If you have a Private Loan, other than the usury laws of your state, there are no interest rate caps on private loans like there are for federally backed student loans, but there are time restrictions in which they have to enforce their collection efforts. Since the Truth in Lending Act (TILA) governs private loans, a fundamental way to tell a private loan from a Federal loan is the presence of disclosures, like you’d find on credit card, car loan, or mortgage loan statement. Privately funded loans do not typically have many repayment options available like federally backed loans, and qualification is determined on a bank-by-bank and loan-by-loan basis. On the positive side, if you are delinquent with your payments, private student loans can typically be settled for less than the current amount owed, potentially saving you thousands of dollars.

Sallie Mae seems like a Federal agency, but, it is a private lender and by far the nations largest. On October 13, 2014, Sallie Mae, split up into two different entities – one that handles servicing of federal loans, named Navient, and the other division remained Sallie Mae, which now strictly provides private student loans.

Most of the loans issued since 2010 are straight from the government through the “Direct Loan Program.” Any Direct Loan is without a doubt federally backed. Before 2010, many loans given by private lenders are still guaranteed by the federal government, making them federally backed as well. Federal loans are typically named either Direct Loans, Stafford Loans, PLUS loans, or Perkins loans.

If your student loan was taken out from a private bank but is backed by the federal government, it doesn’t mean upon default that the loan will be paid off for you by the government, thus relinquishing you of your responsibility to pay. What would happen is if you default, the federal government will pay off the bank, then you would owe the money to the federal government instead. In other words – YOUR LENDER IS PROTECTED, BUT YOU ARE NOT.

The government has virtually no limits to how they can try to collect what they are owed. Their collection efforts do not even require court orders. They can:

• put a lien on your property
• levy your bank accounts
• take up to 15% of your disposable pay wage garnishments
• take tax refunds known as “Tax Offsets,” and,
• take some types of Social Security known as “Federal Benefit Offsets.”
• All this while charging substantial collections fees with no time restrictions imposed upon them!

If you are struggling to pay your federally backed loans, thankfully, there are many different consolidation and relief programs available to help you. Although federally backed loans are not likely to accept a settlement for less than the amount owed, there are ways, in limited situations, to discharge federally backed loans in some instances – without filing for bankruptcy.

Do You Have BOTH Federally Backed & Private Loans?

Since there are different options available for each type of loans, if you have both private and federally backed student loans, we typically advise starting to deal with the loans that are causing the most significant burden for you, but rest assured, we can help with both private and federally backed loans!

Once retained, we immediately contact your lender, their servicer, or attorney to let them know of our representation and request all calls and correspondence be directed towards our office rather than to you. This way you’ll spend less time dealing with or hiding from anyone trying to collect from you and can get back to running your life.

Once we take over the collection activity, we inform your lender of your situation and, depending on which process you retain us for, will begin to negotiate on your behalf to either lower your rates, extend the terms of your current agreements, reduce your mortgage down to less than what you owe, or try to cancel or discharge the loans.

Sometimes we need to get right down to negotiations and while others we need to stall to buy time for you to accumulate funds to use for later on. Sometimes we can negotiate politely and others we need to play hardball.

We know which tactics work and which ones don’t. We know when to call, who to call, what to say, and more importantly what not to say…all to save you as much money as possible!

Once we are satisfied with a potential negotiated offer, we contact you to discuss the terms and conditions. All of our negotiation options, except for Chapter 7 or 11 Bankruptcy, offer you complete control and the final say as to whether or not you want to accept.

Only if you want to accept the offer will all details be obtained in writing and reviewed by a lawyer to make sure that the terms of the release are drafted properly.  If so, it would be sent to you with step by step instructions to ensure the arrangement is paid off properly.

We have successfully defended many clients and were able successfully and permanently resolve their student loan issues.  It is always best to deal with a lawsuit as soon as you are aware of it.  Depending on where you live, you have only 20-35 days to file a written answer with the courts.  Unless you have done this numerous times on your own in the past, this is something you should not use trial and error with, as there is little room for error.  One of our experienced lawyers will become your “Attorney of Record” and will file an answer for you to ensure your defenses are adequately raised.  We will keep up to date with anything going on so you will not miss a beat.

Even if you were sued a long time ago and are now wanting to take action, we can help.  If a judgment has been entered against you, and even if you there is a sale date set just around the corner – we can still help.   We can file an “Order to Show Cause” on your behalf to and buy us time to review for any violations, file appeals, apply for repayment, etc.

If Your Loan Is Being Serviced by a Third-Party there may have been violations of the Fair Debt Collection Practices Act (FDCPA) which can lead to lawsuits in your favor.  Any violations by your loan servicer can lead to you winning up to $1000 per violation.  A Student Loan Attorney that also handles FDCPA law will know how to spot these violations and will be able to help put money in your pocket.

Being that we are debt attorneys, if all else fails, we can even help file for bankruptcy to try to fix your student loan problems.  We will do whatever it takes to assist you in these difficult times!