast to federal loans, private loans are subject to state statutes of limitations on collection and, for the most creditworthy borrowers, may offer better interest rates than federal loans.
Two subsets of private education loans are peer-to-peer loans and institutional loans.
Help For Homeowners And Renters
The American Rescue Plan provides $21.5 billion in emergency rental assistance through the Treasury Department. California will receive an estimated $2 billion. To apply for emergency rental assistance click here.
The Department of the Treasury has compiled a list of websites associated with Emergency Rental Assistance grant programs here.
The bill also provides $9.9 billion to help homeowners struggling with mortgage and utility payments. To apply for mortgage assistance click here.
To learn more about qualifying for coronavirus-related federal housing assistance or to access additional resources, visit the Consumer Financial Protection Bureaus webpage on coronavirus-related housing relief here.
Click here for a quide on California’s eviction protections for tenants and support for landlords from the COVID-19 Tenant Relief Act.
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Ask Questions About The Credit Card Relief Packages They Offer
While your credit card company may offer up one or more options, have a list of questions prepared in advance. You want to make sure youre completely comfortable with the terms before you agree to these options.
Here are key questions to ask:
Note: that the recently passed Coronavirus Aid, Relief, and Economic Security Act places special requirements on companies that report your payment information to credit reporting agencies if they provide payment relief due to the coronavirus pandemic.
- Will I lose the ability to charge anything to my card if I enroll or request relief?
How Much Does Debt Relief Cost
Debt relief companies tend to offer a free consultation to get the process started. From there, they charge performance-based fees that typically work out to a percentage of the debt amount you have enrolled.
Based on the companies we profiled, common debt relief charges work out to 15% to 25% of the total debts enrolled in a program. This means that, if you sign up for a debt settlement program with $10,000 in credit card debt, you may wind up paying $1,500 to $2,500 to get it resolved. And remember, thats on top of the amount you pay your creditors to settle your debts.
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Down Payment Assistance For Buying A New House
Down Payment assistance has become very popular now a days as we all know that the price of lands, the cost of constructions has spiked up. its not easy for everyone to buy a new house with full payment. These down payment assistance help first time home buyer to buy homes with low interest loans. down payment assistance is a state wise programs, so the interest rate may be vary from state to state.
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Debt Relief: Understand Your Options And The Consequences
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list ofour partnersandhere’s how we make money.
Find that you’re just not making progress on your debt, no matter how hard you try? If that’s the case, you might be facing overwhelming debt.
To break free of this financial burden, look into your debt relief options. These tools can change the terms or amount of your debt so you can get back on your feet more quickly.
But debt-relief programs are not the right solution for everyone, and its important to understand what the consequences might be.
Debt relief could involve wiping the debt out altogether in bankruptcy getting changes in your interest rate or payment schedule to lower your payments or persuading creditors to agree to accept less than the full amount owed.
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New York State Get On Your Feet Student Loan Forgiveness Program
The New York State Get on Your Feet Student Loan Forgiveness Program is designed to help recent New York State college graduates focus on establishing their careers and starting life out on a sound financial footing. A graduate will be eligible to receive an award equal to 100 percent of his or her monthly federal income-driven repayment plan payments for 24 months of repayment.
To qualify you must:
- Graduate from a New York high school or receive a New York State high school equivalency diploma
- Graduate from a college or university headquartered in New York on or after the 2014-2015 school year
- Earn less than $50,000 adjusted gross household income
- Enroll in the federal Income Based Repayment plan at 10% of discretionary income, the Pay as You Earn plan, or the Revised Pay as You Earn plan, and current on your repayment obligations
- Continue to live and work in New York
- Apply for the program within 2 years of graduation
How Much Do Debt Relief Companies Charge
The leading debt relief companies generally charge a fee ranging from 15% to 25% of your total debt enrollment into the companys settlement plan. For example, if you are looking to settle $10,000 of debt, you can expect to pay a fee of up to $2,500. A legitimate company following the Federal Trade Commission rules will not charge up-front fees before successfully negotiating the settlement, which may eliminate the risk of an unnecessary payment.
