I have been paying on these loans for about 11 years with 20+ years left. I am in my mid-30s and have not yet saved for retirement. The payments are about $800/month. The balances have never moved. I have no recollection of taking them out. These are private loans, not federal. Is there any help for me? Should I speak to a consumer rights attorney? I am not sure if I could pass the bankruptcy tests and I doubt I could shell out the kind of money it would cost to file an adversary petition. These loans have a variable interest rate and I am so afraid that the payment amount will increase I'll default one day, I'll get sued and not be notified, then I'll be arrested for being in "contempt of court" when I didn't even know about it. I have tried paying extra but when I do, they either send it back or will only pay on my interest, not my principle so they're trying to keep me from me from paying them off. Please tell me there is hope. I am exhausted. Any advice? I live in Arizona.
As you may have heard, most student loans are very difficult to get discharged in a bankruptcy. You have to show "undue hardship" in order to get them discharged, and that has proven to be an extremely high standard to meet. This applies to most student loans, including ones from a private lender. With that said, there are exceptions, particularly with private loans, but the devil is in the details--whether or not a private student loan might be dischargeable is a very complex issue that would require very careful examination of many factors. I would strongly recommend that you consult with a bankruptcy attorney who specializes in student loan issues.
I can give you some comfort about your fears of collection. If you ever default and get sued, the lender has to have you formally served with the complaint and a summons. If you keep your address up to date with the lender, there is no good reason why they should not be able to accomplish this personal service on you. In other words, it's unlikely that you would not be notified. Even if you somehow do not get notified, the worst that would happen would be that they would get a default judgment against you. You don't get arrested, as we no longer have "debtors' prisons."
