Dear Steve,
I was very irresponsible in this decision that I had made back in 2007 (after I had graduated high school), I somehow managed to convince my father to co-sign a loan for me for $8,500. My father barely speaks English and you could say that I even tricked him into signing those papers. It was terrible.
Anyway, I was making payments on and off for about four years. I had stopped going to school and my original four-five year plan didn't work out as planned. I was working full-time and going to school part-time. I lost my job and could not afford to make anymore of the "minimum payment" of $90 a month, which in turn was really barely paying a little over the interest every month. So many mistakes. You live and you learn, right? Costly mistakes.
Well, now I'm focused on finishing school. Of course, I backed myself into a hole. I'm only finishing my associate's degree in about 6 months and I'll be heading to earn my bachelor's hopefully within two years. In between all of the non-sense, my student loan defaulted a few months ago. The deferment period was over with and it already been seven years since the loan was created. The biggest problem is that it is a Chase private loan and this is what I'm worried about the most.
What are my real options? I got in touch with Chase this past week and they said I have 10 days to make a decision on whether I would want to settle for $6820 instead of the $10,200 that I owe on this account. There is no way I can make that payment and my father cannot afford this either.
I've heard of consolidation and rehabilitation, but I don't know where to begin. I have to get back to Chase and I don't even know what to tell them. I'm in serious need of some advice. Thanks in advance!
Chris
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Dear Chris,
You are right, a lot of lessons learned.
It sounds as if you have a private student loan through Chase. In that case the only options are whatever Chase offers you, accept the settlement, payoff the loan, or make monthly payments you and Chase agree on.
Frankly, Chase Bank is not required to offer you a settlement and yet they've gone ahead and made an offer for you to satisfy your debt for less than you owe. Unfortunately at this time you are not able to accept it and be done with this debt.
You might just have to do what others have done, drop out of school, work full time and pay the loan back.
I'm not sure which is the more painful lesson to learn; taking out private student loans or cosigning.
I wish I had a magic wand but when it comes to private student loans, outside of those private student loans eligible for a bankruptcy discharge, there are no good options yet. It would be worth it for you to read this article and see if those factors might apply to allowing you to discharge your loans today through bankruptcy.
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