If you’re facing legal action due to outstanding private student loans, it might serve as some small comfort to know that you’re not alone. Thanks to the current state of the private student loan industry, a good number of students who took out loans in order to go to school are now finding that the reward for all the hard work they put in is life under a cloud of harassing bill collectors and the constant threat of a costly lawsuit by a collection agency.
Because they know that their clients are in no position to fight back, many private lending firms are all too willing to take them to court as a means to collect whatever they can, fully aware of the fact that their actions will leave the person completely destitute and with no way to make a living. It has become increasingly clear over the past several years that the laws governing the student loan industry are heavily stacked against the students and are designed to give the lenders an alarming level of power over them.
In one case, a graduate who filed for bankruptcy specifically for the purpose of focusing all of their energy on repaying their student loans was horrified to discover that the filing resulted in their private loans automatically going into default and becoming due in full. Their loan was sold to a pair of collection agencies and their monthly payments tripled, which canceled out any relief that they found from their bankruptcy. Worse yet, they were routinely threatened by one of the agencies with legal action to garnish 50% of their wages. This type of situation is precisely the reason that the student loan industry is in such dire need of a major overhaul by the federal government.
Too many former students are being forced to work two or three jobs just so that they can make the minimum payment on their student loans and avoid legal action that could very well destroy their financial reputation for years to come. The fear and financial strain that they are living under creates undue stress and hardship and makes it impossible for them to live normally or save for their future. It simply isn’t healthy for any society’s future when an entire generation of college graduates feels as though getting their degree was the worst financial decision they ever made, and they are 100% right.
If you feel you were defrauded by the school you attended or you are being treated poorly as a distressed borrower by your creditors, take the free challenge debt review to find out what options you have regarding your student loans.