What to do about a student loan that I have been unable to make payments on for a few years now?

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What to do about a student loan that I have been unable to make payments on for a few years now?

The loan was originally made through a state department of education but now is in the hands of a collection agency. I am receiving messeges threatening garnishment of wages. Is this a valid threat? I also wondered if, now that the debt is in private hands, is bankrupcy an option now? In the past I have made payments on this debt. But I am struggling to regain an economic foothold, and haven’t quite reached there yet. If I could pay, I would. What options are available to me? I have previously been enrolled in a payment plan, which I was good with for over a year until, due to a layoff, I was unable to continue.

Asked on October 23, 2012 under Bankruptcy Law, Georgia

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Under federal bankruptcy laws a studen loan cannot be discharged in a bankruptcy. The best way to try and resolve the debt that you owe for your student loans is to contact the debt collection company and try and work out a monthly payment on terms that you can afford. The key to resolving you matter is to be honest with the debt collection company and mention to its representative that you have been laid off of work.


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