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What Choices Do I Really Have to Deal With My Private Student Loans?

Written by Steve Rhode


Dear Steve,

About 12,000 debt in private school loans. Haven’t been able to make the payment for years. Have used all my forbearances and deferments possible and now am at the point where they are threatening to garnish my wages. Default status I guess has already been placed. I went bankrupt about 4 or 5 years ago now and the student loan was not cleared with my chapter selection. They are requesting an 800 dollar a month payment to keep from garnishing my wages.

What choices do I have other than the $800 dollar a month payment or the garnishment if any? I couldn’t really afford the $100 dollars they wanted a month, $800 would put me on the street.



Dear Aaron,

I completely understand how you feel backed into an impossible corner. It is always frustrating when the lender wants X and you can only afford Y. You are clearly at an impasse.

One of the benefits of federal loans is they offer an income driven repayment plan, even as imperfect as it is.

Private lenders are not required to offer any such plan. The whole forbearance approach just simply makes your already unaffordable balance grow bigger. Not a great option.

I remember I once had a credit card that sent me a notice and congratulated me and offered me a payment holiday to skip paying for a month, but continued to charge interest and increase the balance. Not such a great offer for the person but awesome for the bank.

If you have been in default for years, then depending on what state you live in. Let’s use the state of Washington as an example. It appears the state has a six-year limit on debt collection actions. But let me be 100 percent clear, I am not an attorney, you would absolutely need to discuss this with an attorney who is licensed in whatever state you live in. One place to find an attorney is through

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Having a debt outside the statute of limitations does not prevent you from being sued or collections attempted, it allows you to raise it as a defense if you are sued.

Let’s say you are sued in an effort to win a judgment against you and go for garnishing your wages. Being sued isn’t the worst possible outcome here. What is the worst would be to ignore the suit.


The reality is if you are sued it is an opportunity to settle the debt or work for a better repayment plan. See Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan.

The key here is you should really hire an experienced attorney or third-party to represent you. People often make the worst negotiators since they don’t know what deals the lender typically takes. As an example of one such law firm that takes on a lot of these cases, look here at the results.

The only reason the situation might feel hopeless at the moment is because you are in a reactive mode rather than a proactive mode. You are waiting for something to happen instead of working to come up with a plan in advance to deal with your options.

Knowledge is truly power.

You can do this!


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

About the author

Steve Rhode

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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