Student Loans: What If I’m Already in Default?

Defaulting on student loans can feel overwhelming, especially when collection calls, wage garnishments, and damaged credit follow. In most cases, federal loans go into default after 270 days of missed payments. Private loans may have different timelines. Once in default, borrowers may lose access to deferment, forbearance, or income-driven repayment options.

How Student Loan Default Affects Your Financial Life

Being in default can lead to serious financial consequences. The government has broad powers to recover federal student loan debt, including seizing tax refunds or garnishing wages without a court order. Private lenders may sue for repayment and obtain a judgment. Additionally, default can make it difficult to qualify for a mortgage or car loan, further impacting your financial future.

Options to Get Out of Default

Despite the stress of default, borrowers have several pathways to recover. Loan rehabilitation is one option, which requires a series of on-time payments. Another option is loan consolidation, which allows borrowers to combine their loans into a new one, often regaining access to repayment plans. Each route has pros and cons, so it’s important to evaluate which is the best fit for your situation.

Can Bankruptcy Help with Student Loan Debt?

While student loans are typically not dischargeable through bankruptcy, that doesn’t mean all hope is lost. In some cases, borrowers can pursue an “undue hardship” claim to request a discharge. Even if discharge isn’t possible, filing for Chapter 13 bankruptcy may help by creating a structured repayment plan and halting collection efforts during the process.

If you're already in default on your student loans, you don't have to go through it alone. At Joshi Law Group, we help San Diego residents explore legal solutions to regain control over their finances. Whether you're considering consolidation, loan rehabilitation, or bankruptcy protection, our firm is here to guide you toward relief.