For several years I was paying on my student loans. In fact, I reduced my debt from $50,000 to $29,000. However, a few years ago I ran into very hard financial times (divorce and having to move home, etc...it all put me into debt I am still paying off) and could not afford to pay even £50 a month.
I already consolidated my student loans at a good rate by this stage. I tried the forebearance and deferment route, but to no avail (was denied) and found the company to be VERY unhelpful and extremely rude. The only offered option at the time was income sensitive repayments, but using U.S. poverty lines. And when the formulation was done I was told I could more than afford my payments based on my U.K. salary. But, my taxes, mortgage, council tax, standard of living, travel expenses and so on was not taken into account. So, due to my financial situation, I stopped paying and I went into default after I felt all negotiations with the company failed.
Last year, I contacted them and was told I could easily afford $500 a month (I can???) and it took some negotiations to get it down to $250 a month and the loan would be rehabilitated after 12 months. I dutifully paid although it was financially difficult for me. Unfortunately, 4 months after I started paying, I broke my foot and was off work for a few months, but I continued to pay each month. And then I found out I was pregnant after I was told I could not have children!
I paid my student loans until last February (nearly 12 months), but could not continue due to having to pay for everything for the baby. There is little money left over now and we are slightly in our overdraft. We used every tactic to save money (bought second hand except mattresses, charity shops, cloth nappies, cut on food bill, etc).
My other half does not make much money and I am on a salary where I get by. But, we are in a 1 bedroom flat (owned) and cannot even afford a larger place for a few years due to the debts I am still paying off from when I was married. And now I am on maternity leave with half pay. Everything was so unexpected. If I re-mortgage to pay off my student loans, then this means I will have no more equity in my home to buy a 2 bedroom place for many years to come. And I am not willing to do that especially with the way things are going with house prices. And to be honest, I feel my child comes first in all this.
This particular loan company does not accept credit card payment and my bank charges £15 for a bankers draft in U.S. dollars and then it costs me another £10 to send it (insured and signed for). So, even sending £50 would cost £25 just to send it.
I have not lived in the U.S. in over 10 years and have no one in the U.S. to handle any sort of financial affairs for me (estranged from parents). And I certainly do not have a U.S. bank account. In fact, I have few ties to the U.S. apart from some friends.
I am in such a dilemma because I have defaulted on my rehabilitated loan and cannot afford to make any payments at all. I read that since I have defaulted I cannot claim hardship. I am about 3 years away from clearing my UK debts and can afford to pay my loans back at that point, but not now. I have excellent credit here in the U.K.
I can only assume they will hire a debt collection agency here to come after me. And I am prepared for it. I just hope it is in 3 years. However, does anyone know if the U.S. has a debt agreement with the U.K? I know the U.K. has one with Canada. I know that I will have to pay debt collection fees, but if the worse happens I am hoping to negotiate something with the debt collector.
So, does anyone have any ideas at all? Any advice?
