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privately defaulted student loans


jewel1980
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hi,

If anyone has a privately funded student loan (NOT FUNDED/NOT BACKED BY THE FEDERAL GOVERNMENT) please try to avoid default it you know you are headed that way, before they put your account into default for you. I mean use your forebearance time and see if they have a hardship program. Especially, if you have any private loans with Wells Fargo Bank, they are a pain in the neck, but I am hoping eventually they will come around. Working with their loss recovery department is a whole lot easier than working with a collection agency. Since the funds are not federally backed, they loans are not in the national student loan database, are not subject to the federal rehabilitation program, and are a pain in the butt to get out of default once there. I am still working on mine. So please word to the wise, WFB are big, giant corporate meanies but it is better than working with CA people with no ethics.

Jewel

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sis,

well if there is I have not found it, and WFB has not informed me of it. I mean the only reasons I am working so hard to get these accounts listed correctly are: they are my longest standing accounts (4 yrs), federal or private student loans DO NOT go away, and I am still in school and do not have the money to settle the account for less than owed nor do I want to, and i am in health professions cirriculum, I am hoping to get into the Physician's Assistant program for grad. school, and if you have defaulted student loans they can pop up and hold you from getting your professional license (or so I have heard still checking on that one to be sure) I have requested copies of the payment histories from WFB, I have not sent my goodwill letter to them yet, b/c I am waiting for information (supporting documentation) from AMAN CA, with whom the accouts are listed with now. When you call the automated WFB number to check status of account, it says these accounts have 0 balance. Well if that is the case, then isn't that how it should reflect on my credit report, and couldn't they be in the wrong for it being a 0 balance and then reporting it saying I owe like 4000 on each account. Well any how, this is taking more time than I thought it would, however, I am just being cautious do not want to screw up. I mean if AMAN cannot provide me with substancial proof and something saying that they now own the bank note, I am going to send all that to WFB and ask that they be the ones I deal with for those reasons. The whole point was that when my husband sent the first DV letter all they sent was the signed promissory notes from WFB, and I can get them myself if I call and ask for them. So I have read nothing in my contract about assignment so if they do not own the bank note then WFB is still the OC and they only entity I should be dealing with correct. Let you know how it goes.

if anyone else has info about this please let me know.

jewel

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There is one advantage to these loans - they are covered by the applicable state's statute of limitations whereas federal loans are not. Collection then, is just like any other private debt, no matter the purpose of the loan. Just like a credit card. Your repayment/rehab/credit report strategy then, should be just like any other defaulted debt.

I defaulted on one of these and got sued by a collection agency lawyer representing the guarantor of the original note. Luckily for me, I have an attorney friend who owed me a favor. We answered the suit and the guy agreed to settle for 25% on the dollar with 100% free and clear CR language.

The other type of private loan, as you mention, is guaranteed by the federal government. These jerks have it easy because they don't have to respect the SOL. They won't negotiate and they don't have to.

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hey,

are you for real, I mean I am not saying you are lying, but if that is the case then the SOL for the account may be almost up, b/c here in NC we have shorter SOL than others, and since the funds are not federally backed that would be awesome, if I could settle and get that crap off my report.

But I also have another p.o.v I mean this is my oldest account and I am a full time student and alot of credit things I do not qualify for, so if they would work with me and fix my info. the way I want it I would be willing to pay the amount in full, b/c I really do not owe that much and between my soon to be ex husband and I saving up money we could pay it off in full

what would be even better is if they would accept like 35% of the amount owed and totally make my TL postive with no lates and no derog. info.

Question: Do you have like a site of reference or a letter or something substancial that I could look up and print out, if you know of it I would GREATLY APPRECIATE it.

thanks,

jewel

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Get out a copy of your promissory note and make sure that it's not a Stafford Loan or a Perkins loan. You'll have to do some close reading, but the promisory note will tell you whether or not there is a guarantor or federal-backing. It looks like you already know this for sure, so what are you afraid of?

