Defaulted Private Student Loans

You do not have options when it comes to private student loans. When you got the calls a year ago, that was the time to be taking action, not now. You wont be able to consolidate or refinance with these on your credit and they will sue you...those are not empty threats.

Based on a 7% interest rate, your interest alone is probably running close to $300 per month.

I didn't have a job a year ago. I got out of college and was unemployed for a year.

Are you saying I should just tell them to go ahead and sue me, because I have no options? Wouldn't that mean I'd be working for nothing for most of my life? I assume they are going to take most of my paycheck until I am paid up and probably charge even more interest. That is just going to cause me to default on all of my other student loans. What the heck am I supposed to do?

These are the risks you take when you borrow private student loans...it is why I have always recommended NOT borrowing them unless absolutely necessary or as little as humanly possible, even if that means changing schools or going part time.

That being said, once in default you don't have any options. A year ago you might have been able to swing a forebarance but now it is too late. Yes interest will continue to accrue as with any other loan. The max they can garnish you in most states is 25%.

Did you have a cosignor??

No, I have no cosigner. The person who called had suggested getting a loan to cover this debt with a cosigner, but that doesn't sound like a much better plan and I doubt anyone would give me a loan at all.

Also my parents have terrible credit, so I told them that wouldn't work anyway.

First off, Do not blame yourself for this predicament you are in! There are millions of Americans who are in the same boat as you who are saddled with these toxic private student loans. We are in the midst of a student loan bubble, just like we were recently with the real estate bubble. DO NOT REFINANCE AND GET A COSIGNER!!!! You are very lucky you don't have a cosignor on your private student loans! Most people do. Do not allow these loan sharks to get their teeth into more flesh.
I would advise you to consider bankruptcy down the road. This week a private loan bankruptcy bill made it out of committee and will hopefully be voted on soon by Congress. Until a bill passes (it is only a matter of time since the havoc these loans are causing can only continue for so much longer), I would consider looking into finding employment in nongarnishment states (NC, SC, Texas, PA). I wish you the best!

Why shouldnt the borrower blame themselves?? How do you "overlook" $50k in student loans??? They got the pre default calls a year ago...did the borrower think they were going to go away? This is another prime example of poor choices by a borrower....probably attending a school they could not afford.

Sure congress is considering revising bankruptcy...however their will be tight restraints so we dont slide back to the the pre 1998 abuses. Back then, every law student could tell you the date the could file bankruptcy on their student loans. Any bankruptcy measures will require that you be 5-7 since the loan became due which is going to cause private loans to sue much faster...you default, they will sue almost immediately and get their 5-7 years of garnishments/levies until the borrower is eligible to file bankruptcy.

5 years is better than being garnished for life! Plus it takes a year before officially defaultng and getting a judgement to take effect...which brings that down to 4 years. By the way, it is a myth spun by lenders that law and med school grads were bankrupting their loans in droves back in the 70's. Less than 1% did such a thing. Also, watch undercover video from the recent GAO report which revealed high pressure admission tactics and outright lies to applicants to get them to sign their lives away. Or how about recruiters going to homeless shelters to find warm bodies to fill classrooms? It takes two to tango.

Private loans only take 6 months to default.

You are mixing up facts for private and federal loans. And it was way more than 1% who filed on their loans.

Another prevision that they will write into the bankrucpty code for federal loans will have something to do with affording the ICR/IBR repayment plan ....there will be many loopholes....it will not just be a blanket filing.

I am not talking about federal student loans. They have perfectly reasonable repayment plans which include IBR/ICR. It is private student loans that is the focus of this thread. I said it would take a year minimum for garnishment to start on a private loan. 6 months to default plus several months to sue, obtain a judgement, and impose a garnishment order- so about a year minimum for a highly aggressive lender.

http://www.aacrao.org/transcript/index.cfm?fuseaction=show_view&doc_id=4790

According to the Chronicle of Higher Education, the bill faces long odds for a final passage. Many Republicans oppose the measure, warning that it would drive up interest rates and further shrink the market for private loans. Additionally, the congressional legislative session has only four weeks before the House's target date to adjourn.

