LIVE HELPAvailable
Click to CalL
Call Now

Student Loan Debt vs. Other Debts

Defaulting on student loans has different consequences than defaulting on other types of debt. Generally, debt falls into two categories: secured debt and unsecured debt. Secured debt is a loan that uses real property as collateral. For example, a car is collateral for an auto loan, and a house is collateral for a home mortgage. So, if you default on an auto loan, your car can be repossessed, and if you default on a home mortgage, you can face foreclosure. Unsecured debt is debt incurred without collateral. Examples of unsecured debt are most credit card bills, phone bills, and medical bills.

When a debt collector comes calling for unsecured debt, he can’t threaten to garnish your wages, take your car, freeze your bank account, or foreclose on your home. It’s a violation of the federal Fair Debt Collection Practices Act for a debt collector to threaten legal action unless the debt collection agency has the means and intention to do so. If a debt collection agency does take you to court and obtain a judgment against you, you could have your wages garnished or your bank account frozen.

So, where do student loans fit in? Student loans are unsecured by real property, but the U.S. Department of Education can trip up those whose student loans have defaulted.

Statute of Limitations

Each state has a statute of limitations, after which time a debt is not legally enforceable. For example, California’s statute of limitations is four years. For regular unsecured debt (like credit card debt), a debt collector can’t take you to court after the statute of limitations has run out. With student loans, however, there is no statute of limitations. The federal law takes precedence over state law, and federal law says that the clock never runs out on student loan debt.


Chapter 7 bankruptcy is meant to wipe the slate clean and give you a fresh start. Credit card debt, medical bills, leases, and judgments are typically discharged, and you’re under no obligation to pay them. When it comes to student loans, though, bankruptcy doesn’t usually apply. If you filed for bankruptcy after October 8, 1998, chances are good that you’re still obligated to repay your student loan. Typically, the only exception is if the court granted an undue hardship ruling.

Lemberg & Associates’ team
of consumer attorneys is highly
skilled and ready to help you
with debt collector abuse.

If you have been the victim of harassment or illegal or unfair debt collection practices, Lemberg & Associates will discuss your options with you and protect your rights. For more information, contact Lemberg & Associates today at .

Learn More About Us 
Start Free Legal Consultation
Fill out form:
Please wait...
Your information is kept 100% confidential.
We do not spam or sell your information.
Find out how we can
help you stop debt
collector harassment
Get Free Legal Help 

"The FDCPA is a consumer protection statute and was intended to permit, even encourage, attorneys like Lemberg to act as private attorney generals to pursue FDCPA claims."

U.S. Ninth Circuit Court of Appeals, Evon v. Law Offices of Sidney Mickell
Follow Us on Twitter