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Defaulted Student Loans

Student loans are becoming a serious problem for those who choose to attend secondary education and further advance their career. Unfortunately, consumers are often lured in or forced to sign private student loans with incredibly high interest rates or get stuck dealing with debt collectors when their student loans are sold off.

Furthermore, the interest on these loans can make repayment impossible and keep the consumer, or co-signer, in a financial hardship for years! Fortunately, if you are struggling with these issues, Fields Law Firm can help.

There is no out-of-pocket cost to you when hiring a Consumer Law attorney at Fields Law Firm. We offer free initial consultations and our work is done on a contingency fee basis, which means that we advance all your case costs and you do not owe any money for attorney fees or costs unless we win your case.

Most importantly, the Fair Debt Collection Practices Act (FDCPA) requires violators to pay successful plaintiffs’ attorney fees. Therefore, we only get paid if we win and when we win, we get paid by the party who violated the law.

What Is The Difference Between Federal and Private Student Loans?

First, Federal student loans are unforgiving, and it is generally a good practice to resolve any issues directly with the servicer. Second, federal student loans do not have a statute of limitations. Third, and most importantly, if your federal student loans are in default, the Department of Education can refer your account to the Department of Treasury for collection by an offset of your federal tax returns. The Department of the Treasury also has the authority to withhold the entire amount of your tax refund to satisfy any amounts owed on the debt.

If you are being sued regarding a federal student loan you may be able to present the following defenses:

  • The creditor is suing you for the incorrect amount
  • The debt is actually current and not owed
  • That you never agreed to pay the loan (someone has stolen your identity)
  • The debt has been discharged through bankruptcy
  • The amount sought includes fees that are not allowed (ludicrous attorney fees or collection charges)

On the other hand, private student loans are a much easier debt to deal with. Private student loans are issued by private institutions, such as Wells Fargo, Sally Mae, and Discover Bank, and as such, follow the same rules as other consumer debts, such as:

  • They follow a 6-year statute of limitations to collect
  • The creditor, or debt collector, must sue you to collect the debt, they cannot garnish your taxes
  • Debt Collectors need to follow the law under the Fair Debt Collection Practice Act
  • This debt can be negotiated and settled by a skilled attorney
  • This debt can be discharged through a bankruptcy

Student Loan Options: The difference between federal and private student loans

Federal Student Loans

  • Require completion of the Free Application for Federal Student Aid (“FAFSA”) to apply
  • No co-signers are required
  • Provide more flexibility in repayment options in case of financial hardship
  • Can be put into deferment or forbearance, which allows borrowers to temporarily stop making payments
  • Have fixed interest rates
  • Interest rates set based on loan type
  • Interest on some federal loans is subsidized while you’re in school, which means the government pays the interest while you’re in school and you aren’t responsible for the interest until after you graduate
  • There are limits on the amount one can borrow
  • Government can take portion of your wages and tax refunds if you fail to meet repayment requirements
  • Possibility for debt forgiveness for teaching, military service, and other public service work
  • Federal loan options: Perkins Loans, Direct Loans, Parent or Grad PLUS Loans

Private Student Loans

  • Do not require completion of the FAFSA to apply
  • Variable interest rates, meaning interest and cost of borrowing can increase
  • Interest rates based on your credit score and other factors, so if you shop around and can show ability to repay, may find low interest rates
  • May require a parent to co-sign since college-aged students have yet to build credit
  • Good option for obtaining additional funding once you have reached your federal loan limit
  • Not restricted based on financial need as some federal loans
  • Offer little flexibility if having trouble making your payments; fewer options regarding when and how much you repay
  • Private loan options: State Agency Loans, Traditional Bank Loans, or School Loans (from your college/university)

When is my student loan considered in default?

Federal Student Loan: After 270 days of non-payment
Private Student Loan: After 120 days of non-payment

What are the consequences of default?

Federal Student Loan

  • The federal government can garnish your wages without getting a court order
  • Can only garnish up to 15% of your disposable income
  • The creditor (typically the Department of Education) may send your account to a collection agency. The debt collector can charge collection fees in addition to what you already owe on the student loan. Collection fees for federal loans can be between 18%-40% of the loan balance.

