My question involves collection proceedings in the State of: NJ.
This is for my girlfriend- She wanted to go to college, her parents did not want her to. The parents made too much money so she could not get student loans. THe school (Montclair State University) tricked her into getting "private student loans" because she had no co-signer. She originally owed $64,000 for the 4 years of education. Little did she realize she was soon to pay a minimum of $1,300/month. This was absurd so I called the international Sallie Mae and tried to plea and negotiate a lower realistic payment. I got them down to $900/month for 30 Years... This is pretty much a life sentence. BTW, the loans are at a Non Fixed interest (Prime Rate of market) which fluctuates with the market. Not verry fair.. There are about 15 loans and each one has its own interest rate ranging from 8.5%-16%.
With there being no teaching jobs in NJ and my girlfriend having a teaching degree, she is pretty much not going to be able to pay back this loan. We had visited a bankruptcy lawyer today and this is the info we got.
You will need to stop paying the loans because you physcially cannot pay them. they will then send a judgement after her. THe lawyer said they can only garnish your wages at max of 10%... so if she made 50,000k a year she would only have to pay 5k per year to her debtor. Which is significantly less then 1,300/month /year. So this means that she can possible run up her credit card bills and then every number of years file for bankruptsy? The reason we are letting the loans default is becasue we do not know which loans are "gov't" or "private" this is how they give people the loans... if they are government then we cant get rid of them, if they are somehow private then the bkanrupsty will be fine.
THe problem is... she will not be able to have any assets for the rest of her life and she needs to find people (possibly parents) who will let her put cars/assets under there name. SO pretty much she will be living almost like the underworld, like the immigrants, like an average American? All this girl wanted to do was become a teacher and teach kids, now she is in the worst shape of her life and her life didn't even start yet, shes 24.
Does this mean we can just start abusing her CC's and then pay the monthly minimum and just live a happy life of debt but never be able to own assets? Never have a penny in the bank account?
PLEASE HELP.. we need some advise.. this is killling us and our relationship and our ability to be happy kids and enjoy living... she speaks of suicide so often because of this... its a very serious problem.... please help!!

