Help! Being sued re student loans

Discussion in 'Credit Talk' started by crabbie74, Mar 7, 2003.

  1. crabbie74

    crabbie74 New Member

    I am being sued by a collections attorney for non-payment on a student loan. What can I do? I have no money and no assests. When my loan went to collections I tried contacting them to set up payment schedule but they wanted full amount of loan and would not work with me so I just ignored the letters. (DUMB MOVE!) Have also tried talking to the attorney who is sueing me but he wants to get a default judgement against me plus wants me to pay him $6,000 in attorney's fees (my original loan was only $10,00). I have been willing to try to set up payment schedule but do not want to pay these outrageous attorney's fees. Anyone have any suggestions? All of my other loans and CCs are in good standing. Do I have any rights at all here?? Thanks for your response.
     
  2. kelcol

    kelcol Well-Known Member

    What kind of school loan is this?
     
  3. pnwman

    pnwman Well-Known Member

    So is he suing for the OC or has he purchased the debt? Who was the original loan with? Is the 6k for attorney fees or is it a mixture of interest, penalties and fees? When was the first late payment? What is the SOL in your state?

    B. Bauer in another thread suggested making small payments every month (even if the creditor doesn't want them) to make a judgement hard to get. I am not sure it applies in this case but it is an interesting tactic.
     
  4. BAlZebub

    BAlZebub Well-Known Member

    Hmm - hard to say. Student loans are a pain in the butt.. I highly suggest you contact the ombudsman at the US Department of Education and talk to her and tell her you wanted to enter the Federal Student Loan Rehab program but the CA wouldn't allow it - demanded full payment. Hand her a big sob story and ask if there 'is anything she can do' for you. (The ombudsman can work miracles.) Also, if a person wants to enter the rehab program - they can; its automatic under the law. You do not have to make a big 'down payment' as the CA might try to tell you - you just have to make 12 monthly ON TIME payments. The payment amt has to be agreed upon by you and the lender (go for a small one you know you can make). The ombudsman can put a stop to the legal proceedings and get you in loan rehab - but be warned, if you are 1 day late with 1 of the '12 monthly on time' payments - they can sue your ass off. It's best to have the do an auto draft of your checking acct - plus you get a reduction of your interest rate if you do.
     
  5. smontoya5

    smontoya5 Well-Known Member

    I agree with the loan rehab suggestion- if this option is at all possible go with it.

    I was staring at almost $10,000 in defaulted student loans. We had been experiencing SEVERE financial difficulties but having my paycheck garnished would have ruined us.

    Anyway, I set up payment arrangements. $5000 of my debt was with the US Dept of Ed, $5000 was with the Illinois Student Assistance Commission.

    US DOE agreed to $50 a month, ISAC to $50.08.

    I just made my 10th payment- 2 more months to go!
     
  6. bbauer

    bbauer Banned

    You have got a real tough deal here to say the least. The collection agency can't buy the debt from Student loan as far as I know. My impression has been that SL would not allow private collection agencies the right to buy or file suit. My understanding is that if one is sued it would be by government attorneys and they don' t miss any tricks.

    Again, I hasten to state that the above comments are just my understanding from reading the comments of others on message boards and forums. I don't have any real experience to go on.

    I've also heard of another interesting idea and again I have no idea whether it might be a valid tactic or just another looney tune from a person well known for his other LTU ideas. Regardless of the person's past ideas there is always the chance that he might have stumbled onto something and finally came up with something that will work.

    In this case, his idea is to get a relative to put a huge judgment on you for many times the amount of the judgment you are currently facing. His thinking is that with such a huge judgment and garnishment already on the books the next guy in line is going to have to wait for an awful long time before he can get a foot in the door.

    It might work and then again there is the valid thought that the government might smell a rat in the woodpile and start checking things out to make sure what is going on. If they did that they might very well be able to prove the fraud and put the both of you in jail for a long long time.

    While it may or may not work for some little rinky-dink bill, I'd sure want to check with some competent attorney before I went doing something like that. Just because ideas sound cute at first glance don't mean they have any basis in either practical or legal fact.

    Those government lawyers don't play silly games. They go for the jugular every time.
     
  7. chipper

    chipper Well-Known Member

    I went through a similar situation, so maybe my rookie self can help...

    I had 8k in student loans, and when I spoke to EdFund (the OC) they demanded payment in full. They would not accept anything less. So, being an idiot, I decided that ignoring them would make it all go away. Wrong! They started using a CA called ACS.

    Anyway, ACS sent me a million letters and I finally read one. It stated that under a law created by good ol' Mr. Clinton, holders of student loans have the RIGHT to either enter the William Ford Debt Consolidation Programs or Loan Rehabilitation, no matter how outstanding they are.

    William Ford gives you 25 years to pay off the loan, and the CRA's will start reporting your loan as current, but will not erase the derog remarks.

    Rehab will give you 10 years to pay it off, your credit report will still show derog/default, but if you make 12-14 on time payments (which you agree upon according to your income) they will DELETE the entire loan history.

    I would ask about these programs, as it is my understanding that you have right to utilize them.

    Also, I am a newbie, so don't take this as gospel truth, but rather do some research on the net and educate yourself about your options.
     
  8. bbauer

    bbauer Banned

    Sounds like good advice to me as well. Whatever, don't just ignore the problem. It won't go away.
     
  9. kit

    kit Well-Known Member

    absolutely... write to the ombudsman, she did, in fact, work miracles for my hubby... rehab is your best option.
     

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