WHAT TO DO IF SUED FOR PRIVATE STUDENT LOANS?

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WHAT TO DO IF SUED FOR PRIVATE STUDENT LOANS?

I had a private student loan which I defaulted on. It was eventually sold to an insurer. I offered half the principle and they gave bottom a line offer of 70%, plus court cost, which is only $60 less.

Asked on March 16, 2011 under Bankruptcy Law, Georgia

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

As you know, student loans cannot (with the exception of extremely limited circumstances) be discharged through bankruptcy so most students and graduates are required to pay these back.  If you default on a student loan, your options are more limited. If they offered you a settlement that you cannot meet, try going back to the table for a payment plan.  If you still cannot handle that, see if your state (banking department, attorney general or federal branch of department of education) can help you file an inquiry or complaint to mediate this matter. If you still cannot seek resolution, I am unsure as to what else you can do but you may wish to at least consult with legal aid in your city or county or consult with a private attorney. A consultation may help clear some matters up for you so that you can go back to the table and renegotiate.


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