Many not-so-pleasant things can happen to you if you don't pay your prestige card and student loans.

Here's what happened to me...

Student bank loans

I started getting letters asking me to pay the loans in full. When I ignored them, I started getting more letters. At first the letters are kind of friendly.

"In case you've forgotten or didn't receive the last letter"... Then they get stronger. "Warning: You are late with your payment"... Then they get threatening. "Legal operation Pending"...

Then, One day a letter comes saying - This is your Final notice.

I idea "Good, at least I won't have to hear from them anymore" - Wrong! - More letters keep coming. I ignored these letters for a very long time.

And then one day The letter comes telling me that I will Not be receiving my State wage Tax reimbursement Money. The money is being withheld to pay a debt. Oh Crap!... I was counting on that money.

Oh well, let me just get on with my life.

Time passes, I forget about it. Life is good. And then one I go to the bank to withdraw some cash out of the Atm machine.

"Sorry, that transaction is not available at this time".

"Stupid Atm machines" I think. I call customer assistance to tell them off and complain, and I'm informed that there is a "Freeze" on my account.

A "freeze" on your list is like a banking Black Hole. Nothing can escape. You can put money in, but you can't take it back out. Nothing comes out... No money. The list is now dead and the money in the list stays there until the matter is cleared up.

Or so I thought... Meanwhile, the self-operating deductions that I had previously set up and which had worked just fine for such a long time, no longer go through or get paid.

So, what does the bank do?

They fee you with a insufficient fund charge... ...each occurance.

"But the money is in the account" I protest. "Not anymore, deadbeat" is what the banker was probably thinking. What they really say to you is that you have to take the matter up with the enterprise that froze the account. I'm mental "But I don't even know who froze the account". They offer no help.

But Meanwhile, the bank is happy to keep charging you everytime an auto-debit attempts - until All the money is sucked out the account.

So, why not just close the account. Because You Can'T. It's frozen.

And that's not the end of it! Oh no...

Until you stop the auto-debits, they keep charging you. You had money in the account, the bank takes All Of It and keeps charging you.

And now you owe the bank money!

And your creditors, which are Not getting paid, start slamming you with late fees, sometimes over limit fees and start calling you on the phone with some "friendly" reminders that you still owe them money.

And it doesn't stop there... No, No, No...

All right I think - "Screw Citibank". I'll just open an list elsewhere. And so I did.

The thing is... Now I'm afraid to leave any money in the account, wondering when "Big Brother" will find this list and seize and freeze the money.

And you start wondering if they will place a "freeze" on your prestige cards (if you're lucky to have any left).

What Happens When You Default On learner Loans and prestige Cards- Part 3/4

READ MORE - What Happens When You Default On learner Loans and prestige Cards- Part 3/4

Are you planning to obtain student loan to take admission in a reputed institution? If your answer to this is yes, then you must be aware of the basic things to take into consideration before you come to any final decision. Many students prefer taking loans from different sources, but being unemployed, they sometimes, have to go through tough times because of getting involved in student loans in default issues. As a result of which, the default cases on student loans have increased rampantly. The consequences of student loans in default matters are really very tough to deal with and hence anyone applying for them must try to gather as much information on it as possible.