Additional fees you might need to pay if the negotiation is unsuccessful include application, account setup, account management, and administration fees. Before signing up for a debt-negotiation service, carefully examine the companys fee schedule.
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Tips And Advice To Find Government Debt Relief And Grants
Are you drowning in Debt? Not sure how to get out of debt?
Do you think that the government is the best place to turn to get out of debt? Did you know that the US government has racked up more than $28 Trillion in debt…that is serious debt. While it is true that there are some limited government debt relief programs, dont count on the government to bail you out.
Does government debt relief exist? If so, what exactly are your options? There are some misconceptions about what the government can do to provide debt relief. In short, the federal government does have assistance programs and grants, but there is no such thing as a straight-forward debt relief program issued by the government where your debts disappear magically.
It is vital to get a grip on your debt situation. In general, any government program will aid those in hardship, although not everyone in financial hardship will qualify for a government debt relief program. It is good to keep in mind that government debt relief is not a solution for many debt problems, especially with unsecured debt, such as credit card debt. However, it is also a good idea to know your rights and what type of help is available.
To understand how the government can help you find the best debt relief solution for your personal situation, learn about:
- Handling debt and tips from the government
- Government debt relief for different types of debt
- Government debt relief and protection against debt collectors and lawsuits
What Is Considered Low Income
If youre one of the millions of Americans struggling to get ahead, you probably have months when the term low income falls short of covering the difficult challenges you face. But the many federal debt relief programs available to consumers rely on certain defining standards for low-income households versus poverty-level households.
Understanding the difference is important. Dont confuse the two.
A poverty level household is based on the minimum amount of income a family needs for food, clothing, transportation, shelter and other necessities. It is also known as the federal poverty guideline.
A low-income household is one whose taxable income for the preceding year did not exceed 150% of the poverty level amount.
So, the standards for low-income households are 50% higher than those of a poverty-level household. In real numbers, in 2020 a one-person, low-income household would have income of $19,140, while a one-person, poverty-level household would have income of only $12,760.
The Department of Health and Human Services puts out charts every year that define both low-income and poverty-level limits based on income and size of household. The charts below show what those numbers are for 2020 in the 48 contiguous states with separate charts for Alaska and Hawaii that reflect the higher cost of living in those two states.
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Not Eligible For Any Of The Above Programs
Donât worry. There is another government-approved debt relief program available for you if you owe more than $10,000 worth of debt and have been struggling with this pandemic.
Not only does this program provide debt relief, it will also be able to help you finally get out of debt â meaning it is a permanent solution to your financial hardship.
This program is a government-approved debt relief â Debt Consolidation. Let us help you understand the great benefits of this program, talk to us now.
Debt And Grants Due To Education
Many of the families are not able to manage the basic needs of their family and thats why for them it is very tough to handle the expenses of their childs education. And when this type of situation has come in front of them, they do not need to worry. Because the government has countless grants for debts schemes. And those schemes can help the people to put their children in school and college for their further education.
But these scheme-related grants have one drawback. The drawback is that a student has to take a loan for their study and in the future, he or she has to pay the loan. If they do this then they can able to get the grant under the schemes to pay off debt.
It comes where many of the private programs and schemes support the families who are unable to afford the cost of the education. These valuable assistance grants are provided to them, so their children will get a proper education. These schemes provide scholarships and these are given to those children or students who need them and also who is deserves them. Because many of the students need the opportunity to show their talent and with this, they can fulfill their dreams and chase them.
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Youre Our First Priorityevery Time
We believe everyone should be able to make financial decisions with confidence. And while our site doesnt feature every company or financial product available on the market, were proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward and free.
So how do we make money? Our partners compensate us. This may influence which products we review and write about , but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services.Here is a list of our partners.