FYI the relevant USC (giving FEDERAL student loans blanket exemption from state SOL laws) is here:

http://caselaw.lp.findlaw.com/casecode/uscodes/20/chapters/28/subchapters/iv/parts/f/sections/section_1091a.html

Because there is no federal money involved, there's no federal jurisdiction as far as I can tell, but you can only be sure by reading your note. I live in Texas and that's my experience, at least.

I also did a quick search of NC state law pertaining to contracts and SOL and there is no special mention of student loans or education loans that would differentiate them from any other private contract (see sect 52).

http://www.ncleg.net/Statutes/GeneralStatutes/HTML/ByArticle/Chapter_1/Article_5.html

Good luck. I really do think these things are no different than any other commercial loan, no matter the purpose. A student loan is not just another student loan, no matter what the collection agency will tell you.

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good question smitty12229 b/c that was my exact same question

WFB was listed on my list of creditors for the BK7 last year also, so I guess they said they were nondischargeable since I still owe them

but if there is someway to get them proved nondischargeable as God is my witness I am going to searhc hight and low for it, and when I find i can get my BK7 from last year amended to include these two loans

b/c my BK lawyer from last year told me that student loans public or private were nondischargeable, however, this info. from this site and other stuff I have heard and read make me question that, I mean he did not even look at the loans really close like I asked him to, and back then I was naive and I have a little more experience now and know more things to look at

Any how I want to bring WFB down, and get them out of my life, they are big corporate meanies

oh they report both of the loans as an installment loans on my CR and on my husband 's CR both are reported as auto loans, and he has never had an auto loan with anyone but Mitsubishi, and yes they are the same account numbers on both our reports go figure

and eventhough they are listed with AMAN CA they have not listed them on reports yet, trying to keep that from happening

I have not sent anything to WFB yet b/c I do not want to wake the big giants, ya feel me????????????

like I stated earlier I am making an appointment with the university attorney this week to find out what he thinks and who I should go to, etc.

I will keep you guys posted

I am printing this stuff out and will ask about it at the attorney's meeting thank you so much, in advance

PLEASE PRAY FOR ME I NEED ALL THE HELP I CAN GET

CRUCIFY WELLS FARGO BANK, THEY SUCK!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

toodles,

jewel

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Jewel,

I have been paying Wells Fargo $300/mo. I still owe $6000. They switch me to a new collection rep about every 3-6 months. The newest one called today and said I need to send $1600 now and then start paying $350/mo. What the heck?? I've been paying them faithfully. She said they will take me to court if we don't comply.

Will they really pursue court action if I'm paying them? If so, then I might as well stop sending them anything and let it play out.

Also, I found this link that mentions something about student loans and bankruptcy.

http://www.hjkroeger.com/lawnews.html#nine

Laura

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OH GOOD LORD! YES YES YES! Sorry to sound rude, but I am incredulous that you guys are even debating this.

Jewel, unless your loan with Wells Fargo is guaranteed or otherwise associated with the federal government, then it absolutely is dischargeable in a bankruptcy. It's nothing more than a private transaction between two parties. It's a private commercial loan. You filed for bankruptcy with a bankruptcy attorney who never checked on this and just took your word?

DO NOT DO ANYTHING ELSE UNTIL YOU GET A COPY OF THE PROMISSORY NOTE! Wells Fargo should be willing to do this happily. If Wells Fargo doesn't do this, then you don't pay. Follow some of the other strategies on this site and treat it like a credit card debt. Ignore the collection agents, request debt validation, all that stuff.

Once you get the promissory note, read it, or take it to an attorney or to a friend who can read legalese, and determine whether or not it's a FEDERAL LOAN. The language will be very specific about this - it will have language that mentions things like "guarantors" and "federal student aid" etc etc. It will also be very specific about remedies with regards to bankruptcy. More specifically, if it says "Stafford Loan Program" or "Department of Education" anywhere, then that's your clue that it's federal and non-dischargeable.

