student loan and collection agency

Discussion in 'Credit Talk' started by frankowes, May 18, 2001.

  1. marci

    marci Well-Known Member

    See!!!

    I told you they lie like DOGS. Amazing.


    Only talk with the lady rep for the duration of your rehab. Get her direct extension. That will save you a lot of grief.

    Also, the minimum payment should be 1.5% of the total amount owed. If that is too steep for you, then ask her to send you a "financial hardship" form requesting a lower amount to be paid each month - yet still qualifying you for rehabilitation.

    If she lets you make lower than 1.5% payments, then make sure you get a letter from her stating that the ________ montly payment will be accepted but still count as qualifying payment for rehabilitation. If you don't trust them on this point, then just agree to the 1.5% and eat peanut-butter for a year. :) As an aside, this is why it is important to get the principle, collection costs, and interest itemized to you immediately. You need to know exactly how much you owe and what the 1.5% should be.

    After the first month's payment, call the guarantor to verify that you are in the rehabilitation program and that your payments are being postedto them on the proper date. The CA should send you a letter 10 days before the checks clear your bank advising you of the draft. Save those letters and your cancelled checks.

    Glad you got the info you needed...
     
  2. roni

    roni Well-Known Member

    Just so YOU know, the dates on post dated checks are not honored by any bank. Furthermore, you do not have to send post dated checks to qualify for a rehab program. You sent them post dated checks. Well, they COULD in turn deposit those checks at any time that they want regardless of the date AND your bank will pay them. I just do not understand why you sent in postdated checks. I quoted to you verbatim the law that allows you to set up rehab and I posted on this board the website to complain to at the dept of ed if they do not set up rehabilitation as you requested.

    WEll, I sincerely hope that this rehab goes smoothly for you. But since I know that you DONOT have to set direct access to your accounts or post dated checks to do rehabilitation, I myself am skeptical of the honesty of your lender.

    Good LUCK!
     
  3. marci

    marci Well-Known Member

    frankowes,

    As always, any advice you get on this board should be taken with a grain of salt. I had not planned to respond to this thread following Roni's last post, but as I was perusing the Motley Fools budgeting board a few minutes ago, I found the following response from a Fool member re automatic withdrawals wrt insurance/phone companies and automatic billing:

    "This is one reason I don't like to let a vendor access my bank account. If YOU initiate ACH items, they're for the amount you specify. If THEY initiate the item, it's for whatever and whenever they wish. The agreement you sign gives them authorization to do so. And if they decide they've made a mistake in the past on the amount, they can completely wipe out your funds "rectifying" it. "


    My suggestion re 12 specific check numbers rather than monthly automatic ACH is to prevent unauthorized access to your account. It is true that with either post-dated checks or ACH, the company could "mess up" and post a draft twice or for the wrong amount. But without a paper trail of physical checks to look at - as is true in ACH transactions - it becomes you word against the bank's word as to the dates and to the amount if the CA initiates the transaction.

    If the company posts more than one check in one month or for more than the amount, you will get the cancelled checks with the date and amount on them and you'll have ammunition along with the signed rehab agreement stating the amount due EACH MONTH for 12 months AND the letter from the CA 10 days that BY LAW they have to send you prior to a withdrawal to take to the Ombudsman's office. Remember, the Fair Debt Collections Practices Act will apply to the CA in this case and the CA will be financially liable for receiving more than the amount due in any given month or doing anything different than the letter they sent you prior to the transaction stated.

    If they don't send you that letter 10 days before each draft specifiying the amount and date of withdrawal, then demand that they do, as that is a big violation of the FDCPA.

    Now, it is true that you don't have to provide 12 post dated checks/check numbers in advance to do rehab. You set up a payment on a month by month basis. But, for me I didn't want to depend on myself (and then the post office) to get the check there on time or make the call on time. Most CAs don't have online payment and if you are late and miss a month (even if by one day) you are then disqualified and will have to start over - if they choose not to sue you first for the full amount.

    To each his own. I knew my limitations at the time (the very fact that I didn't send in payments on time is part of the reason I ended up in default in the first place) and I didn't want to screw up the rehab - which in my opinion is a very generous offer to clear people of damaging student loan defaults.
     
  4. roni

    roni Well-Known Member

    EXACTLY!
     
  5. frankowes

    frankowes Well-Known Member

    Hi, I have been busy at work and stuff so I haven't had time to check the board the last day or two.

