How can I get a private student loan out of default?
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How can I get a private student loan out of default?
I regrettably let 2 of my private student loans become defaulted in a total of almost $45,000. The collection agency has told me that I need to pay a minimum of $460 a month. I explained that with what I get paid I can only afford $250. They will not listen or work with me to resolve the situation. My mother is a co-signer on the account but cannot afford to help me with it and they continue to disregard that fact.
Asked on September 19, 2011 under Bankruptcy Law, New Hampshire
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
You may have no options, other than as set forth below. That's because once someone is in default, the lender is under no obligation to compromise or work with him or her; the lender can generally hold out for full payment, which in turn means it's up to the lender what partial payment or payment plan or schedule it would find acceptable. You can try to negotiate with the lender, as you are apparently trying to do, but you can't make the lender agree to anything which it does not want to agree to.
You may wish to consult with a bankruptcy attorney. Generally speaking, student loans are extraordinarily difficult to discharge in bankruptcy, but unlike tax or child support debts, it is *sometimes* possible to get a bankruptcy discharge is extreme hardship can be shown. This is an option you may need to explore, given how much you are in default for.
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