Private Student Loan

  • Private lenders will seek repayment from co-signers on the loan as soon as payment is late, they are not required to wait until the primary borrower is in default
  • The creditor may send your account to a collection agency. The amount the debt collector can charge in collection fees in addition to what you already owe on the student loan is set by your promissory note, the contract governing your student loan.

Do I Have Any Recourse If I Think A Debt Collector Has Violated The Law?

Yes. You have the right to sue a collector in a state or federal court within one year from the date of the legal violation. If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000.00 in statutory damages, even if you can’t prove that you suffered actual damages.

You also can be reimbursed for your attorney’s fees and court costs. A group of people also may sue a debt collector as part of a class action lawsuit and recover money for damages up to $500,000.00, or one percent of the collector’s net worth, whichever amount is lower. Even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it.

What Should I Do If A Debt Collector Sues Me?

First, contact Fields Law Firm and speak with a Consumer Law attorney about your legal rights. Second, respond to the lawsuit, either personally or through your lawyer, by the date specified in the court papers to preserve your rights.

What Should I Do If I Am Being Harassed By Debt Collectors or Being Pursued For A Debt That I Do Not Owe?

The first thing you should do if you are being harassed by debt collectors or being pursued for a debt that you do not owe is contact Fields Law Firm and speak with a Consumer Law attorney about your legal rights. Our attorneys will review your situation, answer your questions, and help you understand your legal options.

If you are dealing with a defaulted student loan and a debt collector is contacting you, Fields Law Firm can help you stand up for your rights and assist you. Contact one of Fields Law’s Consumer Law attorneys for a free consultation and see how we can help you!

SETTLEMENTS AND RECOVERIES IN ALL CASES DEPEND ON SPECIFIC FACTUAL AND LEGAL CIRCUMSTANCES WHICH ARE UNIQUE TO EACH CLIENT’S CASE. PAST CASE RESULTS ARE NOT A GUARANTEE OR PREDICTION OF SIMILAR RESULTS IN FUTURE CASES WHICH THE FIELDS LAW FIRM AND ITS LAWYERS MAY UNDERTAKE.

