If discharging your student loan indebtedness in a bankruptcy is not a feasible option and your student loans are private student loans, you may want to explore settlement options.
Federal student loans are funded by the federal government whereas private student loans are made by a lender, such as a bank, credit union, state agency or a school.
Even though private student loans are securitized like mortgage loans, they are unsecured debts like credit cards. Most of the time the private student loan lender has little documentation regarding chain of title and proper ownership of the obligation. In addition, they usually have difficulty producing a reliable accounting of the loan and do not have any original records underlying their claim. Therefore, private student loan lenders are generally willing to settle unpaid obligations on fairly attractive terms.
If you simply cannot make your private student loan payments, a strategic default may be an option. An attorney may be able to assist you in invoking the provisions of the Fair Debt Collection Practices Act as well as state laws to halt collection activity while you save funds with which to settle.
Finally, private student loans are governed by the same statute of limitations that govern collection of other past due debts. Therefore, it is possible for a private student loan lender to neglect to file a lawsuit until after the expiration of the statute of limitations which would relieve you of the obligation completely.
For more information on debtor-creditor issues, please contact Charles Smith or Nicole Hughes at Telpner Peterson Law Firm, LLP today at 712-309-3738.