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I want to protect what little money I make for my family. Currently I owe more money than I make each month. The debt I have been obliged to pay for the past year includes:

  • mortgage & insurance: 731
  • car insurance: 100
  • utilities: 200
  • food: 400
  • medical expenses including insurance: 500 (owe about 7,500)
  • petrol: 100
  • misc (haircuts, dog food, car repairs, wife's student loan debt, etc.): 180

Now I was a student with student loan debt, and now all my student loan debt is consolidated under the U.S. Dept. of Education, FedLoan Servicing. I have a paper from this department stating my loan is in forbearance until June of next year, 2016. I have also more recently received a letter from this department stating that my loan is now out of forbearance and is converted to a standard loan, and now I owe ~ $420.00 every month. That is about 420 that I don't have. Currently I am accepting some charity from some of my family to get my pregnant wife and I through the medical expenses.

I work full time and my health is poor, so giving blood or picking up another job seems like a bad idea. I want to know what my options are. I'm hesitant to pay even a few dollars because I fear that may constitute some implied legal agreement.

  • Should I try to argue in a certified letter that I should still be under forbearance given the previous agreement?
  • Does any payment constitute an implied agreement on my part to pay the requested amount?
  • Is there any good advice for people in my situation?
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    Try to find some pro-bono legal assistance. Many law schools have free legal clinics, check in your area. You need a legal advice.
    – littleadv
    Dec 16, 2014 at 1:56
  • Thanks for all the replies. I sent a letter certified mail explaining I cannot pay everyone, I cannot pay that amount requested, I was approved before for a longer period, and that I would like to be put under forbearance again if I'm out of forbearance. I'll probably call just to make sure, I'm just reluctant to use a method of communication that is so unverifiable and tedious.
    – haleonj
    Dec 24, 2014 at 2:51

2 Answers 2

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Standard Repayment can be quite burdensome. Fortunately, it looks like FedLoan Servicing offers a variety of payment plan options, and even provides a calculator that you can use to compare them given your adjusted gross income and current loan balances. This won't reduce that $420 to $0 but it may bring it down significantly.

I agree with @littleadv that you need legal advice to answer your other questions. That being said, I can tell you that it is possible to go into deferment and/or forbearance at any time (not only before you start making regular payments) as long as you meet the criteria.

Otherwise, it may be worth looking through other questions and answers on here about lowering expenses and increasing income. There is a lot of good advice for people in similar situations to yours. If you are truly in hardship, even with a full-time job, you may qualify for supplemental nutrition insurance, a.k.a. food stamps.

Best of luck.

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First I'd call and make sure there's not some kind of mistake. If that fails, look into reapplying for forbearance. I'm not sure what you got it for before, but I added up your expenses (which you say is more than your income) and from your stated SL payments, it's more than 20% of your income. That should qualify you for a mandatory forbearance.

If not, it should definitely get them to approve a financial hardship forbearance.

Before either of those, try to get a deferment though as a financial hardship (not the same as a hardship forbearance, but same principle).

If none of that works, ask for an income based repayment plan. It'll stretch out your loans but will relieve some of the pressure now.

Best of luck!

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