I’ve Been Paying What I Can on My Private Student Loans and They Want to Sue Me


Dear Steve,

I took out private student loans and I am still in school. Up until last year, I was able to make the payments but I only had a part-time job and paid what I could. Now I get a letter informing me that my private student loan is at risk of causing me a lawsuit.

What are my options? I’ve been paying what I can.



Dear Roxanne,

I think the most important part of your question is when you said, “I’ve been paying what I can.”

To me, that indicates you might be doing your best but it is not at least the contractually agreed payment.

Sending some payment does little good but slow the default crash. When the payment you send does not cover the payment expected, plus any late fees and penalties, your account will drift further-and-further past due.

Eventually, you will wind up in default and the lender can avail themselves of their legal rights to enforce and/or collect on the loan. This may include suing you and garnishing your wages.

The lender does not care if you’ve had a tough time or not. And this is a good life lesson to learn now.

Loans are based on life being absolute and predictable. The lender and borrower both agree that a payment of $X will be received each month, no matter what the borrower’s personal situation may be.

You have some options now that the loan has apparently defaulted and headed for a potential lawsuit.

  1. You can attempt to negotiate a payment with the lender you can actually afford. The lender is not required to adjust the payment amount so any mutually agreed upon payment adjust must be something you both agree to.
  2. You can intentionally default. That strategy has legal and credit report consequences but if you can’t afford the payment and they are not willing to budge, then you will be in default anyway. You might as well default with a plan. Read Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan.
  3. You can adjust your life so you can get back to making the contractual payment.
  4. You might want to consider a Chapter 13 bankruptcy to stop from being sued but that’s probably not the best option in the list here.
See also  I'm a Single Parent With a Child That Had Cancer. I'm Drowning in Medical Debt and Student Loans. - Star


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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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