Prior to 1991, unpaid student loans could only be collected for six years after they were due. In 1991, the Higher US Department of Education Act was amended and the time limit for collection was lifted. In addition to applying to current and future loans, the retroactive amendment called in the debts of past delinquent student loans, making them collectible once again. The seriousness of paying off student loans was further enforced in 1998 when a federal law caused the practical impossibility of transforming student debt into a claim for bankruptcy.
If you have delinquent student loans continuing to haunt you and your credit score, there are several recommended credit negotiation options: debt consolidation, credit counseling or debt settlement. Debt consolidation and credit counseling halt the activity of collectors, lower your interest rates and payment requirements, and re-establish your ability to borrow money again in the future. Credit counseling has no required level of income and there are no credit qualifications to utilize these credit settlement options. However, a debt consolidation program does. Understanding your options is critical to finding your way back to better credit scores.
Since not everyone may qualify for a debt consolidation loan, another alternative may be to enroll into a debt settlement program which over the coarse of 12 to 48 months you may settle your bebt for pennies on the dollar. With this type of service comes the downside of collection calls and the potential for lawsuits but if successfully completed the savings (pros) may out weight the cons.
Credit repair is the final step in restoring your credit rating and earning the ability to qualify for the lowest rates and gaining financial stability.
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