Get Out of Debt Guy

Struggling With Ovarian Cancer and Student Loans

Posted February 10, 2014

WRAL Reader Question

Dear Steve,

I have a National Collegiate Trust student loan in my name. I borrowed money in 2006 to send my grandson to a special private school in Tennessee for young men with drug problems (Three Springs).

He graduated from high school and was cured of drug abuse.

My financial status changed in 2011. I was diagnosed with Ovarian Cancer. I have been overwhelmed with medical bills and fighting to stay well. The student loans from National Collegiate Trust are constantly going into collections, I simply cannot keep up. I have tried to work out arrangements to no avail.

Can I file bankruptcy on this loan? It is not a federal loan. Can I make an offer of compromise to reduce the debt based on disability? I am on social security disability.

Thank-you for your help.


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Dear Deanna,

First off, please accept my virtual hug for your struggles with ovarian cancer. My mother dealt with it as well and it is a battle that is close to my heart.

At this point we need to prioritize things to give you the best chance of healing and a better quality of life. I certainly understand the stress and emotional strain being in collections can give you and that negatively impacts your health. You need all your emotional and physical strength to focus on your health. Nothing else is that important.

One lucky twist is in fact this particular private student loan debt may be easily discharged in bankruptcy. Based on the name of the facility you gave me it does not look like they are an accredited school and these types of loans can be easily discharged. For more on this read this article

I would suggest you use this directory to find a local bankruptcy attorney to talk to for free and get a review with a local attorney. 

Let's get things realigned here. The biggest mistake people make in similar situations is to putting too much priority on the debt and they drain precious assets only to never really resolve the situation.

You can certainly make a settlement offer but these are frequently not available for private student loans unless you are well into default. But if the loan can be dealt with in bankruptcy and that allows you to protect retirement money you need to make ends meet, then that is the most logical option.

Keep in mind bankruptcy is not immoral, it is just a financial and legal option available to people in tough situations.


Steve Rhode
WRAL Get Out of Debt Guy

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About this Blog:

Steve Rhode has had careers in opthalmology, real estate and as the head of a nonprofit debt counseling firm. On his blog, he offers hard-won, free advice about getting out of debt, consolidation and making the right choices as you manage your money.