READ OUR CLIENT REVIEWS

John Kelley
John Kelley
21:38 16 Oct 18
I was having issues with an insurance company and I hired fields law firm. The people there are amazing and always quick to answer questions even a couple times on the weekend. I worked with Blake amazing person and very informative on my case. I would highly recommend this firm to any of my friends.read more
Michael Frazier
Michael Frazier
23:58 10 Oct 18
I had the pleasure to work with Michael and Annie on my LTD case. When my claim was denied by the insurance carrier, Michael didn't hesitate to take them on with an appeal. He worked diligently on the appeal and ultimately won this for me. Mind you, this wasn't a huge case but he treated me like it was and as if I was the only case he was representing. He kept me abreast of vital information, it was clear that he knew his stuff and wasn't afraid to take on the big insurance company. Michael was much more than I ever expected given that our relationship was entirely remote, handled by telephone and email only. Not only is he a strong lawyer, he treated me with compassion and respect. I am beyond pleased with him and the Fields Law team. Michael cares about his clients and he gets the job done for them because he knows how impactful an injury can be to both a person's well-being and their financial security. I highly recommend Michael and Fields Law whether you are local to their Minnesota offices or out of state like myself.read more
Melanie Eason
Melanie Eason
20:12 29 Aug 18
Fields Law Firm is great. Patrick Kramer, my lawyer, is fantastic. He and his legal assistant Samantha K. have handled my case for several years. They have kept me informed every step of the way. They are both easy to contact. I have both of their phone numbers and email addresses and they respond promptly to any messages I leave. Without their help I would not have been able to get the disability company to fulfill their promises. It is a relief to leave all the dealings with the disability insurance company in their hands.read more
Jeannie Kerr
Jeannie Kerr
23:37 15 Sep 18
My experience with Merrick Williams of Fields Law Firm has been truly above and beyond satisfactory. His knowledge and professionalism have guided me through a very difficult time. He and his assistant Angela were readily available to answer any questions and address my concerns. I highly recommend him as an attorney and will use his services again if necessary in the future.read more
ebon jordan
ebon jordan
19:51 27 Sep 18
Field Law Firm was great my lawyer Zach Schmoll was more than I could ask for. He always kept me in the loop and explain everything perfectly, got back to me whenever I called less than 24 hrs and was a extremely nice guy. This guy is young and knows what he is doing so please don’t let the age fool you. I had a wonderful experience with Field Law and will refer anyone with legal matters to them.read more
Edward Johnson
Edward Johnson
23:11 31 Oct 18
I highly recommend Fields law Firm if you need some no nonsense attorneys to represent you. I was treated courteously and efficiently each and every time by Mike and his associates. They settled my Long Term Disability case in a timely fashion. and was pleased with the results. Thanks again Mike and Fields Law Firm. You are the best!read more
Jeffrey
Jeffrey
19:19 09 Nov 18
Fields Law Firm is simply the very best when it comes to representing you & fighting for your rights! They are a "10 Star" Law Firm hands down! Michael Kemmmitt & Sarah Christensen were simply outstanding to work with. They took over my long term disability case after I was being denied my benefits & gave me the moral support & law experience that I needed to win my case. They were supportive throughout my case & they will fight tooth & nail to assure your rights are not being denied. It is so rare to find a law firm that treats you like YOU are the most important person to them. I HIGHLY recommend Fields Law Firm. They are truly advocates for justice.read more
Ben Chadwick
Ben Chadwick
23:20 12 Nov 18
Michael and Samantha were always giving me updates in a very timely manner. They were very good at getting back with me if I had questions, and they didn't have the answer at the time of our discussion. They were very thorough in their handling of my case, and we received a positvie ruling due to their efficiency and expertise. Thank you very much Michael and Samantha, I appreciate all that you did to help me with my case. I would definitely refer people to you, as well as use you in the future. Benjamin Chadwick.read more
Michael Rosa
Michael Rosa
00:01 01 Dec 18
Evan was absolutely fantastic. He was knowledgable, informative and patient. Evan Sanford and Fields law took my case when other lawyers pretty much told me to pound sand. The outcome was a substantial amount of money that will take the pressure off of me for years to come. I would absolutely recommend Fields law.read more
BOBBY jr
BOBBY jr
17:49 02 Dec 18
It is very difficult for the average disabled person to battle the disability insurance and Social Security disability industries. I was very sick, exhausted, and stressed out about being denied and told that I can work by someone who doesn't even know me! The paperwork was daunting and had to be filled out multiple times. I chose Field's Law Firm after finding them online. They took over my claims and handled all of the paperwork and appeals that were necessary. They even went to a hearing with me to the Social Security Judge. Field's also kept me in the loop every step of the way. This allowed me to focus more on myself and greatly reduced my financial anxiety. They don't get paid unless you get paid. You truly have nothing to lose and everything to gain! I am truly appreciative of Field's Law Firm!read more
Raphael Roe
Raphael Roe
00:35 04 Dec 18
I had the pleasure of working with Patrick Kramer for my LTD appeal. He walked me through the entire process and answered all my questions. Patrick called me anytime there was new information and went above and beyond what I expected. It was one of the most stress free processes I’ve had to deal with thanks to the team at Field’s! Thank you for all your hard work! -Michael Roe, Monroe, MIread more
Donna Williams
Donna Williams
19:07 06 Dec 18
My attorney, Blake Bauer and paralegal, Samantha Kurschner are wonderful. Whenever I need to speak with one of them, they are always available. If I have to leave a message, my call is promptly returned. They worked diligently on my case and won my LTD claim. I highly recommend Fields Law Firm.read more
Lori Anderson
Lori Anderson
20:33 04 Dec 18
Jodie has been a wonderful person and on top of my social security disability claim. The attorneys are great and very thorough with what they do. Would recommend Fielsd Law Firm to everyone. Thank you for everything you have done for me.
Todd Burge
Todd Burge
15:40 11 Dec 18
I worked with Attorney Hans Lodge on a large debt collection from a creditor. He was able to determine that there was a violation of the Fair Debt Collection Practices Act, and swiftly moved into legal action. This whole matter was completely and quickly resolved within a couple of months. This whole situation could not have turned out any better on my end. I highly recommend working with Hans or any of the attorneys at Fields Law Firm!read more
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