Experience with Private Student Loans Litigation?

Disputing Your Debt
#1

Hi all,

I have some old private student loan debt that I refinanced with Earnest which then made me ineligible, apparently, to have them waived even though the school went bankrupt in 2023. I am now in default and the loans are owned by Earnest/Mohela because I haven’t had the bandwidth to pay them, along with my other credit card debt. They are threatening litigation if I don’t set up a payment play by mid-November. What I’m wondering is, how bad is litigation? What is the process like? Have you had experience with that and can we talk?

I was just on the phone with them, but then it cut out in the middle of our call. They were having some major phone issues. Anyway, I thought I would take this pause to do some research rather than signing up for one of their “hardship plans” that are not really that great.

#2

From my experience: Litigation shmitigation! This is a tactic all lenders use to bully you into communicating with them. I once had a credit card company send me a fake subpoena.

I find calls with creditors get cut short frequently enough that it might not be an accident. It’s like their call center phones are on a timer that cuts off if they give out too much useful information.

Worst case scenario for litigation: they garnish or put a lien on whatever you have. They can do this.

Best case scenario: you use the hardship plan to get a very low or sometimes even $0 payment. Hardship plans are a pain to set up but once you’re in, you’re in.

Chances are, the litigation threat is yet another way for them to get you to call them back. MOEHLA was the final servicer of my loans in 2023 when they were discharged after ten years of hardship deferment and income based repayments.

Good luck -can’t pay won’t pay!