How can I get a private student loan out of default?

UPDATED: Sep 19, 2011

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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


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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