Legal Question in Credit and Debt Law in California

Re: private student loan denied payment

Yes, they can refuse to accept any amount less than what you agreed to pay in the terms of your contract with them. At a certain point, after you failed to make payments, they can declare a default on the loan, and "accelerate" the total amount due (they can declare that once you are in default the entire principle, interest and fees are due and payable immediately). Once they accelerate the loan, they are not even required to accept the original payment amount, assuming you could make that amount. Even though this loan appears to be private (unless its an uncle, or friend), it is most likely insured, which means it may not be even be dischargeable in bankruptcy - there are a number of conditions that must be satisfied before an insured student loan can be discharged. I'd suggest contacting an attorney to discuss this matter.

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