Navient will likely sue you after you default on your private student loans. Navient does not sue for defaulted federal student loans. Navient is not a loan holder for federal student loans. It is a student loan servicer for federal loans. Federal student loan collections are typically handled by the Department of Education's Debt Management and Collections System.
How long after you default will Navient sue you?
There's no set time frame for when Navient will sue you sue.
It usually isn't right after you default.
In my experience, Navient usually sues when the statute of limitations is close to running out.
Until then, they'll send you collection letters and call you. They'll tell you they'll take steps to get a wage garnishment or that they'll get a lien against your home.
Navient can't do any of those things until they take you to court and get a judgment against you.
The only thing they can do is hurt you and your cosigner's credit score by reporting negatively on your credit report.
Only defaulted federal student loans can garnish your wages or offset your tax refund or Social Security benefits without a court order.
Click here to read When Can Navient Garnish Your Wages
What can Navient do after it sues
After Navient sues you and gets a judgment against you, it still needs to collect from you.
Their collection rights come down to state law.
Check your state's laws to see what rights a creditor has to collect from you after it gets a judgment against you.
Consider Illinois. If Navient sues you there and gets a judgment, it may be able to garnish your wages, place a lien on your home, and levy your bank account.
In Texas, Navient couldn't garnish your wages. But it could get a lien on your personal property.
How to handle a student loan lawsuit
The key to handling a student loan lawsuit from private lenders is to answer the lawsuit.
Once you get served, you'll want to find out:
- whose suing you
- what court they're suing you in
- when you need to answer the allegations in the lawsuit by
- when's the next court date
Ideally, you'd want to speak with an attorney as well. They should be able to tell you how the process works in your state and what defenses you may have (e.g., the statute of limitations).
While speaking with a student loan lawyer would be great, you may not find one near you.
In that case, feel free to contact me. I'll see how I can help.
Click here to learn How to Answer a Private Student Loan Lawsuit
Settlement options if you're sued
You still may be able to negotiate a settlement for your Navient student loans if you're sued.
Typically, private student loan lenders are going to demand a lump sum payment.
But if you don't have a lump sum available, you still may be able to settle by agreeing to a repayment plan. If you do that, you'll typically have to sign a consent judgment. A consent judgment is simply a document that says you owe money Navient sued you for, but you're agreeing to settle it for less than what you owe.
Filing bankruptcy for Navient student loans
You can file bankruptcy to discharge Navient student loans. But filing bankruptcy isn't enough to clear student loan debt. You have to file an adversary proceeding.
An adversary proceeding is a lawsuit in bankruptcy court.
In that lawsuit, you'll argue that your federal student loans or private student loans (or both) are causing you an undue hardship.
Click here to learn How to File an Adversary Proceeding for Student Loans
Repayment options after you default
After you default, forbearance and deferment are no longer options. Likewise, you can't enroll in a plan to make student loan payments based on your income. And Navient student loan forgiveness programs? Forget about it. Until you get out of default, you're no longer eligible for programs like the Public Service Loan Forgiveness Program.
Your repayment options after you default on your federal student loans with Navient are limited to:
- setting up student loan payments under the Loan Rehabilitation Program and
- applying for the loan consolidation program
For private student loans, you typically don't have an option to refinance or make monthly payments to get out of default.
Settling student loan debt with Navient is an option, however.