There is a time limit for private student loan collection and private collectors do not have as many collection tools as the government. Lawsuits are the main collection tools that private student lenders have.
This does not mean that private student loans are better than government loans. In fact, government loans are usually more affordable and have a lot more borrower protections. However, it is true that if you default, the government has a lot more ways to come after you than private lenders do. Regardless of whether the loan is private or government, it is very difficult to discharge in bankruptcy.
The time limits on how long private student lenders can try to collect vary by state, but are usually about six years after default. You should contact an attorney in your state to find out more about time limits (also called statutes of limitations).
This time limit gives the lender a certain amount of time to sue. If the lender sues during this time and gets a judgment, the amount of time the lender is given to enforce the judgment varies by state. Depending on the state, a creditor may have from five to as much as twenty years to enforce a court judgment. In most states, the creditor is allowed to keep renewing the judgment which basically gives the creditor an unlimited amount of time to try to collect. State exemption laws determine what type of property, if any, a creditor with a judgment can take.
Private lenders will often hire collection agencies. You have the same rights as with government loans to fight back against any harassment or abuse. The main collection tool private lenders have is to sue you in court. Find out more about how to fight back in court.
Any collection fees for private loans should be stated in the loan agreement. The lender should not be allowed to charge collection fees unless there is a provision like Section L in this agreement. There may also be other laws in your state that place restrictions on the amount of collection fees that private creditors can charge.
Private lenders may negotiate with you to set up a repayment plan or otherwise settle your debt.