Hello, I recently received a letter from a collections agency, Second Alliance regarding my student loan from the state of IL threatning that they are going to garnish my wages at a job I no longer work for. This loan has been in collection for more than 10 years and no longer appears on any of my credit report. (Equifax, Experian, TransUnion) I would like to settle with them and get this loan paid off but I would like to know what my rights are in the state of California. Second Alliance provided me with paperwork to file the claim and if I like I can fly to IL to seek hearing. Once they discover that I no longer work for this company, will they seek out my current employer? What should I do? Please help. Thank you in advance.
Thanks for the response. I do believe that it is a Federal Loan. Regarding the actual wage garnishing, the documentation list my former employer. Once they discover that I no longer work for that company, could they seek out my current employer? Thanks.
Yes, they could seek your current employer. For Federal loans they could even take your tax refunds as payment.
Second Alliance is a student loan collection firm. They likely paid off the original lender of your student loan and are now looking for payment from you. They will probably charge interest and collection fees as well. Since you can be garnished or have your income tax taken (if you're married you can keep your spouse's refund by filing an Injured Spouse form) it's in your best interest to contact Second Alliance and offer a settlement if you can. In my experience, they will usually settle for the cost of the principal plus half interest. It won't go away. Good luck!
A quick Google search found thisâ?¦ Administrative Wage Garnishment Because itâ??s a federal student loan they do not need a judgment to start the garnishment, so now is the time to talk to the CA/OC or Federal Student Aid ; whoever funded the loan and ask for a payment plan, because they can garnish up to 15% I would start with 6% repayment and bargain from there. Josh was completely correct they can/will take your Federal Income Tax refund so I would adjust your deductions accordingly if you canâ??t pay. There is a bad joke (sorry if I offend anyone) that if the Federal Student Loan Collection Department was in charge; Osama bin Laden would have been found on September 12, 2001. The point I am trying to make is that you canâ??t run/hide as there is no SOL nor can you discharge them in a BK so what you need to do is discuss a payment plan that works for the both of you just make sure itâ??s not over 15% of your total weekly salary. Good luck with everything.
They do not need a judgment but you will receive a letter in the mail stating that garnishment will begin. You won't be blindsided by it. Talking to whoever funded the loan is a moot point now, Second Alliance owns it. You need to make a payment plan with them. And, sorry, but they will not accept less than the full amount owed (minus half interest and collection costs). They don't have to, they have you on the line for the amount forever.
You definetly want to get in touch with them. Let me tell you from experience, you do not want a student loan to go into default and have them garnish your wages. I have everything clean on my credit report except for a Student loan that has gone into default and it has been very difficult to get over a 600 score. I have been paying on it for over a year now only have about 4 months left, however it totally trashes your scores. Alot of times you can work out a payment schedule then try to go on their rehabilitation program for 9 months and get everything current.
Thank you all for all the informative responses and advice. I will definitely call the collections agency and get this resolved ASAP. However when calling them what should I expect to hear when talking to the representative? Will I need to provide them with my current employer information? My objective that I am hoping for is to give them a call, tell the representative that I would like a payment plan and once it is agreed upon, hang up. Of course it probably wouldn't be as easy because I'm sure they will question my source of income. What should I tell them? Thank you again for all the help. You guys are great!
To help save me on all of my student loans, I got a Direct Loan from the US Dept of Education. It covered all $25k in student loans and I got to select the option for repayment as income contingent. My first year I paid less than $20/month my second year after reporting taxes, my payment went to $110/month which was still less than just 1 of my 5 student loans monthly payment. It was reported that all my student loans were paid in full with no other consequences, and I was in default with all my loans at the time. The Dept. of Ed saved my butt! Google "William D. Ford Direct Loan Dept. of Education" ----------------------------edit--------------------------------- I forgot to add, that I was being sued by a lawyer for all 5 of my students loans.
No, don't tell them your current employer. I probably wouldn't even say if I am working or not. If you do tell them where you work, then why should they offer anything less than what they could forcibly take by garnishment? And don't call from your home phone either. Use a public phone whenever you talk to a collection agency, because otherwise they can bombard you with phone calls, and also if they have a judgement (not necessary with student loans) they can obtain payment information from your phone company (i.e. the bank account information from the checks you pay with) and proceed to levy your account.
