How Can I Eliminate My Private Student Loans?

Dear Steve,

Got some private student loans in 2005-2006 for a degree that was way too expensive for the type of job you could get with it. Stupidity and ignorance on my part.

I have struggled ever since to make payments, and most of the time decided against it because the monthly payment was close to $800. It has defaulted and is currently in collections. I have received a letter stating that they will settle for a certain amount (I owe $106,945.77, they will settle for $85,556.62.) I have trouble even typing that without laughing, they might as well ask for the whole hundred grand.

I'm not sure what to do next. I filed bankruptcy (Chapter 7) in 2009 on some credit card debt I had, but the lawyer wouldn't touch any of the student debt.

I read an article you wrote that said that private loans are still dischargeable in bankruptcy, but my lawyer wouldn't even try in 2009 when I filed Chapter 7 on credit card debt. Also, shouldn't they have gone into default when I filed bankruptcy? I'm very confused on everything. Any help would be greatly appreciated.


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Dear Nicole,

There are a few articles I've written on this subject that shed a lot of light on the dischargeability of private student loans. You can find them here, here, here, and here. I would advise any reader wanting to know more about eliminating student loans in bankruptcy to read those articles.

Here is the bottom line, when you filed bankruptcy your bankruptcy attorney may have been under the common misperception there is nothing that can be accomplished with student loans in bankruptcy. For some loans and situations that is true. But a factual look at real bankruptcy cases shows many do actually discharge their student loans in bankruptcy or get them significantly reduced.

The key here is to find the right person to help you who has some experience in this area. It's a new specialized field of bankruptcy assistance and I agree it takes some time to find the right person to help.

But just because you filed bankruptcy in 2009 does not mean there isn't still something that can be done. I'm watching more bankruptcy attorneys now going back to those old cases and filing adversary proceedings to tackle the student loan issue.

I'd absolutely love to tell you there is one place to click to find the right attorney to help you but the numbers of experienced bankruptcy attorney practitioners who deal with student loans is still small and you'd need to connect with one licensed in your state.

What seems to make more logical sense at this point would be for you to speak to a knowledgeable debt expert I trust, get your specific situation evaluated, and then get help from that professional to connect you with an experienced attorney in your state who might just be able to make a difference here. To get that ball rolling, click here.

When it comes to dealing with student loans today the only fact that is a given is most people and professionals have no clue about what can be really accomplished with the right intervention.

Don't give up yet.

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