“Dear Steve,
I have private student loans with University of Phoenix. I was able to pay off one of the loans however due to my low income I have not been able to make any payments on the outstanding ones.
I am several months behind and I do not see the situation getting any better. I talked to a lawyer who told me it would cost me a lot to include the loans on a bankruptcy and it may not even get solved. What do you suggest? Please help!
Eloise”
Dear Eloise,
You have a number of issues not on your side here. First off, for-profit college tuition is one of the most expensive you can incur.
Second, private student lenders are not required to make any allowances for affordable payments like federal student loans do.
Third, finding an attorney to represent you in an adversary proceeding in conjunction with a bankruptcy is a matter of being a smart consumer and shopping around. All lawyers don’t charge the same price.
Dealing with and discharging Sallie Mae student loans is possible, I’ve written about specific cases before.
I understand it might be an expensive process but surely it is less expensive than the cost of the remaining loans. Legal solutions don’t come cheap.
And then there is one last option that is more controversial, but possible. If Sallie Mae is unwilling to modify your payments, you can absolutely not afford them, and bankruptcy is off the table, then your last option is to stop paying and default. It will hurt your credit and you can be sued eventually.
However, if you find an attorney who is experienced in dealing with student loan issues and they are licensed in your state, they could run interference for you and hopefully buy enough time to get the loans past the statute of limitations and thus fully and easily dischargeable in bankruptcy.
It’s an option, not a perfect option.

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