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About StudLoanGuru

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    Collector on Student Loans

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  1. With private loans the only thing you can do to fully prevent litigation is to call the servicer and setup a new payment arrangement. The payments are not based on any calculation so you should be able to find something you can afford. One benefit is that most private loan lenders allow for settlements once it is in default, meaning they will allow you to pay a lump sum that is much less than the balance and consider it paid in full. If you have some savings it might be the best way to go.
  2. If you cosigned for the loan, then it was not a stafford or any other kind of government loan, therefore you cannot rehabilitate it if it is in default. This means there is no way to get it into good standing, so it will remain in default until it has been paid in full or settled in full. Usually a law firm will not take on the collections unless they are hired by the loan holder, so next time you talk to the person ask a lot of questions as to who owns the loan, who they are and how they are involved in the collection of the loan. If they are in fact a 3rd party, they have to follow all of the laws that regulate collections, even if they are a law firm. There is no magic number to prevent further activity, so $1500 down sounds like a ploy by a commision based representative to hit their monthly quota. Don't be too intimidated by the "further action" comment. It is a phrase collectors use to scare people into action sooner rather than later. That said, if you ignore the situation eventually it can get ugly, so just don't ignore calls and letters. Treat the conversation as a negotiation. $1500 down is not the only option. In fact, if you mail in any amortized payment it will cease any legal action where it is, so if it comes down to it just ask for the mailing address for payments and mail in a payment, if nothing else just to buy time.
  3. A consolidation can be a great tool to help get yourself back on your feet, but just know it isn't necessarily in everyone's best interest. First of all, a consolidation does not have the same benefits to your credit report as does the rehab program. Basically, the rehab program erases the default completely, whereas the consolidation just shows as "paid in full" and will remain as that mark for 7 years, or however long the statute is in your state. Secondly, while you may be able to get a lower payment for your loan, that doesn't mean you are better off. You interest rate will probably be jacked up. This means that you will be acruing more interest and paying less towards the loan. You can do the math and know that long term that is actually worse off than a regular rehab. The forgiveness program is where after you have paid for 25 years on the loan with it still being in good standing, the gov't will forgive your remaining balance. It's a great selling point, but if you even get that far you would have paid the amount of the original loan maybe several times over due to your interest rate going up. The only time I recommend a consolidation is when the borrower is having trouble making their regular payments. It definitely can make them more affordable and resolve/prevent a default. Just know that it sounds much better than it is long term.
  4. Yes, by all means call them and verify the arrangement. Agencies are not allowed to process any payments that are not authorized by you, so it would be best to see why the paperwork states that. It could be two reasons why the payment is stated differently. First, if you are in a rehab program, the payment on the Rehabilitation Agreement Letter is typically the payment equal to a 10 year repayment plan, regardless what you setup with the company. However, this is usually the minimum payment allowed for the rehab program, so if this is true for you it would be the $150/mth payment is not qualifying for rehab, which is a problem in and of itself. THe second possible reason is that if you are not in rehab, and are just making payments, then the window that generates letters was not updated correctly. This is probably the most likely reason for the letter, b ut I would call them just to verify what is going on.
  5. Yes, you will need to call them to let them know what is going on. If you wait for them to contact you it could be after you have already broken the rehab program in which case you would have to start it all over again, probably with a sizable down payment. The transition should be simple once you talk to them. Basically they are going to have you do a larger voluntary payment as opposed to the garnishment + voluntary payment. This will most likely save you money as the garnishment + rehab payment would be more than the regular monthly payment. In those situations the company just makes sure that your garnishment is large enough to cover your regular payment, and everything else is gravy for the balance. Don't be afraid to give your new information to the collection agency. They already have you in the rehab program so they won't persue any garnishments, and even if they did the whole process would take several months and cost them more money, at which point you would probably be rehabbed. Good luck!
  6. Most of what you have just stated is against the law. FDCPA requires that third party collectors not harass any debtor or associate of a debtor, so if you can get proof that any of that occured (like recorded messages) then you could sue them for not only the amount of your loan but also damages. As the previous poster stated, if you get a recorder and tell them they are being recorded anything they say can be used in a lawsuit. They are not allowed to disclose to a third party the nature of the business, so if anyone says you owe a debt or could be in trouble to any of your family, friends, or co-workers you can sue them. There is a specific message that collectors are authorized to leave, none of which is allowed to be threatening. If they ever leave a message that is threatening, save it. Most attorneys in this situation will work pro bono if you can prove the offense to them, so you wouldn't have to pay them up front. The next step then is to file a complaint with AES. Tell them what Wyndam has done and that they are breaking the law, and AES will likely pull it from Wyndam. You can get Wyndam in some deep trouble with this.
  7. I can't speak to the status of the loan during the bankruptcy, but as long as it is still in good standing you have options to prevent default. It sounds like you are in the default aversion stage, which is where you aren't too far along that it has defaulted but you are behind on your payments. In this situation the goal is to "cure" the loan, or catch up on all the amount passed due. After your bankruptcy you can explore what it would take to do that, which i'm sure will include payments not necessarily all of it up front. As far as a restructure goes, that would be a question for your current lender as to whether they have any programs avail. If, however, they do not offer anything you could get it consolidated throught the USDOE with an income based repayment plan. It will start over the payment arrangement and make it based on your income, not the balance of the loan. Be careful doing that, though, as your interest rate will go up. The general rule is if you can afford the current monthly payments then pay that, otherwise seek a restructure of somekind.
