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What happens when you become a Defaulted Federal Student loan Borrower

By Michelsmith Subscribe to RSS | April 3rd 2012 | Views:
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So what if you are not financially stable? That doesn’t come on your way to reach your professional goals. The federal Government is there to assist you in furthering career advancements. You might have heard and read a lot about unpaid student loan that has landed the borrower in trouble. Are you stepping back since you don’t want to be a sufferer? Think again, there is enough for you to learn before you drive into a conclusion.

From Student Loan delinquency to Defaulted Student Loan- the Phase in Between

Before you quit the idea of pursuing a Federal student loan you must look into the matters involved. Deferring a payment won’t land you up in a defaulted status unless you are unable to make payments for more than 9 months time. So, have you heard about delinquent student loan? Well, it all starts with your inability to make payments. Your delinquency period starts as soon as you miss out on your payment.

Failure to comply with obligations stated in the contract may also lead you to experience a defaulted status. Once you declare delinquency the lender has certain obligations to fulfill. Within fifteen days you will be send a written notice. The notices send to you during the delinquent period will inform you about the span that is left with you to clear your payments.

However, it is to be noted that if the delinquency last for 9 months or more, you will be stamped as a student loan defaulter. Student loans in default add to the misery of many who are unable to repay the amount. On the contrary if you are finding it tough to make the payments, you can readily request the lender to allow you in postponing the same.

The consequences

The student loan defaulter has to confront with a host of difficulties like the ones stated in the following lines:

Seizing tax refunds: The Federal Government has the right to seize you tax refunds. This may happen till the time you don’t pay off the outstanding amount.

Salary cut: The Government may even slash a portion of your salary if you are a defaulter. The amount slashed from your salary may exceed to 15% of your gross income.

Seizing Federal benefits: The Government may also seize Federal benefits from the borrower as reimbursement for the outstanding amount.

Get Sued: As a defaulter you might get sued by the Government. Lawsuits against defaulters are common.

Michelsmith - About Author:
Michel Smith has faced a lot of problem while buying loan. He has good knowledge on student loan. For more information on student loans in default he recommends to visit http://www.mydefaultedloans.com.

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