READ MORE - Ideas to Solve Private Student Loans in Default Problems

What is a Treasury Offset?
Under this Treasury Offset Program, the Financial Management Service, a bureau of the US Department of Treasury will offset Federal and/or State payments if a borrower fails to pay their obligation.  While the most common type of Federal payment offset is Federal income tax refunds, several other types, including social security benefit payments, are also eligible for full or partial offset. In other words, if a borrower has an outstanding debt and they have incoming social security benefits, this too can be subjected to the offset.
In addition to defaulted debts held by ED, defaulted loans held by guaranty agencies are also included in the process.
Other Federal and State agencies also certify debts for offset, but Department of Ed has historically been responsible for the largest volume of offsets.  As a result, many tax professionals, and even the IRS, will automatically assume that an offset has been requested by the Department of Ed when, in fact, it may have gone to some other Federal or State debt.
State Payments
State payments (e.g., State tax refunds), in addition to Federal payments, may be offset in the Treasury offset program.  Just recently the treasury was requested to offset both Federal and State payments on out standing federal student loans.
What is a Treasury Offset?
The purpose of a Treasury offset is to recover the amounts for the Federal taxpayers without the cost of litigation fees. It was created to basically recover the unpaid debts arising from federally supported activities, which include student financial assistance.
Since 1986 the Department of Education has referred millions of defaulted student loan debts and grant claims to the Department of Treasury for collection by offseting against federal and/or state income tax refunds and any other payments authorized by law. The Department of Ed can request that Department of Treasury arrange an offset to collect any Federal defaulted student loan debt or grant claim.  Once the Department of Educations refers a delinquent borrower to the treasury department these group of debtors are considered to be certified permanently as long as the account is in an active defaulted status (outstanding).
What does it mean if I am certified?
Once Department of Ed certifies a defaulted account for treasury offset, that account will remain certified for the life of the defaulted balance unless it is inactivated by law (e.g. active bankruptcies).  Once certified, borrowers may not avoid offset simply by making voluntary payments.  Borrowers may avoid offset by resolving the account through satisfying their account in full, settlement compromise (Partial pay-offs), completing the rehabilitation payment program, consolidation, or discharge by dispute.  In other words, if a borrower is not disputing the account they would need to either pay the balance in full or bring the account back to a current status.

How can I check if I am certified for Treasury offsets?
There are several ways to go about checking if a defaulted loan holder is certified for Treasury offset. The most common route would be to contact Department of Ed directly; however in most instances the Department of Ed’s customer service call center will often refer a borrower to the assigned collection agency currently holding the loan. A borrower is able to check with the collection agency if they have been certified for the offset because the collection agency has access to the same system as Department of Ed’s customer service representatives. As mentioned above, these agencies are notorious for falsely advising borrowers by twisting their word tracks in their favor. The collection agency’s main intent is to receive a commission from the Department of Ed for resolving the account so it may not be the wisest route. The best route to receive an unbiased answer would be to contact the Treasury Department directly. Most defaulted student loan holders are unaware that the Treasury Department has designated a call center to solely service individuals certified for Treasury offsets.
Department of Education’s customer service number: (800) 621-3115
Treasury Department’s designated offset call center: (800)304-3107

Other things that you might want to know:
Are there different types of compromises?
Standard compromises are compromises where the borrower:
* Pays only the current principal and interest (waiver of projected collection costs/fees)
* Pays at least the current principal and half the interest (50%); or,
* Pays at least 90% of the current principal and interest balance

What is the Rehabilitation payment program?
Rehabilitation payment program is the process by which a federal agency or a third-party given authority by a Federal agency, assess the borrower’s financial situation to allow a payment arrangement.  Through this process at the Dept. of Ed and the agency’s discretion, the debtors will be allowed to repay their student loans through installment arrangements (payments).  Only after the necessary documents have been obtained by Dept. of ED and the 3rd party agency the borrowers can complete the number of consistent payments required in order to successfully rehabilitate.

READ MORE - Student Loan Default - Student Loan Tax Offset (Defaulted Student Loan - Student Loan Treasury Offset)

New data from the U.S. Department of Education show that 2008 was a bad year to graduate from college in terms of student loan defaults. According to the Education Department, 7 percent of the class of 2008 has defaulted on its federal student loans, the highest cohort default rate in more than a decade.

READ MORE - Rising Default Rates on Student Loans Stir Concerns

Many not-so-pleasant things can happen to you if you don't pay your credit card and student loans.

Here's what happened to me...

I started getting letters asking me to pay the loans in full. When I ignored them, I started getting more letters. At first the letters are kind of friendly.

"In case you've forgotten or didn't receive the last letter"... Then they get stronger. "Warning: You are late with your payment"... Then they get threatening. "Legal Action Pending"...

Then, One day a letter comes saying - This is your FINAL notice.

I thought "Good, at least I won't have to hear from them anymore" - WRONG! - More letters keep coming. I ignored these letters for a very long time.

And then one day THE letter comes telling me that I will NOT be receiving my State Income Tax Refund Money. The money is being withheld to pay a debt. Oh Crap!... I was counting on that money.

Oh well, let me just get on with my life.

Time passes, I forget about it. Life is good. And then one I go to the bank to withdraw some cash out of the ATM machine.

"Sorry, that transaction is not available at this time".

