Cosigner on school loan in default

[WilliamKF]

Hello,

My step son has defaulted on three school loans for which I was cosigner. I received no notice, and had no chance to keep it out of collections. Debt collector has added $1,763 to each loan of $5,000 for their costs.

I got copies of 3 promissory notes which state:

For value received, I promise to pay to "Original Lender Here", or order, located in San Francisco, CA, (or such other address as designated by the lender) the sum of Five Thousand ($5,000) Dollars, plus ...

My question is does the words "or order" mean that the debt can be assigned to a collection agency.

I'd like to get the loan out of collection and pay directly to the original creditor and avoid the extra fees.

Seems reasonable to me since I had no notice till it was considered in default.

Thanks.

-William

[someonesomewhere]

Did you send the CA a DV letter? If not, I would do so right away. I presume you found about these loans in default rather recently. Since they haven't sent you any written notices, you should still be able to timely DV them. Did you get the promissory notes from the CA?

[WilliamKF]

The collection agency today contacted me by phone for the first time. I asked and they faxed the promissory notes and their contract with the original lender. That is how I got the wording "or order" which I wonder whether that allows the debt to be assigned. Since if it can, the DV would only slow things down since it would appear they can validate if the "or order" allows for assignment. Hence my original question.

[someonesomewhere]

the DV would only slow things down

Slow things down for what? If you're interesting in quickly paying, that's your choice. I presume you got a phone number from them. Call 'em up and send 'em a check. But you'll only end up with a paid collection, and I thought you wanted to try and deal directly with the OC.

DVing is one of the most powerful weapons you can use against the CA. Easy trap whereby they can violate the law. More violations means more leverage for you to negotiate it with the OC.

"PAYING A CA IS THE WORST THING YOU CAN DO."

[WilliamKF]

Yes, I would rather deal with the OC and avoid the added fees of 25% by the CA. Plus I will never pay anything if it means a paid collection on my credit report negative mark.

So to do DV, do I wait for written notification of the debt from the CA, thus far I have only gotten a couple phone calls and a fax of some documents.

In the DV process, if the item is not on my credit report yet, can I dispute that? Do I have to order copies of all my credit reports first to see if it is there and then dispute at each agency upon which it appears?

[someonesomewhere]

I will never pay anything if it means a paid collection on my credit report negative mark.

Good answer. A paid COLL is perhaps only slightly better than an unpaid COLL. An unpaid COLL becomes less damaging to your score over time, and I believe the only reason mortgage brokers wanna see 'em off the CR is because the CA could put a lien on the home.

So to do DV, do I wait for written notification of the debt from the CA, thus far I have only gotten a couple phone calls and a fax of some documents.

Law says "within thirty days after receipt of the notice", but also talks about "initial communication" which could include your phone conversation. Perhaps a judge would say the 30 clock starts ticking with the phone call, although it doesn't seem like it should until you get the written notice.

Law doesn't say you have to wait to receive the written notice before DVing. I say go ahead and DV now.

Please ignore the fancifully worded DV letters on this and other websites. Simple works better.

Before receiving the phone call from your office, I was unaware of the debts you claim I owe you. Under the FDCPA, send me validation that I owe this debt.

DO NOT make any mention of "cease and desist" in your letter. If you want to dissuade them from calling and bothering you, at work or at home, and want to try and coerce them into written communication only, add something like this. Dive suggested it in his Revised Primer on Credit Repair.

My employer does not permit personal calls, so contact me at home if you need to communicate with me. I record all calls made or received from home.

Whether you do or don't record calls at home, it may keep them from calling altogether, it may reduce the number of calls, it may keep them a bit more civil, or it may accomplish nothing. But I don't see how anything bad can happen.

Send it CMRRR, save a photocopy of your letter after you sign it, save your CM receipt, save the RRR green card when it comes back to you, and the USPS receipt also contains the CM # so I save that as well. I and others also put a reference line in letters.

USPS CERTIFIED MAIL RETURN RECEIPT REQUESTED xxxx xxxx xxxx xxxx xxxx

In the DV process, if the item is not on my credit report yet, can I dispute that?

If it's not yet on your CRs, then the CRAs will simply respond that it's not on your report.

Do I have to order copies of all my credit reports first to see if it is there and then dispute at each agency upon which it appears?

Yes, you'll have to get all 3 CRs dispute with each CRA separately. I have info here about pulling your free credit report at annualcreditreport.com

http://www.debt-consolidation-credit-repair-service.com/forums/showthread.php?t=264049

[WilliamKF]

If it is not on my credit report (its at least not on TU or EX), and they say so, what happens if it gets added after my dispute?

Also, how do I word a dispute about something that is not on the report? Do I list the CA name and address? I don't have any account numbers or exact amount of debt claimed.

Also, since there are three loans with the same OC and CA, do I have to do the DV thing three times, or can I roll it all into one?

Are these school loans covered as "consumer debt" under the California "Rosenthal Fair Debt Collection Practices Act"?

Finally, is it okay to put several unrelated disputes into a single letter to the CRA or must they be separate DV and CMRRR actions?

Thanks for all your help!

-William

[someonesomewhere]

If it is not on my credit report (its at least not on TU or EX), and they say so, what happens if it gets added after my dispute?

If it's not on your CRs, then there's no need to dispute, yet. They might only put it on one or two of the Big Three. If so, then you'll wanna dispute it with those CRAs that have it. That's why you always have to check all three CRs.

Also, since there are three loans with the same OC and CA, do I have to do the DV thing three times, or can I roll it all into one?

If all three are with the same CA and OC, I would dispute all three in one DV letter. Just put a reference line at the top of the letter.

ACCOUNT NUMBERS: 123123, 445566, 789987

Finally, is it okay to put several unrelated disputes into a single letter to the CRA or must they be separate DV and CMRRR actions?

Yes, perfectly fine to dispute multiple issues, related or not, with a CRA in a single letter.

[WilliamKF]

The CA has not given me any account numbers since their only communication thus far is by telephone. I have the account numbers with the OC, should I use those?

[someonesomewhere]

Yes, use those. The CAs will sometimes put their own account numbers on the TL, but they can cross reference it by the OCs account numbers--plus about a thousand other things. SSN, name, phone number, address, etc.