I was served | TheaterFire

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miilkbox@reddit

My situation is very similar to yours. Graduated 2019, Sallie Mae private loans went into collections around 2021, was served a lawsuit by the collection agency late 2023. I've spoken to a few bankruptcy attorneys and they recommended to file a chapter 7. They seemed fairly confident I would be able to discharge them. I have roughly over $120k.

Filing gets rid of the lawsuit while we work to try and discharge them. I'll be meeting again with my attorney this week to continue the process. Definitely speak with an attorney to know your options. You're not alone.

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stevejohnson007@reddit

Please keep us posted brother.

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miilkbox@reddit

Update: Spoke with my attorney. He said for private student loans to be discharged in my case, there's two requirements, but I only need to meet one:

I'd need to not have been a taxpayer when the loans were taken out
I've taken out more loans than the overall cost of attendance

When I was in college, I didn't work those years due to being extremely busy with school work, so I'm eligible for option 1.

Attorney had also stated that if these requirements weren't met, then I could go for an adversary proceeding. He confidently confirmed that this process is fairly successful and discharges private student loans 99% of the time. Another user in this thread provided useful information on this as well.

I hope this information helps. If anything changes or I learn anything new, I'll share and update.

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hlaiie@reddit

Can you elaborate on 1? I’m not and haven’t been a taxpayer when I took out my loans. I googled and couldn’t find anything on that.

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Effective-Plum6759@reddit

What state are you in? In NY and trying to see if this can apply to me

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miilkbox@reddit

I'm in FL. Definitely speak with a bankruptcy attorney to know your options and protections for your state.

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SavagePlatypus76@reddit

So if you worked part time in college option one won't work?

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stevejohnson007@reddit

Im reading every word my guy! Thank you very much for the information.

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miilkbox@reddit

Will do! I’ll post my update very soon

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THROWRA_goodtoknow76@reddit

What kind of attorney? Did you have to pay your attorney?

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Sensitive-Self-3803@reddit

They were discharged through chapter 7? That is the process I’m in now. Thanks!

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Living-Win-4359@reddit

What attorney and state? How much he or she charged?

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mollysmisfits@reddit

What is the name of your attorney?

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International-Mix326@reddit

I've always heard it's very rare for studnet loans to be discharged but I'm no lawyer. Good luck

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rharrow@reddit

I filed my Ch 7 bankruptcy last year, everything was discharged except for my private student loans. Student loans can only be discharged in extreme cases of financial hardship. Even then, it will be a long fight to maybe have them discharged. You’re more likely to have federal student loans discharged than private. Good luck

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Jhasten@reddit

Was gonna suggest this. I have filed Ch11 once in the past and noticed that it stops all collections for long enough to regroup and rebuild.

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Moneycome2me@reddit

If they sue you in pa, I don’t think they reinforce private student loans in court.

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MeasurementTrick7227@reddit

The first step is understanding what your state law requires…settlements can be had for 8–10% of principal. If you have assets….they will attach if you don’t show up to court…..if you live in a liberal state arbitration will be mandatory before you see a judge….Indiana ruling says debt buyers must be licensed as bill collector, many are not…..counter sue for violation of FDCPA…..also complain about tactics to CFPB on Debt Buyer and Sallie Mae…..Sallie can’t stand the heat

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Forward-Notice4025@reddit

Any updates?

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Tiny_Sea_3165@reddit

15 years of student loan collections. Do not get a judgment, you will be screwed. Don't waste your money on a lawyer. Navient/SallieMae will settle for 10% or less because private loans are straight garbage and free money for them. Who is your collection agency, I may have a contact for you :).

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Constant_Paint_9831@reddit

How do you get a settlement with Sallie Mae?

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5HEDEN@reddit

Hey man if you don’t mind I’m in a similar situation and a contact would be very helpful.

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Tiny_Sea_3165@reddit

Who is your collection agemcy?

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5HEDEN@reddit

LCS Capital

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vsandrei@reddit

Keep in mind that you can always move to New York, where sister-state judgments obtained by default can not be domesticated and the SOL on consumer debt including private student loans is now three years.

Your account was sold in April 2022, so you are likely very close to if not outright past the three year SOL in New York based on the date of last payment.

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frito_lay_@reddit

Hi there - just popping in to see if you could say more about the NY situation? My husband's loans are through Navient and taken out in Missouri, but he has been in default since 2021. Do you know if NY SOL on debt would apply if Navient came after him?

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vsandrei@reddit

Sending you a PM.

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Professional-Ring783@reddit

Fuck those people make sure they never get a penny.

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L-spykid2@reddit (OP)

that’s how we got here 😭

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UFmeetup@reddit

Any update?

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Ok_Skill_2725@reddit

Biden: student loan forgiveness for everyone!

*proceeds to raise interest rate

“Loan forgiveness for 4% of loan holders. Everyone else will pay enough interest to cover those forgivenesses”

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Adam_THX_1138@reddit

Are you not aware the president has no control on interest rates? The rates are set by the central bank which is, to some degree, a private entity.

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Sometimeswan@reddit

The President doesn't control interest rates.

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djt977@reddit

Were you still in graduate school while the account closed?

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L-spykid2@reddit (OP)

Yes, I made them aware I was in school and didn’t have money to pay them so they eventually closed the account and sold it to collections.

