Paying off federal student loans with credit cards thereby taking the gov’t out of the picture if charged off?
If one pays off federal student loans with a credit card, and then is delinquent on the card and the creditor charges it off….. May the card issuer get the IRS to pursue the debt on its behalf as this debt was originally a federal student loan? OR Does the fact that they were federal loans not matter since the loans were paid off through the card and the lender of the loans, its gaurantor and the IRS are now OUT of the picture, as it became a regular credit card debt, in which case one would ONLY have to deal with the card issuer (and its collectors) as any other credit card debt? I know that crad rates are higher and that consolidation of loans is excellent. I have already done that. I am NOT interested in all that. I only want to know what may happen once the card that was used to pay off federal student loans is charged off? Is it like any other card charge off or not. Does someone have EXPERIENCE with this?You would be liable in civil court and they could get a judgment against you , Then start garnishing your wages or take any possession they feel of value . ( except for 1 cheap vehicle used as transportation to work ) >
I know you said you didn’t want to hear it, but I can’t help but point out that paying off a student loan with a credit card is about the dumbest thought a person can have. Student loans have much lower interest rates. Also, if you try to get another loan in the future like for a house, a car, etc, you will have a much better chance of getting a loan with excellent rates if you have student loan debt rather than credit card debt. Credit cards also charge fees and raise interest rates if you miss a payment whereas student loans can be much more forgiving. To answer you question though, I am quite certain that if you pay off anything with a credit card whether it is loans, clothes, food, etc., it will be treated the same way. Therefore, if you pay off student loans with a credit card, you will no longer have student loans. You will just have a lot of credit card debt which is much worse than student loans.
Student loans cannot be discharged unless you are in a comma or other state where you are literally unable to work. Our beloved George Bush and his handing out enacted laws to keep people from discharging debt completely when unsecured, primarily to protect credit card companies which are among the most profitable businesses anywhere. What it means is that it would be much more hard to discharge your credit card debt in bankruptcy court, but you if you are really broke you will probably be able to get rid of your credit card debt. If you are not then you should be able to get much of it, though not all of it discharged. So the answer is the government is out. Your agreement is with the credit card companies. You would need to file for bankruptcy though, otherwise they can go after you for a period of about 4 years from the time you stopping paying them. If you are over your head and need a fresh start, I reckon your plot is brilliant. The critics don’t know what they are talking about.
Can I consolidate all my student loans listed at NSLDS?
My NSLDS account (http://www.nslds.ed.gov ) lists several student loans I have, both direct and non-direct, subsidized and unsubsidized. Now the government’s Direct Consolidation Loans (http://www.loanconsolidation.ed.gov/ ) claims I can consolidate “U.S. Department of Education Direct Loans, U.S. Department of Education non-Direct Loans, Perkins, and Federal Family Education Loans”. Does this basically mean I can consolidate ALL the loans I have listed at NSLDS? I’m assuming all my loans listed on the NSLDS are government loans, either direct or non-direct, right?Yup, that’s what it means.
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Consolidating student loans. What is the best service to use?
The one site I found was http://www.loanconsolidation.ed.gov Has anyone ever tried that site for their loan consolidation? I didn’t know if I could get away with paying much lower, but I had calculated that my total student loans would be $ 236 and using that service I would save nearly $ 45 a month and my monthly payments would be $ 153 plus $ 40 that I was just gonna pay cash every month since I didn’t defer my loan for $ 40. Are there any better sites out there to use? I wasn’t sure if they were all the same or if one was better than the other.That’s probably the best one. I consolidated with direct loans, the site you mentioned. It worked out well for me. The best thing about this option is that you still retain your rights after consolidation.
More Student Loan Consolidation Gov
Links
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I think it is a great idea. I should have thought of that. And once you take the gov’t out of the picture, it will be easier to deal with. Even if the interest is higher, still you are more or less out of the Federal area.
With credit card debt you can do all sorts of things.
“Charged-off” = “I wanna screw the credit card company”
What he is saying is he wants to transfer non-forgivable government debt over to a credit card and then refuse to pay for it, hoping it will ‘go away.’
i’ve heard this as a recommended course for people who graduate with a few hundred thousand dollars of school loans – just pay them off with unsecured debt and claim bankruptcy.
not sure if it would really work, but it seems a bit too easy to be true. if you could do this, then everyone filing bankruptcy would do it. i think the likely result is that a bankruptcy judge would not excuse any debts on credit cards that were full of student loans, so you’d still end up owing the money – just at 30% instead of 6%.
Looking for a way to defraud the taxpayers, are you?
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