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Defaulted Private Student Loans

Private Student Loan in Default? Here’s the Truth

When a private student loan goes into default, lenders and collectors often turn aggressive. You start getting threatening letters, your phone never stops ringing, and you might even get served with a lawsuit.

Here’s what most borrowers don’t realize: you still have legal rights, and the collector has limits. At Consumer Rights Law Firm PLLC, we hold collectors accountable and help borrowers stop the harassment while exploring real options for relief.

📞 Call 877-700-5790 now for a free case review. The sooner you act, the more control you keep.

What It Means to Default on a Private Student Loan

Private student loans don’t follow the same rules as federal loans. Once you miss several payments (typically three or more months), your lender can declare the loan in default. That means:

  1. The entire balance becomes immediately due

  2. The lender can send your account to a collection agency or law firm

  3. Interest and late fees keep stacking up

  4. You may be sued in state court for the full balance

  5. Collectors can harass or threaten you to pressure payment

Defaulting on a private loan can wreck your credit, lead to a judgment, and even wage garnishment — but only after a court order.

That’s where we step in. We fight back against unfair collection practices and help you avoid costly legal mistakes.

How Private Student Loan Collections Work

Private lenders don’t have the government’s power to garnish your wages or seize tax refunds without a court order. So instead, they use pressure tactics. You might see:

  1. Daily or repeated phone calls

  2. Threatening letters claiming they’ll sue “immediately”

  3. Third-party calls to your relatives or employer

  4. Collectors posing as law firms to scare you into paying

All of that is governed by the Fair Debt Collection Practices Act (FDCPA). That law makes it illegal for collectors to harass, threaten, or misrepresent what they can actually do.

If they cross the line, you can sue them — and we can help.

Your Options After Default

Here’s what you can actually do when your private student loan is in default:

Negotiate a Settlement

Most private lenders will settle for less than the full amount, often between 40% and 70% depending on the lender and the age of the debt. A strong legal advocate can negotiate on your behalf and document the deal to protect you from future claims.
Good if you can bring a lump sum or short-term payment plan.

Defend a Lawsuit

If you’ve been sued, do not ignore it. Many borrowers lose automatically because they fail to respond. Our firm can review the complaint, file your response, and often challenge the lender’s proof or ownership of the debt.
Good if you’re already in litigation or just received a summons.

Refinance or Restructure

Some lenders will allow a new agreement after default if you can show income and stability. It’s rare but possible.
Good if you can demonstrate financial improvement.

Bankruptcy (in limited cases)

Student loans are tough to discharge, but in certain extreme cases involving hardship, fraud, or predatory lending, you may qualify. The laws are evolving, and courts are increasingly open to reviewing student loan hardship cases.
Good if you have major financial hardship or multiple debts.

Don’t Fall for Collector Scare Tactics

Collectors rely on fear. Here are some of their favorite lies — and the truth behind them:

  1. “We’ll have you arrested.”
    Debt is not a crime. Arrest threats are illegal.
  2. “We can take your house or car immediately.”
    Only after a court judgment — and even then, exemptions apply.
  3. “We’ll ruin your credit forever.”
    Defaults hurt, but with smart moves and time, credit can recover.
  4. “We are calling on behalf of your original lender.”
    Many collectors lie about who owns the loan. Always demand written proof.

If you hear any of this, take notes and call us right away at 877-700-5790.

How We Can Help

At Consumer Rights Law Firm PLLC, our attorneys know the playbook collectors use. We can:

  1. Stop harassing calls and letters

  2. Validate the debt and verify ownership

  3. Negotiate settlements for less than what’s claimed

  4. Defend you against lawsuits

  5. Pursue damages if your rights are violated

We only get paid if we recover for you in harassment cases. You have nothing to lose by calling.

Document Everything

Start building your case now. Keep:

  1. A written log of every call (date, time, caller name, and what was said)

  2. Screenshots of call histories and texts

  3. Copies of all letters or emails

  4. Court notices or lawsuit papers

These records can make the difference between winning and losing.

When You Might Be Sued

Private student loan lenders can and do file lawsuits. Once you’re served, the clock starts ticking — usually 20 to 30 days to respond. Ignore it, and they win by default.

If you’re being sued, call us immediately. We’ll check whether the lender can even prove they own the debt and whether the lawsuit complies with your state’s collection laws.

Results That Matter

Our clients have successfully:

  1. Stopped illegal collection calls
  2. Settled defaulted loans for thousands less than claimed
  3. Avoided wage garnishment after judgment
  4. Won cases against abusive collectors under the FDCPA

When collectors go too far, we push back hard.

Why Borrowers Choose Consumer Rights Law Firm PLLC

  1. Over 15 years of consumer protection experience

  2. Deep knowledge of FDCPA, FCRA, and state collection laws

  3. No-nonsense approach — real solutions, not scare tactics

  4. Free consultations and contingency options in harassment cases

📞 Call us at 877-700-5790 or use the quick form on this page to start your free case review today.

Frequently Asked Questions

Yes. Private lenders must sue before garnishing wages or taking property. You can fight back and often win if they lack proper proof.
Yes, most private lenders will negotiate if you’re in default and have lump-sum funds or a payment plan.
That’s harassment and violates the FDCPA. You may be entitled to damages.
After settlement or payment, you can negotiate a “paid” status and begin rebuilding credit.

If you’re facing harassment, threats, or a lawsuit over a private student loan, don’t go it alone. The longer you wait, the fewer options you’ll have.

877-700-5790
Free Confidential Review

What to Bring to Your Free Review

  1. Most recent collection letter or court document

  2. Copies of all emails or voicemails from collectors

  3. Screenshot of call logs

  4. Loan documents, if available

We’ll analyze your options and tell you where you stand in plain English.

Legal Disclaimer

This page is for informational purposes only and does not constitute legal advice. Contacting Consumer Rights Law Firm PLLC does not create an attorney-client relationship. Results vary based on the facts of each case. For legal advice tailored to your situation, call 877-700-5790.

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