  8. AES would still hold the loan, but once it defaults they can higher any agency they want to take it on. In short, no you don't get a choice as to who rehabs the loan, but that doesn't mean you shouldn't. Even if you call AES they are contractually obligated to refer you to Windham. You'll be fine with Windham. Once you get through all the robotic "education" (where they educate you on the consequences of default) they will be willing to work with you because that is how they get paid.
  9. My understanding is that only the IRS can sieze a bank account without a judgement, meaning that back taxes are the only way the government can take money already in a bank account. Student loans do not fall within that category therefor you would be able to put your name on her accounts and rest easy knowing that the student loans cannot be paid through bank account lien. Student loans can only garnish current income and tax returns, unless they file a to get a judgement which legally they can do but they hardly ever do because it costs more money to file through the courts than the amount they would recieve once they get the judgement. However, if they somehow did file a judgement and got a judgement against you, all you assets, including any bank account in your name, would be subject for siezure. But again, don't worry about that happening. However, make sure your taxes are in order because they certainly could do it. As an alternative to letting the loans default, you may want to try consolidating the loans through the US DOE. They offer income based/income contingent repayment plans so if you are not working and have no income for the time being it could keep them in good standing. Just a thought.
  10. If it is a stafford loan you could verify it through the loan locator number at 800-433-3243. This is through the USDOE and all you have to do is follow the prompts and it will tell you all the federal loans your wife has in her name and who to contact regarding the loans. If there is nothing in her name, dispute it with any credit agency that is reporting it as well as the collection agency. If it is in her name, and the collection agency is the servicing party, call and ask about a rehab program, which would get the loan out of default and get all negative default marks expunged from her credit. It is hard to say what all of that stuff on the prom note means, but rest assured the above number will clear up if the government thinks it is in her name. That is the key, because only the government can allow wage garnishments, tax offsets, indefinite credit reporting, etc. If the government doesn't believe it is in her name, then none of that would be possible and thus no ramifications for non payment. Hope this helps. Good luck!
  11. Yes, the rehab program is real and is legit. However, there are a few things to note about the situation .. The rehab program is 9 months to get out of default and off your credit, not 6. The 6 month mark allows you to get Title IV again if you want, but it is not until your 9th payment that you are eligible to come out of default, and even then it may take another month or two, so make sure you keep your payments up even after 9 months to ensure you do break and have to start over. The rehab program does not require any down payments. Simply speaking, it only requires that the payments be "reasonable and affordable," which most guarantors define as equal to or more than what the payment would be on a 10 year payoff. Anything they are trying to get you to do as a down payment is just because the collection company (and the individual collector) get paid more based on how much they collect, thus they make it their "requirement" to pay a down payement. Rest assured, this is not required per the rehab program. That said, it is still in your best interest to pay as much towards this program as possible while it is in default. The reason being that the collection fee will get recalculated at the end of the rehab program, so instead of being 20% or so of your balance that defaulted, it will be 18.5% of the new balance at the completion, potentially saving you thousands. This is one of the most inderrated things about the rehab program because most people don't know about it. Recording the phone call is all well and good, but you have to inform anyone you are recording that you are recording it, otherwise if you tried to use it in court it would be inadmissable, or at least that is what I am told. Good luck.
  12. NCT is a private lender, so it would not be eligible for federal loan forgiveness
  13. One thing to know is student loans don't get "sold" to collection agencies. NCT is a private guarantor/lender and when a loan defaults they will typically outsource the loan for collections to an agency, but not sell it to them. This makes a big difference since 3rd party collections has to follow all the laws of FDCPA, whereas 1st party (if they owned it) many of those collection laws don't apply. Overall, it always better to face the situation rather than ignore it. The only time that may not be true is with certain private loans (which NCT is a private guarantor). The question you need to answer is whether or not the loan is passed the statute of limitations for your state. If it has, and you have made no payments since then, it may be better to not pay it becasue if you do then the SOL will restart, so your CBR will reflect the loan again. If, however, you are inside the SOL, it is best to get something setup. Don't dispute the loan unless you legitimately feel the loan was fraudulant. All a dispute does is minimize the contact you have with the agency, but the loan still acrues interest and is still in default throughout until either you pay it off or the SOL expires. If you have the money, ask about a settlement. I know NCT will typically settle for around 80% of the balance, and sometimes less than that in extenuating circumstances.
  14. Direct Loans is an affiliation of the USDOE. They are more than likely two separate loans that were not consolidated together. A quick way to check this would be to call the student loan tracking number 1-800-433-3243. This number will tell you every loan you have out in your name and who to contact for each one. If it turns out that these are two seperate loans, it would be best to pay them off as soon as possible. The statute of limitations (where if you pay on an old debt it renews it) is not applicable to government loans, thus would not effect these loans. The amount that is reported to your credit agency may not be factoring in collection fees, though. These typically run anywhere from 18% to 23% of the principal, but when you call to get the exact amount ask if you can get a settlement offer and they may waive the fees for you. And don't worry about asking questions. That is why this forum is here! Good luck!
  15. When they say it has been paid by an insurance company, what they are telling you is that the loan has been re-insured. That means they sold the loan back to a bank or institution which is normal after a rehab. Do you still have a copy of the Rehabilitation Agreement Letter(RAL)? In that lettr it states that the negative marks would be removed, and as long as you have a copy you could threaten lawsuit to get what you need. It would pretty much be open and shut in court, since you have both the contract stating your credit would be cleared and a copy of your current credit report showing it has not. You could also charge all court costs associated and probably damages for Sallie Mae being in breach of contract since you rehabbed it. At this point, if you have the RAL, I would threaten lawsuit and see if anything happens. If you don't get the answer you want I would literally hire a lawyer and file a lawsuit. If you don't have the RAL, keep calling them and sending them written letters and document every attempt you make.