LA JOLLA, Calif., Sept. 30, 2014 /PRNewswire/ — If you are struggling to make your monthly payments on your federal student loan, there are a number of options available to you. Private student loans don't afford the same programs. Deferments or forbearances aren't an option if you have a stretch of unemployment or other financial hardship. These 3 facts will help to relieve your private student loan debt.
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1. Private student loans are unsecured debt. This is good news. Private student loans are treated like credit card debt, medical bills and personal loans, with the exception that you usually cannot discharge them in a bankruptcy absent an undue hardship. This status as unsecured debt means that, without a court-issued judgment against you, your home cannot be attached, your wages cannot be garnished, and your bank account cannot be levied upon to satisfy the debt.
2. You can be sued by your lender if you go into default in payment. If you are not paying your federal student loan, the US Department of Education has the right to garnish your wages. Private lenders do not. Their remedy is to file suit against you to obtain a judgment, which would allow them to collect on the judgment. There have been a significant number of lawsuits filed by National Collegiate Student Loan Trust (also known as National Collegiate Trust or NCT), Teri Loan Holdings, LLC and Educap, Inc. These are legitimate parties and the lawsuit should not be ignored. There are increased efforts on their part to have credible evidence of the debt and witnesses that are willing and able to testify at trial, if necessary. If you are served with a lawsuit, you should take immediate action by contacting an attorney that has a focus on settling private student loan debt. Otherwise, you risk a default judgment being entered against you for failing to file an answer to the lawsuit.
3. It is possible to negotiate with your lender to reduce your overall debt. Despite what you may hear from lenders when you talk to them, it is possible to negotiate a settlement for less than due on the account. Oftentimes, an experienced debt settlement attorney can successfully negotiate private student loans for as much as a 60% discount on the balance due, with the payments to be made over an extended term in most instances. The collectors have incentives to negotiate for the highest amount possible since they are usually getting a percentage as the fee. So don't put too much weight into their full balance offer if you call them. There are settlements to be had.
Daniel R. Gamez, an attorney focusing exclusively in debt settlement, is licensed to practice in all state and federal courts in California and Texas. Mr. Gamez owns and operates the Gamez Law Firm in La Jolla, CA. For more information, please contact Daniel Gamez at 858-217-5051, email or visit www.gamezlawfirm.com