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Slipperytooterhorn@reddit

That’s ridiculous. First of all, you had a legitimate deferment, followed by Covid, and then re-enrolling in school. They should’ve allowed for another in-school deferment, so I’m shocked they’re already coming after you. Did you happen to default at some point between graduation and re-enrolling in grad school?

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L-spykid2@reddit (OP)

I’m assuming so. I graduated May 2020, enrolled in grad school starting summer 2021, so if payments began January 2021, I defaulted.

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capresesalad1985@reddit

So you might have a case a lawyer can stand on with that, I’m pretty sure most private loans have in school deferment options because I’ve had friends just keep taking 1-2 classes a semester to f over Sallie Mae.

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scandanavianfiddle@reddit

I have Navient private loans and have maxed out my in-school deferments so now they are charging me. $654/mo is the cheapest option, and on my $17k/yr grad student salary. :/ That they sued you in the position you’re in horrible.

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dannydelco@reddit

If they’ve been sold, I bet the Plaintiff is Rock Creek, or maybe Jefferson Capital or National Collegiate?

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vsandrei@reddit

Fuck Jefferson Capital Systems and all the other debt buyers (financial predators).

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TheToken_1@reddit

Get an attorney and fight it
Try to settle (if you have any money)
Bankruptcy

I’d say go for the attorney and fight it initially. Then while fighting see if they are willing to settle at a reasonable amount. And lastly if you lose the case, file bankruptcy immediately after.

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clutch23w@reddit

Bankruptcy is very difficult. There is a special petition that is required for student loans and I believe only 6 people have ever successfully made it work. (Slight exaggeration) https://finaid.org/questions/bankruptcy/ This may help. I know that current legislation may have made things easier.

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babywraith@reddit

I think what they're suggesting is filing bankruptcy after the court case ends, if they aren't able to settle or get a ruling in their favor. You would be able to file bankruptcy then, it's not technically trying to get student loans discharged at that point anymore.

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clutch23w@reddit

That is a bit different than what I've come to understand. The addition of student loans in bankruptcy filing is a separate, and conditional, event. I'm currently in the process. It doesn't happen after.

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babywraith@reddit

I'm not sure you understood what i was saying. And yes you're correct that hypothetically it's possible to get rid of student loans in bankruptcy, but it's incredible rare and difficult. If i recall correctly Biden backed the legislation exempting student loans from bankruptcy. I wish you luck in your endeavor, i know we are all hurting from having these predatory loans.

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AnyAssumption4707@reddit

Are you talking about an Adversary Proceeding to discharge private student loans in bankruptcy?

I know at least six people (personally, it’ll) who have succeeded in this so if that is what you’re referring to, I’d beg to differ on your numbers.

It can be expensive, but it is certainly possible to discharge private loans in BK.

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clutch23w@reddit

Yes, that's what I'm referring to. Yes, my numbers were an exaggeration. As I stated. Expensive, I am finding out how expensive... Cheers.

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heyjos@reddit

curious why you suggest bankruptcy? is that just to delay/force settlement?

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TheToken_1@reddit

If you’re talking about saying bankruptcy as an option in general, it’s because it’s an option.

As for me saying the basic plan with bankruptcy at the end. I say it because if all else fails and if you know you can’t pay it and won’t be able to for an extended period of time, then bankruptcy is you last ditch effort to resolve it. But filing in order to more so force a settlement could help also.

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vsandrei@reddit

As for me saying the basic plan with bankruptcy at the end. I say it because if all else fails and if you know you can’t pay it and won’t be able to for an extended period of time, then bankruptcy is you last ditch effort to resolve it. But filing in order to more so force a settlement could help also.

Or just move to New York state, which does not permit the domestication of sister-state judgments obtained by default and recently lowered its SOL for consumer debt (including private student loans) to three years.

Then, force a settlement.

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Usukidoll@reddit

Whoa...which state did this happen in?

Get an attorney. This also occured during the COVID-19 pandemic too...what the heck?

When did you first tapped into those private student loans? There's a 4 year deferment period from them before they demand repayment unless the borrower chose to repay during school .

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L-spykid2@reddit (OP)

In PA, the loans were taken out in summer 2017, to be used for that fall/spring. We chose to pay $25 a month for interest during school

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bandinoworld@reddit

Did ur family push you into school?

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lylesolomonesq@reddit

get an attorney.. or look for some settlement

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vsandrei@reddit

Sallie Mae account closed April 2022 and was sold. Now they after me

You can retain an attorney and fight if you wish.

That said, I want you to know that New York state recently lowered its Statute of Limitations on consumer debts (including private student loans) to three years, and New York state does not permit the domestication of sister-state judgments obtained by default. Instead, an entirely new civil suit would have to be brought against you there.

You could always change residency after the three-year mark. This would include getting a job with an employer only in New York state and switching to a bank account with a financial institution chartered in New York state.

Of course, IANAL, but I want you to know that there is hope and a way out.

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Basic-Barnacle-174@reddit

First, don’t panic. Second, find a lawyer specializing in student loan defaults. Do not default on the lawsuit.

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hamzach20k@reddit

Happened to me. every lawyer I spoke to wanted to charge me a lot to just settle. Ended up hiring a lawyer and then settled. Because if I didn’t they would have gotten judgement against me.