February 19, 2020

Default Cure

Cures for Default of Student Loans Owned or Guaranteed by the U.S. Department of Education

Federal student loans are unique in that a default can be cured as of right pursuant to federal law.  If you are in default 1, we can cure your default by entering into a consolidation or a rehabilitation.

Consolidation:  in a consolidation you are, in effect, creating a new loan with the Department of Education.  When we consolidate we will also put you into an income based repayment plan.   Your account will show a cure fee amounting to 18.5% of your balance, but we will, most likely reduce your monthly payments and the term of your payout.

Rehabilitation: in a rehabilitation, we will also calculate an income based repayment that should reduce your monthly payment, but, as is the case with consolidation, your account will be hit with an 18.5% cure fee.  If you send in 9 payments within the first 10 months 2 of your rehabilitation, it will be granted.  The default notation will be removed from your credit, which makes rehabilitation a desirable option for borrowers hoping to quickly qualify for a mortgage or car loan.

Cures for Defaults of Private Loans

There are no government protections to help relieve a private loan default.  Some of my colleagues have been successful in challenging private student loan lawsuit – call me to discuss these strategies.  A bankruptcy filing can be used to stop the wage garnishment, and stay any further action.   We can also look at the collection process being used against you for possible FDCPA violations.

  1. You are classified as being in default of your Direct, FFEL, Stafford, or PLUS loan if you have not paid for 270 days.  Perkins loans go into default as early as day 1 of your missed payment.  We can determine if your loan is in default by reviewing your NSLDS transcript.
  2. Perkins loan rehabilitations require 9 payments within 9 months.
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Jonathan Ginsberg

Jonathan Ginsberg has served the Atlanta area community as a personal bankruptcy and student loan debt management lawyer for over 25 years. Contact Jonathan for straight answers to difficult debt problems.