Welcome guest, please Login or Register

   

How to use Inheritence $ to pay back loans? Negotiating settlements for original balance? 

Total Posts: 1

Joined 2017-03-08

PM

 

Hi. I have over $155 in student loan debt. ($50k capitalized, $132k outstanding principal, $23k accrued). I have low income and have not paid on my loans in years while on Income Driven Repayment.

I am inheriting some money soon and wondering how to handle it properly. Do I pay accrued interest before it capitalizes? Do I attempt to find a lawyer or advocate who could help me settle my loans (and be done with it FINALLY) for the original loan amount ($82k) which is about half of the above figure?

Or is it smarter to keep my money and pay as little as I can for the rest of my life?

Any thoughts on above dilemma?

Thank you!
I realize you are not my lawyer nor my financial advisor.

Rank

Total Posts: 2

Joined 2017-11-22

PM

 

Hi there.

I had $165,141 in student loan debt and was on IBR with Cornerstone Loans paying $278 a month. My principal balance was $95,000, and the rest was all of that lovely interest that had accrued after I went on IBR. I have always had low paying jobs, but when my father died suddenly, I found out from his wife that I was set to inherit $170,000 in life insurance proceeds. I immediately called Cornerstone to see if I could negotiate a deal with them, whereby I would pay the $95,000 payable right away, if they would eat the interest. I was told that since I was on IBR, that it was technically a “deal” with them and that they would not negotiate. I then called a couple of law firms that specialized in student loan debt, and they all told me the same… that loan servicing companies like mine had no incentive to negotiate. One attorney pretty much said to not pay off my loans and use the $170,000 on myself and stay on IBR until my loans were forgiven and then tell the IRS that I was insolvent and couldn’t pay the tax obligation resulting from loan forgiveness.

Well, I don’t know about you, but I had suffered 29 years of depression and anxiety over my loans. And with Trump in office, I have heard that IBR may be going bye-bye and that at the very least, I couldn’t count on forgiveness at all or even my insolvency defense to the IRS. So, I instructed the life insurance company to pay the $165,141 straight from the insurance proceeds without ever cutting me a check. It hurt to do that, but I couldn’t live in uncertainty and depression any longer.

Please let me know if you find an attorney who will offer a settlement to your loan company and if your loan company accepts it. I hope you have better luck than I did!