If you decide that it's a federal loan, then you are probably stuck doing whatever Wells Fargo tells you to do. However, I would NOT deal with a collection agency and try and negotiate a payment agreement with Wells Fargo directly. If Wells Fargo stonewalls you, then probably your best bet is to just wait and let Wells Fargo sue you and then find a lawyer who will negotiate a deal for you.

If it's not a federal loan, then you need to treat this just like a defaulted credit card account because that's all it is - it's a consumer debt. Follow the strategies on this site with regards to validation and settlements and bankruptcy and SOL. In fact, you should probably find a new bankruptcy attorney because this debt should have been discharged last year when you filed for BK. The link in Smitty's post about bankruptcy misconceptions is right on - it's not true that all student loans are non-dischargeable, but because most student loans are federal loans, then most people make the same mistake as you and feel that there is no reason to even try and worry about getting relief.

To summarize:

Get a copy of the promissory note, then go find a consumer protection attorney. It sounds to me like this is really complicated. Go to http://www.naca.net/ and find someone in your area. These are consumer attorneys who specialize in this kind of thing and you will likely find someone who will at least give you a free initial consultation so that you know your options. It sounds to me like things are not as bad you think, but you're also getting abused by the system and that's not right.

Good luck - please keep us updated.

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OH GOOD LORD! YES YES YES! Sorry to sound rude, but I am incredulous that you guys are even debating this.

Jewel, unless your loan with Wells Fargo is guaranteed or otherwise associated with the federal government, then it absolutely is dischargeable in a bankruptcy. It's nothing more than a private transaction between two parties. It's a private commercial loan. You filed for bankruptcy with a bankruptcy attorney who never checked on this and just took your word?

DO NOT DO ANYTHING ELSE UNTIL YOU GET A COPY OF THE PROMISSORY NOTE! Wells Fargo should be willing to do this happily. If Wells Fargo doesn't do this, then you don't pay. Follow some of the other strategies on this site and treat it like a credit card debt. Ignore the collection agents, request debt validation, all that stuff.

Once you get the promissory note, read it, or take it to an attorney or to a friend who can read legalese, and determine whether or not it's a FEDERAL LOAN. The language will be very specific about this - it will have language that mentions things like "guarantors" and "federal student aid" etc etc. It will also be very specific about remedies with regards to bankruptcy. More specifically, if it says "Stafford Loan Program" or "Department of Education" anywhere, then that's your clue that it's federal and non-dischargeable.

If you decide that it's a federal loan, then you are probably stuck doing whatever Wells Fargo tells you to do. However, I would NOT deal with a collection agency and try and negotiate a payment agreement with Wells Fargo directly. If Wells Fargo stonewalls you, then probably your best bet is to just wait and let Wells Fargo sue you and then find a lawyer who will negotiate a deal for you.

If it's not a federal loan, then you need to treat this just like a defaulted credit card account because that's all it is - it's a consumer debt. Follow the strategies on this site with regards to validation and settlements and bankruptcy and SOL. In fact, you should probably find a new bankruptcy attorney because this debt should have been discharged last year when you filed for BK. The link in Smitty's post about bankruptcy misconceptions is right on - it's not true that all student loans are non-dischargeable, but because most student loans are federal loans, then most people make the same mistake as you and feel that there is no reason to even try and worry about getting relief.

To summarize:

Get a copy of the promissory note, then go find a consumer protection attorney. It sounds to me like this is really complicated. Go to http://www.naca.net/ and find someone in your area. These are consumer attorneys who specialize in this kind of thing and you will likely find someone who will at least give you a free initial consultation so that you know your options. It sounds to me like things are not as bad you think, but you're also getting abused by the system and that's not right.

Good luck - please keep us updated.

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I thank you for your post and actually I am doing just what you said, but I do have an appt. w/ the attorney who filed my bk7 tomorrow, and if he cannot give me the info. that I want I will be consulting another attorney one who is more knowledgeable in this area of student loans and consumer debt, I really do appreciate all the help you have provided I have found out some interesting stuff and articles from you and smitty. I am hoping that this will all turn out the way I want.

thanks,

jewel

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