Options for private student loans if you are disabled:
Option One: Disability Discharges
Some private lenders offer options for disability discharges. Please check your policy. The rules may be similar as rules for federal disability discharges, but not exactly the same. For tips on how to approach discharges:
Option Two: Run Down the Clock
Private loans are private debt. You may find it helpful to learn the laws for private debt collections.
Private debt collectors cannot garnish your Social Security check and cannot take your Social Security money. They can hurt your credit rating in some cases. In other cases, they the time period for reporting may have already passed and they will not be able to report anything more.
If you have other kinds of income or assets, they may or may not be able to take this, depending on how what you own and the laws in your state.
If enough time passes, the debt will expire. If the loan is from a long time ago, it may already be expired. They will still call you and pretend you owe them money. Be careful what you say in this situation. Learn more about running down the clock:
- Top Ten Reasons to Stop Paying Unaffordable Private Student Loans
- How To Protect Your Social Security Check
- How to Respond to Debt Collectors
- Social Security & Debt Collection (NOLO)
- Social Security & Bank Accounts (Consumer Protection Financial Bureau)
- What Happens if I Don’t Pay Debt?
Option Three: Bankruptcy
Many people believe that it is not possible to get student loans discharged in bankruptcy. However, that is not always true!
I stopped paying my private student loans years ago. I was sick and had no income at that time. Now so many years have passed that the loans are expired. The zombie debt collectors still call me and even called my sister in another state, but we just hang up on them. I tell everyone: never talk to them or they will record you and use it to make your debt come back.” – NB
I am not on disability, but I have chronic illness and can only work a little. I discharged all my debt in bankruptcy, except they would not let me discharge this one private student loan. The court did not garnish my paycheck because I live below the poverty line. They just let the loan stay there, but did not make me pay it. I wrote the loan company a “cease and desist” letter and told them to stop calling me. They stopped completely! Then one time I tried to call them, and they said they weren’t allowed to talk to me anymore because of my letter. I have three more years to go, then the debt from that loan will expire. – LS
I thought I had no hope of getting private loans discharged. I had heard it was difficult. I went ahead and asked them for their policy on disability discharges and filled out the forms. It worked! All my loans were discharged. – SO
I contacted the student loan company and told them my story. They asked me to send proof of my diagnosis along with a form (filled out by my doctor) stating I could no longer work. It took about 3 months, but my loans were all excused. They will recheck financial status for the next three years. – DV