"Stupid ATM machines" I think. I call customer service to tell them off and complain, and I'm informed that there is a "Freeze" on my account.

A "freeze" on your account is like a banking Black Hole. NOTHING can escape. You can put money in, but you can't take it back out. Nothing comes out... No money. The account is now dead and the money in the account stays there until the matter is cleared up.

Or so I thought... Meanwhile, the automatic deductions that I had previously set up and which had worked just fine for such a long time, no longer go through or get paid.

So, what does the bank do?

They charge you with a $30 insufficient fund charge... ...each occurance.

"But the money is in the account" I protest. "Not anymore, deadbeat" is what the banker was probably thinking. What they actually say to you is that you have to take the matter up with the company that froze the account. I'm thinking "But I don't even know who froze the account". They offer no help.

But Meanwhile, the bank is happy to keep charging you $30 everytime an auto-debit attempts - until ALL the money is sucked out the account.

So, why not just close the account. Because YOU CAN'T. It's frozen.

And that's not the end of it! Oh no...

Until you stop the auto-debits, they keep charging you. You had money in the account, the bank takes ALL OF IT and keeps charging you.

And now you owe the bank money!

And your creditors, which are NOT getting paid, start slamming you with late fees, sometimes over limit fees and start calling you on the phone with some "friendly" reminders that you still owe them money.

And it doesn't stop there... No, No, No...

All right I think - "Screw Citibank". I'll just open an account elsewhere. And so I did.

The thing is... Now I'm afraid to leave any money in the account, wondering when "Big Brother" will find this account and seize and freeze the money.

And you start wondering if they will place a "freeze" on your credit cards (if you're lucky to have any left).

READ MORE - What Happens When You Default On Student Loans and Credit Cards- Part 3/4

Millions of college and university students and graduates have funded their college education using one of many student loan programs. There is no doubt that a college education will provide not only increased income but also more employment options throughout life. However it will require many years to pay off most student loans. It is not uncommon to have student loan payments extend for 20 or more years.

Many students and graduates will end up using multiple student loans before they get their diploma. Without good student loan consolidation advice a graduate may end up making multiple student loan payments each month all of which will strain a family's budget. In addition with multiple loan payments it is fairly easy to end up defaulting one or more student loans. Student loan default is serious business especially if you are an entrepreneur or in business for yourself.

Getting behind on your student loan payments can happen as a result of a family emergency, the birth of a child, job change or loss of employment. When this situation arises the worst thing you can do is ignore the problem. Most student loan programs are backed by one of several federal loan programs. As such if you are late and ignore correspondence from your lender your loan will also be in default to Uncle Sam.

If you are having a financial problem and cannot make your student loan payments you should immediately contact your lender. Explain your circumstances and tell them that you fully intend to pay the loan off as soon as you get back on your feet. Frequently there will be programs available to help you. These delayed or reduced payments with forbearance programs are available with both private and federally backed student loans. In most cases the interest on your loan will continue to accrue during the delay. However penalties and collection fees will be avoided if you act in good faith with your lender. This also may be a good time to seek good student loan consolidation advice from your lender.

Again ignoring the problem of being in default on your student loans can cause real problems. Graduates who default on federal student loans may soon be getting a letter from the IRS seeking collection that includes penalties and collection fees. Once you find yourself on the IRS delinquency files your name will stay in their data base forever. If you are in default with a private lender then you will be subject to court ordered collection processes. In addition your credit score will fall like a stone making it more expensive when it comes time to purchase a home or vehicle when you get back on your financial feet.

READ MORE - Avoiding Student Loan Default

You can be considered in default of your student loans after one or two missed payments. Even if you make partial payments your account can go into a default status. This is not a bill that you can ignore without serious repercussions. You may think that you are just racking up a few late fees, but you could not be more wrong.

You will be charged late fees, of course, but what you may not realize is that these late fees can amount to more than you originally borrowed. There is no cap on how high your late fees can go. Collection efforts also come with a charge. The Department of Education has to hire a collection agency to do their dirty work and you get charged for it.

Your interest rate can jump up astronomically every month that you do not pay. This can also quickly raise your balance to way more than you ever thought possible. The Department of Education has the power to get their money by any means possible. Therefore, this huge number on paper will eventually come out of your pocket.

