Legal Question in Credit and Debt Law in Virginia

Student loan stress

Over ten years ago, I had to get a student loan to pay for my second year of graduate school in the amount of $10,000. I then had to leave the graduate program because of severe medical and psychological problems. I spent many years in and out of hospitals, and the medical bills started adding up too. I was able to defer payments on the student loan for medical reasons for only so long. I have been completely unable to make any payment on it in the last several years because of a very dire financial situation. I remain very sick and need a major surgery, but I'm unable to get it because of the financial issue. I cannot work because of my illness, and I am looking into applying for disability.

Today, I received a letter from the Dept. of Education, stating that I have to pay back this loan in 60 days. I am frantic because I don't have the money. If I had it, I'd pay it off immediately. Is there any way I can continue to defer this? If they sue me, how do they collect when I don't have a penny to my name?

I know that the law requires people to pay back student loans, and I intend to when I have an income. I need to get well to have a job though, so I'm stuck. Plus, I can't afford a lawyer. Any ideas?


Asked on 11/03/07, 10:03 pm

2 Answers from Attorneys
Michael Hendrickson Law Office Michael E. Hendrickson

Re: Student loan stress

It would seem that a letter in reply to the Department of Education would now be in order, detailing your very unfortunate current financial circumstances which have precluded your payoff of this student loan and which in effect have made you "judgment proof" with respect to any likely collection actions which this agency or its agents/surrogates might undertake against you, if in fact a judgment was ever obtained against you for this unpaid student loan. And, therefore, it would be your recommendation that the agency attempt to work with you a while longer on this matter which might, perhaps, have the effect of allowing you to pay back on a voluntary basis at least part of this debt which still remains outstanding and which could well result in the Department of Education

receiving at least some payment on this loan as opposed to the virtual nothing which it is likely to receive if it should choose to go the involuntary enforcement route to collect this debt.

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Answered on 11/04/07, 12:11 am
Ruth Emily Kochard Ruth Emily Kochard, Counselor at Law

Re: Student loan stress

If you in fact have no defense to paying the debt, you should (in writing) attempt to work out a payment arrangement with the creditor. You should explain that because of your circumstances you have no assets; the creditor could proceed against you and obtain a judgment, but would be--until you start to recover financially--unable to collect anything. It would be in the creditor's interest to work with you at this point. Although you are unable to hire an attorney to assist you with this, you may be able to obtain some help from your local legal aid organization, and you should contact it to find out if you qualify.

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Answered on 11/04/07, 7:57 am


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