Get Out of Debt Guy

Wells Fargo Student Loans is Chasing Me

Posted August 7, 2013
Updated November 11, 2014

WRAL Reader Question

Dear Steve,

My student loans are out of control.

My four federal loans total $10,790.00, these require three payments totaling about $250.

Then there is Wells Fargo at just over $75,000.00 which was a payment of around $550.

I made these payments faithfully for almost two years, started to struggle in the beginning of 2013 and then was laid off. I just started working again. After missing four payments, Wells Fargo charged of my account and is now demanding the entire balance or participation in what my adjuster calls the 'only acceptable payment plan' which is $2700/month for three years.

Unless I can convince the government to stop taking taxes out of my check, my landlord to let me live for free, and start my own garden for food - this is impossible. They are threatening liens against anything I or my parents own and garnishing both our wages.

Luckily, my parents took on my federal loans so those are up to date but this Wells Fargo loan is choking the life out of me.

What can I do? I am willing to try anything at this point.

Chris

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Dear Chris,

When it comes to private student loans there are some options, but none of them exceptionally wonderful.

It also sounds like your parents might have cosigned for your Wells Fargo student loans. If they did, they remain 100 percent responsible for the balance due if you can't pay it.

Student loan debt has and will always be a trap until the law is changed back to make it more manageable. The Consumer Financial Protection Bureau is looking into options to help people deal with student loan debt but we will have to wait and see what, if anything, they can roll out.

If Wells Fargo is unwilling to modify your payment and your parents cosigned for the debt, then they will be on the hook for the full balance due. That's what they would have agreed to when they cosigned. That's why I recommend that nobody ever cosign for anyone else. People who cosign think they are helping out a family member or friends. In fact they are essentially putting a financial noose around their neck.

They can't get a lien against anything you own unless they sue you. And being sued is not the worst thing to happen. Often times the suit can lead to a negotiation and settlement on some of the debt. But if your parents did cosign, Wells Fargo may just look to them for the money due.

If your folks have the cash on hand or they can raise the money, it might just be best off at this point for them to payoff the Wells Fargo debt and you then repay them.

Please take a few minutes and read my guide, The Ultimate Guide to Dealing With Student Loans You Can't Afford.

If your parents did not cosign for your Wells Fargo private student loans you should also read this information about discharging private student loans in bankruptcy. It is possible.

Before I go, here are {{a href="external_link-9”}}three things you can do right now{{/a}} to tackle your issue. {{a href="external_link-9”}}Click here.{{/a}}

Steve Rhode
WRAL Get Out of Debt Guy

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  • kennethoconnor Aug 9, 2013

    Steve. Thanks for another great article.

    Chris, (the person that originally wrote the letter), we would like to try and help you as best we can. cuStudentloans is a consortium of Credit Unions that have put together a private student loan consolidation that is making a big difference. Apply for cuGrad and find out if our program can help you too.

    Check out the site
    http://www.custudentloans.org/our-loans/cugrad-private-student-loan-consolidation/

About this Blog:

Steve Rhode has had careers in opthalmology, real estate and as the head of a nonprofit debt counseling firm. On his blog, he offers hard-won, free advice about getting out of debt, consolidation and making the right choices as you manage your money.