Key Alternative Loan, Defaulted in 2006. Help!

[ThickBurger]

Hello.

 

I’m in a pickle due to my own ignorance. I know I screwed up. It’s time to fix this. I’m ready, with your help.

 

I have $72k currently outstanding in Private Student Loans. Defaulted in 2006. My mom is a co-signer.

 

OC: Key Bank (Key Alternative Loan)

CA: Sentry

 

I can’t seem to find anything on whether or not this Loan is backed by the government. My mom is a co-signer, so her Credit went down hill as well. I’m at the point where I can make monthly payments on this.

 

Is Rehab an option? Should I talk with the CA on the phone or only in writing?

 

Mom talked with CA, they offered to settle for $40k, in one lump sum. I don’t have access to that kind of money. Since they offered a settlement, could this loan be discharged in BK? Original loan amount is $65k. I have never spoken/written to this CA about this.

 

Any advice on how to proceed? I don’t have any assets, Have a car but still owe $2k on it. Mom owns a house, which is has about the same owed on it as what it’s worth. In addition there is a third party on the title due to a divorce she went through. Also a car, she owes about $3k.

 

Any one have any success with these Loans from Key Bank? Looks like SOL (In FL) is 5 years on loans with a promissory note, which this was. Does SOL even apply to this “Private student loan.�

 

TIA!

ThickBurger

[LynnInMN]

No, since they are not government back, rehab is not an option. Neither is bankruptcy....even private student loans are non discharageable in bankruptcy.

 

FYI....they will sue both of you

[krzywon]

One thing to add on top of Lynn's statement - there is no SOL for collecting on student loans - federal or private. This debt will never go away and will continue to accrue interest while in default.

 

Because this is a private loan, there is no way to bring this out of default without paying it in full. Your best bet at this point is to call them and hope they accept a payment plan you can afford. They could still sue you at any time but it is less likely while you are paying them. And as Lynn said, they can and will sue you and your mother.

 

You're in a bad situation and I wish you the best of luck.