Every school is a school I couldn't afford...and believe me I wish I never went to college, it was a pretty huge waste of time (I did not party or anything, I just did my work and basically learned nothing I didn't already learn in vocational school).

I remember asking for forbearance at one point, but they denied my request for it (although they accepted it for another loan...). At that point I still had no job so I was basically SOL.

Anyway, I already knew bankruptcy wasn't an option. What about requesting debt validation? I think part of the reason I am so confused about this debt is that it has changed hands multiple times. I do not recognize the bank name so I was thinking that getting all of this information would be helpful. What does debt validation actually accomplish?

Is it just a way to delay the process, or is it that I'm hoping they lost my paperwork in a fire or something?

I think debt validation would be a waste of your time and would just piss off your lender more, frankly. It's a student loan. You know you owe it. You're going to have to pay it one way or another. Have you called and tried to negotiate repayment with the lender? You may have to get a part time job so you have extra income to pay on this loan.

Community colleges are affordable...they do not require $50k in private loans. Staffords would have easily paid for them. A lot of people attend them for the 1st 2 years and then transfer to a state school to get their degree.

Campus Door...found this

CampusDoor Student Loan Support Center
Borrowers with in-school private loans from CampusDoor can manage their loans online.
Phone
866-930-1543

Fax 800-558-8104

Address CampusDoor
P.O. Box 10
Carlisle, PA 17013

Link CampusDoor



CampusDoor Loan Servicing
CampusDoor loans are serviced by American Education Services (AES). They handle the billing (statement) and payments for CampusDoor loans. Any payments or payment questions should be addressed to AES. You may make payments to interest and principal while you are in school with no penalties.

Phone
800-233-0557

Address AES
American Education Services
P.O. Box 8155
Harrisburg, PA 17105-8155

www.aessuccess.org
Sure you can request a DV...it is not likely it is lost. But as the above poster said, it is likely to piss them off and could result in a law suit sooner. Campus Door originated in 1995 and docs since then have pretty much been digital.

I know I owe it, but I'm not getting calls from a collection agency. I haven't received one of those for these loan for at least a year...

A law firm is calling me, and I am just a little confused about what I should be doing at this point. I would have been making payments for the last 6 months if they would let me.

I just don't know what to expect as far as court is concerned. Do I actually have to go to court somewhere, or how does this work? Should I hire a lawyer? If I should then I assume I'll need the paperwork from the loan company anyway so I should probably send the letter.

I don't think I could afford a lawyer, but I just need to know what I should do.

The law firm is likely acting as a collection agency on behalf of your creditor. Call your original creditor and ask them who is collecting on your defaulted loan. If the attorney will still allow it, SET UP PAYMENT ARRANGEMENTS! You don't want to have your wages garnished or have a judgment against you if you can avoid it.

Correct....law firms routinely take over the collections of defaults. Unfortunatley, even if you are making payments, you will still likely be sued. It is routine with privates due to the balance in full on demand clause in the prom note upon default.

there is definitely growing sentiment to allow private student loans to be dischargeable again in bankruptcy. It is only a matter of time before this happens since we are reaching crisis levels with over 200 billion currently outstanding:

http://moneywatch.bnet.com/investing/blog/make-money/student-loans-time-to-reform-the-law-that-treats-debtors-like-crooks/492/

Quote from the article....
Quote:

It sounds like your loan was assumed by a debt collection mill even though it seems to come from an attorney. They might have bought the loans for pennies on the dollar. They might not even have the documentation. I have some experience to share that might be useful. Could you contact me?

FYI....with private loans even if you are making payments, they will end up suing. It pretty standard.

I am trying to contact daemosorestai, pls respond I think I have some useful information in regard to the lender you had mentioned.

Acknowledging that you have the debt is the first step to working it out. Contact the law school closest to your home and the local Bar Association or closest court of competent jurisdiction. They should have either a pro-bono section or access to a listing of attorneys who can give you advice for free. At least you will have some legal advice to make an informed decision - before you pay for an expensive attorney.

Student loans are a matter of contract law....paying for an attorney isnt going to do much for you. The terms are very clear. All an attorney is going to tell you to do is pay it.