The IRS can send any refunds due to you directly to the student loan manager. This is usually their first line of defense when it comes to getting their money. They usually go to the IRS after ninety days of no payments, so it does not take long. Instead of getting your refund, you may get a letter stating that it has been sent to your student loan lender instead. If this amount does not cover the amount that you owe, then the next step is taken.

Your wages can be garnished and the amount you owe will start coming out of your paycheck. This can be devastating for most families and if you thought you were having trouble paying your bills before, try having your paycheck taken.

If that is still not enough, then they can sue you for the money that you owe. If you receive any kind of federal benefits, then they can intercept those as well. The bottom line is that you can not get away with not paying your student loans off.

If you are in default, call your loan manager and figure out the best steps to take. There are options like deferment, forbearance, and loan cancellation. Sometimes bankruptcy can dismiss student loans, but not always. The best thing to do is to lay out all of your options and come up with a solution. Some loans have income based payments that are adjustable depending on how much money you make. There are options out there for you, but you do have to ask. Paying off your student loans can be within your reach if you try.

READ MORE - What Happens When You Default - Student Loans

They can be considered loans after one or two missed payments in the absence of your students. Even if you can walk your account in installments, a status standards. This is not a law that can be ignored without serious consequences. One might think that there are only a few shelves taxes late, but he was wrong.

It is, however, you avoid late fees, of course, but what can be unaware that these costs may be too late to do more than they originally borrowed. There areCap rates can go as high end. Collection efforts are also subject to charges. The Ministry of Education is to rent an office collection to do the dirty work and you get put into this bill.

Your interest rate can jump astronomically each month, will not pay. This can also increase rapidly in order to balance a lot more than you ever thought possible. The Ministry of Education has the power to get their money by all means. Therefore, these large numbers of people will be on papersome from his pocket.

The IRS can not send reimbursed directly to the operator of student loans. This is usually the first line of defense when it comes to their money. They usually go to the IRS after ninety days no payments, so that will not be long. Instead of repayment, you can write a letter stating that the provider of student loans is sent instead. If this amount is the amount due, the next stepis taken.

Your wages can be garnished and the amount due will start from your salary. This can be devastating for most families and if you thought you were having difficulty paying the bills, before inserting a test with your salary.

If this is not enough, then you can sue for the money you are guilty. If you have any kind of advantage of the alliance, then they can intercept e. The bottom line is that you can get away with not paying your student loansout.

If you are in default, call your provider and credit discover, take the best measures. There are other options such as deferment, tolerance and the cancellation of the loan. Sometimes bankruptcy can discharge student loans, but not always. The best thing to do, all the options and come with a solution. Some loans on income subsidies, depending on how much money will be adjusted. There are opportunities for you, but you have to ask. PayYour student loans can be handy if you try.

READ MORE - What happens if the default - Student Loans

Student loan default can be used as a student loan, not a payment for 270 days or more was defined. Before the loan is in default shall be considered delinquent, and your creditors trying to collect on the loan and every way possible.

If you try to hide your debt and can not be contacted by the creditor or its affiliates, will be placed in default status, and turned with an agency of State securities orwill be put in the hands of the Ministry of Education.

When this happens, the entire amount of the loan are due and payable immediately. Not only the amount you are behind, but the entire amount is financed your original student loans. This is because accelerated the due date for your state by default, and decided to include in your original term the student loans you got it.

Other consequences that go beyond beingin student loans can be included by default:

Then he turned to a collection agency, so that you are trying to collect the debt from you;

They can borrow to raise the initial amount to be included and are the costs associated with the collection of your loan, such as court costs and legal fees;

They can be sued at any time during paid in arrears in full;

Your wages may be garnished, and had less money than originally planned;

Your incomeThe fees may be used for payment may be denied;

Your credit history to show that you are on your loans makes it difficult to get any type of financing in the future and, possibly, his ability to find someone willing to rent payment obligations shocked to be made;

Will no longer be able to get any kind of financial aid to those loans that are in arrears are paid in full or have made timely payments for six months;

Will not be able to receive all the benefits of the federalof any kind, if you can take your student loan in default state.

Is borrowed, in the end, it is required to repay the amounts you must finance your education. If you let your loans go into default, it is connected to repay the original amount, and up to 25% more, through collection of fees in connection with funds from you.

READ MORE - Student Loan Consolidation Info - Student Loan Default