Get Out of Debt Guy

How Can I Get Rid of My Private Student Loans if I'm Disabled?

Posted September 2, 2014 12:34 p.m. EDT
Updated November 8, 2014 6:45 p.m. EST

Dear Steve,

I have had Federal and private student loans. I have Total & Permanent Disability discharge of the Federal loans. My private signature loans are with Sallie Mae. I have not been able to work forever. I have defaulted on the loans. I have not paid on the loans since Sept. 2010. The loans have been turned over to a debt collector. I have had some contact with the debt collector. I have gotten proof I, in fact, owe the loans I cannot repay.

Can you please tell me some of my options? I have read about Statute of Limitations. I have read they are applicable I have read they are not. Is it at all possible to get these loans discharged? Would it be possible for you to say where I go from here?



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Dear Wayne,

Thanks for writing in to me through the Huffington Post.

You've discovered the armpit of disability discharge when it comes to private student loans. The reality is private student loan lenders don't have to eliminate your loans just because you are totally disabled. Some will defer payments for a while but big deal. It's not like you are going to suddenly become un-totally disabled in 18 months.

If there was a ray on sunshine here it is something that you glanced by in your question.

A private student loan IS dischargeable in bankruptcy once it has passed the statute of limitations. In some states that can be just a few years or so of being delinquent.

The key here would be for you to meet with a local bankruptcy attorney who is licensed in your state and discuss a strategy to discharge your private student loans once the timing lines up. It will. You can.

You might want to ask the bankruptcy attorney to represent you in the interim and retain them (pay them) to write a letter to the lender to attempt to divert communications to your attorney while you execute your solution. And then you'll just have to patiently wait out the statute of limitations and make sure not to make a payment, promise to pay, or anything that might restart the clock in your state. Again, you need to discuss these triggers with an attorney licensed in your state.

The key message is there are options and solutions here. If you follow my advice you will be able to put this behind you and get back to focusing on making it through life and dealing with your other disability hurdles.

If you know anyone who is struggling with student loans, you may want to let them know about my free guide to dealing with problem student loans, it's right here.

Before I go, here are to tackle your issue.

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.