Debt Collectors

[BIG APPLE CAT]

Could really use some advice here guys...basically this story started right after high school when the future mrs. hub decided she was going to go to the finest colleges money could buy.  Skip ahead a few years and she, like many people ages 25-33, has found herself up to her eyeballs in student loan debt with a job that, on her current trajectory, will allow her to pay off her debt by the time she's 125.
Anyway, she's gone through a cycle of debt consolidation and even after that she still has like 4 different loan payments she has to make each month from a variety of private and federal lenders.
So anyway, one of these private lenders has unleashed the collection agency on her.  The current sitch is that the lender is "no longer willing to negotiate" and her 2 options are 1) pay $5000 in 3 weeks, then resume normal outrageously high interest monthly payments or 2) pay off the loan in full over the next 24 months.  And the outstanding balance is something like $45,000...no way in hell that is happening in 24 months.

So like, does she have any recourse but to meet their outrageous demands?  Even with my help she couldn't come up with 5k in the next 3 weeks, but even less likely than that is her being able to pay off 45k in the next 24 months.  Because in reality, neither of those are viable options.  Will they likely take her to court?  Or are they just trying to scare her in the hopes that she'll give them all the money they want?

Would really appreciate any input from anyone who knows anything about how this works.  I feel bad I can't offer her any advice but I was fortunate, my student loan debt (Sallie Mae) was minimal and I was able to pay it off fairly quickly, so I have no experience whatsoever with private lenders or collection agencies.

TIA

[star seed 7]

i just ignore the call when they call

[Branson Bound]

You need to have her call into the Dave Ramsay show. Nobody on this great earth can help you more than him. In the mean time, you should have her cut up all of her credit cards.

[bubbles4ksu]

You need to have her call into the Dave Ramsay show. Nobody on this great earth can help you more than him. In the mean time, you should have her cut up all of her credit cards.

you are perfect.

[slobber]

You need to have her call into the Dave Ramsay show. Nobody on this great earth can help you more than him. In the mean time, you should have her cut up all of her credit cards.

That advice and that sig pic....beautiful together.

[puniraptor]

run

[Emo EMAW]

Do not marry this woman (at least not before she has it all sorted out).

[Branson Bound]

run

No. Don't be a coward. Face this like a man. You might have to stop buying expensive food and clothing. Stop buying your new fancy cars and touch screen phones. I don't know your whole story but I'm sure you can make it work.

[BIG APPLE CAT]

run

No. Don't be a coward. Face this like a man. You might have to stop buying expensive food and clothing. Stop buying your new fancy cars and touch screen phones. I don't know your whole story but I'm sure you can make it work.

No running now...she's already mrs. hub.  Needless to say, she is not a purpleladycat b/c then we'd both be  and she wouldn't be in this situation, but we didn't meet until we were both out of college.

[The1BigWillie]

You have got to pay what they want or it's just going to get worse.  Get 2nd jobs.  Sell what you have to sell...etc...  There really isn't a magic poo poo pill that will un-f*ck her/you.   Sounds like if collections is calling this should have been addressed months ago. 

[bubbles4ksu]

ignore calls. tell any friends/family that they call while trying to reach you to say that they don't have contact with you. when they say crap like "no longer willing to negotiate" ask them to elaborate. document any threats or privacy invasions. keep your assets separate where possible. get a lawyer.

<--- not a lawyer

[Branson Bound]

You have got to pay what they want or it's just going to get worse.  Get 2nd jobs.  Sell what you have to sell...etc...  There really isn't a magic poo poo pill that will un-f*ck her/you.   Sounds like if collections is calling this should have been addressed months ago.

Sometimes collections get involved where they really shouldn't. I gave my son money to give to the school for his lunches and he lost the check. The school never called me about it. They just told him and then the collections agency called me. Oh, I was spittin' mad.

[Dugout DickStone]

Barter with property

[Mrs. Gooch]

Make sure you and her don't have any shared bank accounts.

[highway61]

In your case you should not have any joint accounts with your wife.  The collection agencies might get a judgment against her and then they could garnish her wages and bank accounts.  If she is a signer on your account they can take your money too.

I have heard something about a plan that allows you to have your loan forgiven after 10 years if you work in the public sector, so look into that.

I have heard something about a plan called income based repayment that sets your payments at whatever she can afford then forgives everything after 25 years.  You should look into that also.

[HerrSonntag]

Make sure you and her don't have any shared bank accounts.

This.

So you can't structure them in a way where you can at least make minimum payments and stay above water?  You could always bank on the Obama law bailing you out of any unpaid student loan debt after 20 years.

[highway61]

One more thing.  If you want help from an actual expert call Clark Howard.  Dave Ramsey specializes in helping stupid people.

[BIG APPLE CAT]

You have got to pay what they want or it's just going to get worse.  Get 2nd jobs.  Sell what you have to sell...etc...  There really isn't a magic poo poo pill that will un-f*ck her/you.   Sounds like if collections is calling this should have been addressed months ago.

yeah before her and I met she was somewhere between "irresponsible" and "reckless" when it came to her spending habits.  Since I've met her she has seen the error of her ways and to her credit she is trying really hard to dig herself out of this hole.  But it's a huge hole.  I'm afraid the harsh reality is she (we) can't "pay them what they want" so i'm trying to figure out what happens next.  They can call her all they want but it's not like it's a matter of convincing her to give them the money...she just straight up doesn't have the money to give. 

I'm just wondering what it is they are likely to do about it.  Should she expect things to get litigious or are they just relentlessly harassing her in the hopes she will somehow pay them what they want?  Do regular people racked with student loan debt get taken to court over this on a regular basis?

[BIG APPLE CAT]

Make sure you and her don't have any shared bank accounts.

This.

So you can't structure them in a way where you can at least make minimum payments and stay above water?  You could always bank on the Obama law bailing you out of any unpaid student loan debt after 20 years.

Honestly I find her debt situation to be borderline incomprehensible.  Like, I can't figure out what she did in her early 20s that has caused her to owe so much to so many as she does right now.  Basically her situation right now is that she spends about 60% of her take home pay on staying above water on all of her debt payments.  The rest goes into our joint account which we use only to pay monthly bills, for groceries, and the mortgage.  I'm not terribly concerned about our JA getting targeted because the only time that account has a more than a few hundred dollars in it is right before the mortgage payment comes out, but i'd guess the average daily balance for that account probably isn't much more than maybe 500 or 600 dollars.  And if it does get garnished, I will have HR stop DDing a portion of my paycheck into that account and just have it all put in my account which her name is not on so I'd hope that means they can't touch it.

[highway61]

You are correct.  They can not touch an account she is not on.

[BIG APPLE CAT]

well i appreciate the info hw61.  I've passed these tidbits along to her and so far her responses have been:
*Income based repayment does not apply to private loans
*Even the debt collector on the phone acknowledged they can't come after my money because the debt was incurred before we were married

I'm just really afraid of what the collection agency does once their demands aren't met.  It sounds like we are going to want to lawyer up...

[highway61]

The worst thing the debt collectors can possibly do is sue her.  I wouldn't really worry about that too much because even if they do sue her it sounds like there is no money they can take from her if they get a judgment.  I don't see any advantage to you paying a lawyer.

[wetwillie]

how much we talking about here total? i mean if its like 50K the two of you should be able to kick its ass over the next 3 years no problem. 

[hemmy]

Get a bunch of new credit cards and use the miles to escape to a foreign country

[Shooter Jones]

take the biggest loans possible out of your 401k's and just plan on dying before you retire.