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Private Student Loan Delinquencies & Default: Are My Retirement Funds in Danger?

retirement funds
  • Mar 23 2020

As a consumer in the US, you are probably forced to deal with debt like your coworkers and neighbors do too, making payments monthly to a mortgage lender, automobile finance company, credit card corporations, utility companies, and more–while still trying to hold back enough for retirement funds As household debt continues to rise to historic highs, student loan debt plays an enormous role in constricting the budget for all too many consumers and borrowers; in fact, over 45 million individuals are now responsible for a cumulative debt reaching almost $1.6 trillion.

You may be responsible for federal student loan debt in combination with private student loan debt; you may be paying off loans for your kids. You may have gone back to school again later—there may now be an MBA to pay off or another graduate degree, with a pricey private student loan tag attached to it.

But when you retire, isn’t it time for things to ease up a little? After all, you have probably had a lifetime of carrying so many burdens, from hitting that alarm clock every weekday to dealing with decades of work stress and all the financial issues that accompany normal life too. Most of us like to consider our retirement funds to be well protected, but as seniors become one of fastest-growing age groups for student loan debt, questions continue to arise. The first thing to keep in mind is that if your private student loans are delinquent or on the verge of becoming so—or worse, going into student loan default—it is probably in your best interest to avoid letting that happen, at all cost.

If a private student loan servicer were to sue you, also presenting you with the potential of a default judgment should you lose, it is true that your financial situation could become uncomfortably tricky. While social security funds or 401K or other retirement accounts should not be garnished in the case of a default judgment, finances can become complex if your checking accounts are frozen while a creditor waits for your debt to be satisfied (with the cooperation of your bank). There is also the possibility that the government could garnish funds if you default on a federal student loan debt.

Have you experienced problems with your loan service provider or student loan program, or are you in danger of defaulting on your student loan? Contact Fitzgerald & Campbell, APLC now so one of our experienced student loan debt attorneys can review your case and discuss all the available options with you. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, bankruptcy, and other debt management processes. We are here to help! Click here to schedule a free 30-minute consultation, call us at (855) 709-5788, or email us at info@debtorprotectors.com.

Posted in: Student Loan Debt