Default on Private Student Loans
A private student loan is considered to be the same as all other unsecured debts. Unsecured debt may include credit card debt, debts from medical bills and unsecured loans. Should you default on your private student loan debt, your creditor can bring action against your for breach of contract. The lender will go to court to prove reasons why a judgment should be issued, and when they receive approval they'll be allowed to garnish your bank accounts and attach a lien to any non-exempt property you own. They can also cloud title on a homestead with a judgment.
In most cases, private student loans are not allowed to be discharged in a bankruptcy filing. In some cases, if the debt is creating a significant amount of undue hardship, it may be possible to seek relief. Student loans are a complicated issue and it's important to consult with a lawyer if you are experiencing problems. Private student loans have a variety of repayment methods, as well as penalties and these should be reviewed by an attorney.
Should your financial situation be extremely difficult you may be able to use bankruptcy as an option. You will have to qualify to proceed with this type of relief. You'll need to prove that you have tried to repay your debt, that it's impossible for you to maintain a basic standard of living and still make payments monthly. You'll need to prove that these conditions will continue in the future and are not likely to change. If you satisfy the courts and meet the requirements you may receive a discharge under undue hardship. Even then, the court does not usually discharge the full amount of the debt, but does discharge a significant portion.
Consulting with a bankruptcy lawyer usually costs nothing for a first assessment and can provide you with helpful information to resolve your problems and avoid defaulting on your private student loan. Consider this option if you have or are about to default on a private student loan.
Private Student Loan Lawsuits
Many times a private student loan lender will file a lawsuit against you. We have defended many of these student loan lawsuits. Often the best option is to work out a settlement and many times the creditor will agree to a payment plan or a reduction in the balance owed. You should not try to defend a lawsuit without an attorney because the end result is usually a judgment for the full balance and immediate collection on the judgment. Contact us at Weston Legal if you are facing a student loan lawsuit on a private student loan
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Articles about Student Loans
- Consequences of Default on Student Loans
- Delinquent Student Loans
- Student Loan Garnishment
- Default on Private Student Loans
- Private Student Loans in Default