For most types of private student loans, the only way that the lenders can forcibly collect from borrowers is to file a lawsuit in court. That’s because most private student loan lenders do not have the same collections powers as the federal government – they generally cannot garnish wages, put a lien on a home, or seize any assets without first obtaining a court judgment. That judgment then gives the lender additional powers to pursue the borrower if he or she doesn’t start paying.
So you would think that all private lenders sue defaulted student loan borrowers, right? Well, that’s not necessarily true. In New York and Massachusetts (where I practice), let’s just say that some student loan lenders are more litigious than others. The following is based on my own personal anecdotal experiences representing student loan borrowers – it is not scientific, and it is by no means representative of national trends. And if your student loan lender isn’t on this list, it doesn’t mean you can’t or won’t be sued. But, perhaps my observations below can be insightful.Read More