Federal Student Loan now in Collections - Bankruptcy Question...?

Question

Hi.

My fiance had a federal student loan with Sallie Mae back in 2005.  It is now in a Collections Agency and no longer under Sallie Mae.  I know Bankruptcy does not apply to federal loans, but since it has been bought off by a private Collections company, does that change anything?  If he declares bankruptcy will that collections amount go away?  I'm not familiar with this type of thing, so I'm hoping someone can help us.  We're getting married next year and I'd rather we not have such a huge debt.  Unfortunately, the interest keeps being added on and if we pay every month (which they won't let us do unless it's a specific amount which is much higher than we can afford), we still will not touch the principal.  Thanks in advance!

The Good Fight · Accepted Answer

Get in contact with these people:

www.daveramsey.com

Call them.  There is a number at their website and they can give you very sound advice.  

I also encourage you to listen to his radio show because the advice he gives can absolutely turn your life around regarding finances.  His website will tell you what station it plays on in your area.  Most marriages end because of financial trouble so I would encourage you and your fiance to buy yourselves a wedding present and take his financial peace class.  Your outlook on finances will never be the same again.

They deal with people going through this type of situation every day and can tell you as well as anybody how to approach your problem.

Lastly, a few things that will bless your marriage tremendously:

1.  Never buy new cars.  Buy used cars which have taken a serious depreciation hit.
2.  Never....ever.....EVER....use credit cards.
3.  Stay so far away from debt that it's like the plague to you.
4.  Live below your means.
5.  Save some money and keep an emergency fund.
6.  Pay off your debts that you still have quickly starting from smallest to lowest and once the lowest one is paid off then attack the next highest one.
7.  Remember...debt will absolutely DESTROY your marriage.  Again, stay away from it.  Don't live like the rest of the world and then you wont be like the rest of the world.  Everybody is in debt up to their eyeballs and it destroys relationships.  Your relationship is more important than STUFF and MONEY so don't put your faith in stuff and money. 

By the way....did I mention that you should STAY OUT OF DEBT.  Don't borrow money.  Save and pay cash or don't buy it.  Don't think it's impossible.  It is.  The rest of the world is going to hell because they think it's impossible.  

The rich people are the people who don't look rich nor do they live rich!  The book, "The Millionaire Next Door," did a study and showed that the average millionaire owns a watch that cost him less than $30!  How's that for being rich? 

I wish you well and may the Lord richly bless your marriage.

*

Anonymous · Answer

Well, the good news is he's only your fiance.  Don't marry him until he gets rid of the debt.  

Seriously.  This never gets any better.

? · Answer

No NOTHING gets rid of Student Loans.  So pay them

kapn · Answer

Well..........he took out the student loans........and defaulted..........so..........your going to marry a dead beat..........think about it...........when you say I do.........you sign up for his debts........gonna buy a house, car, dishwasher or take out a credit card application.......not gonna happen for you or him.......want to hook your star to that..........NOT...........think about it.........a student loan is forever..........until its paid off........

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Federal Student Loan now in Collections - Bankruptcy Question...?

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