Thursday, August 19, 2010

Are you in default? If so, what's it like?

Many of my readers are wanting to know who is in default and what it is like for them. If you could share about your everyday life experiences as a defaulter, that would be great. Those who have recently defaulted are fearful, and wanting to hear stories from those who are familiar with life as a defaulter. Sadly, many of these individuals are depressed and even suicidal. But please keep in mind, suicide is not the answer. We need to unite and end this injustice. We need to do this together. America is facing a new type of civil rights struggle, and that's why indentured educated citizens need to come together and fight for their rights. And let me tell you, I'm fired up and ready to go! Let's be heard in D.C. Let's scream at the top of our lungs and demand change.

On another note, my big mission is to become a non-profit and also put up an ad on Facebook for the indentured educated class. This initiative is called the "Enough is Enough" campaign. Please spread the word and donate a few dollars (every little penny counts). I started the campaign yesterday and have already raised over $150. But I need a lot more. Rest assured, every cent will be accounted for. This money is not going to produce worthless products, but an advertisement for those of you who desperately need to be heard. So please spread the word and chip in if you can!


Anonymous said...

I'm just getting contacted about my loan that got put into default. Since it was a private loan the lender would do nothing to work with me. Now I still don't have a means to work with the creditor. I own nothing of significance and barely make enough to survive as it is. They keep asking me to talk to my parents. My parents can't help me - thats why I got the loan.

Has anyone been going through this for a while? Could you tell me what to expect or a way to deal with it? Any advise helps!

Anonymous said...

Dear August 19, 2010 4:33:

I wrote and posted this today on on another site entitled: "The Student Loan Scheme a Gateway Drug To Debt Slavery." Check it out. It features a flow chart that tries to explain the very complicated Student Loan Situation that frankly I still cannot say I fully understand myself.
C. Cryn Johanneson has seen the chart, and commented on it as well.

Anyway, my comments are a bit long, but I am pasting it here. It is about the 14 year history of my Student Loan and default, and where it is now.

Here Goes Part I:

I'm a little confused.
People have remarked that this flow chart pertains to private loans only.
I had borrowed around 60 thousand in Federally backed Stafford Loans to go to Law School in the mid 90's.
After graduation, I consolidated the loan (it cost maybe 7 thousand to do so) and then the loan was sold and re-sold a few times, and finally ended up with Sallie Mae anyway, where it more than tripled over a period of 10-12 years.
I never could make the payments. They were 700 a month after graduation in 1996, and are now close to 2000. I just never had the extra money after my rent and car payment etc. I never was very successful in Law.
I just kept signing up for more forbearances, and economic hardship deferments etc.
But the interest never stopped accruing. (I never had the option of preventing that)
I never understood how it all worked--nobody did really.
It is only in the last couple of years that people like Allan Collinge and C. Cryn Johanassen have tried to analyze the whole crazy Student Loan "Phantom Industry" (It seems like Robert Applebaum has more or less dropped out of the picture. That is too bad.)

Anyway, if you can follow me so far, I ended up using up all of my forbearance and hardship options, and defaulted with Sallie Mae about two years ago.
The loan went back to NY State Higher Ed.
All was quiet for several months, until I started getting calls from a private collection agency, offering me yet another consolidation "opportunity". This time with Direct Loans (The Federal Government)
It was a bizarre experience, because the collection agents spoke to me like I was a kid on the Barney show. I made tape recordings of a couple of these conversations for posterity. But the collection agency (Barney) instantly added Ten thousdand dollars to the balance as a result, and the loan is now in the hands of Direct Loans or the Federal Gov't as I say.

Anonymous said...

Here is Part 2:

And there the loan will stay for the next 20 to 25 years, collecting interest of course. If I never pay off the balance, the loan will be "Abated" or discharged. But I will owe taxes on the discharged amount.
Fair enough. If the balance on the loan is half a million dollars, I will owe the IRS over 150 grand in taxes I think.
If I cannot pay that, I go to jail because isn't that what the IRS does to delinquent taxpayers? Put them in jail?
And that is how many other Educated student loan borrowers will end up in jail when they should be getting ready for retirement.

The good news is that I now can now make income based payments, which provides for a chance to try and better my income, and figure out a way of possibly paying the loan off, because I certainly do not want to end up as a new fish in what amounts to a debtors prison someday.
And I must say that is a big motivation.

I was married at one time, and my ex would wake up at 3AM many times, very worried about the Student Loans, and the idea of her tax return being garnished-a lien on the house that was in her name-and other possible collection efforts. Lots of paranoia. But the cause of real worry and stress nonetheless.

We ended up divorcing. The Student Loans played a part in breaking up the marriage. They were entirely mine, taken out before the marriage. But somehow, it seems, a spouse can now be dragged into the whole financial mess, no matter when the loans were taken out.
So maybe the divorce was a blessing for her. It allowed my ex-wife to retain all of her assets, and the roof over her head.

I'm willing to take all of the blame. At age 45 I am an unsuccessful man so far. There is no greater proof of that than my student loans, which are close to 300 thousand and growing.
I plan to scan the sheet that contains my most recent balance and post it online on one of the blogs maybe.
I'll white out my name and account number of course. The caption will read: "Show us your Student Loan"

In conclusion, I believe that all bad Student Loan Debt will end up like mine. In the hands of Direct Loans or the Federal Gov't. Discharged after 20 to 25 years with a possibly hefty tax bill to pay, and in the hands of the all powerful IRS.