    I think roni is right. I have been thinking about this the past 24 hours or so and I haven't sent them the checks. i'm not going to. I am going to mail them one check a month. It's funny....when it comes down to it (I have been dealing with this the past week or so) we are the ones with the money and they will take whatever they can get. It's not like they will not accept the money I send them.

    I am now confident that this is going to work out okay. If you guys weren't here to banter with I think I would have caved in right from the start. :)

    I am paying 1% a month of my balance. I can afford it...I need to pay it. So no more stoli martinis 3 times a week at happy hour. I don't need it anyhow. I've been wanting to take care of this the past year but just didn't know how to get it started. I was afraid that I would get sued or they would start garnishing my wages... like I would open up a whole can of nasty worms.

    One thing about the ACH thing....I am so pissed off that the CA told me that that was the only way they would do rehab with me. How F***IN ridiculus. I would never allow anybody direct access to my bank account.


    The funny thing about this is that I am feeling more confident with myself. I just hope somebody else in my situation reads this thread and realizes that there is a way out of this mess. I guess the next thing is to wait a year and see if they really remove the negatives from my credit report. A year is nothing, It's taken me about ten to get in this mess. I don't want to think about it now. The worst thing I did was rack up all of these student loans. I figured it out. I could own a jaguar on these payments.

    Goodnight guys I'm tired.
     
  6. epcra

    epcra New Member

    This thread is perfect! I'm in a similar situation to that of frankowes.

    Roni mentioned that one of two options was consolidation, which would
    "get your loans 0 balanced in about 3-4 months but you will still have the default status on my credit report for 7 years from the default date with 0 balances."

    My default date may be just over seven years ago. Does this mean that if I consolidate now, in 3-4 months I will have no default status? Roni? Anyone?

    I'm now in a position to make a lump payment but am seeking the best route to limit collection costs and restore credit.
     
  7. roni

    roni Well-Known Member

    That would depend if your lender who holds the defaulted loans will no longer report it. How long has the loan been on your credit reports now? If paid they usually are fair enough to limit the reporting time to 7 years. Consolidating or paying will not restart the clock. However, if it was never reported they just may decide to report it now. Technically, they can put it on your report for 7 years remember. However, it can not be longer than 7 years if PAID(or consolidated). Remember rehabiliating the loan would free you of this worry. It will take about 3 months to consolidate and 12 months to rehab.... I always say that I consolidated ONLY because I couldn't get my army commissioning without removal of my default status on my loan. If I wasnt in such a hurry, I never would have consolidated and would have done rehabiliation. Good Luck!
     
  8. marci

    marci Well-Known Member




    Frankowes, I'm glad you made your own decision re how to pay during the rehabilitation. However, as to the above statement, student loan rehabilitation is not your run of the mill dealings with collection agencies (where they will just accept any old payment anytime and continue doing business as usual). The guarantor can reject the rehab agreement if the payment is not received on time within a designated month. Even if they accept the payment, they can deny a person rehabilitation just for being late once and after that they are legally open (via the Dept. of Ed.) to doing a lot more agressive things to collect the debt.

    I'm not in any way suggesting that you're going to hurt your rehab efforts at all with your method. I am suggesting that at least for the 13 months during the rehab - gettting the payments there on time is nothing to play around with, so I suggest that you be extra careful with how you handle those particular payments.

    Yes, they will accept the money and "take whatever they can get" as you said above; however, your goal is to get them to do this AND get you rehabilitated as well. While they will always get every defaulted penny owed to them eventually (i.e. no SOL), a person *may* or *may not* get a rehabilitation.

    For me, it took giving the CA 12 post-dated check numbers in advance . But, then again, I had enough written documentation from the collection agency and the guarantor to be comfortable that I had proof as to where and how much of my money was going and for how long.

    By doing this, during the rehabilitation I prevented the collection agency, the post office and - most importantly - myself from becoming my own worst enemy.

    IMHO,
     
  9. epcra

    epcra New Member

    Let me see...

    The default was reported to the credit agencies around '94. My most recent credit report doesn't list the default (I guess it's definitely been over 7 years).

    So, technically, would consolidation be a faster fix in my situation than rehab (because consolidation wouldn't restart the clock)? Would one option cost more $ than the other?

    I just want to take care of this loan once and for all. I may not be in a position to make payments on the rehab next year.

    Thanks,
    ep
     
  10. roni

    roni Well-Known Member

    FYI: You should get a written agreement with the lender before starting rehabiliation. MY AGREEMENT states that I can not be more than 15 days past due on a payment or the rehabilitation restarts all over again. You could easily set up automatic payments and be late because you are alittle short in your account for whatever reason. I did not find it a big hassle to mail a payment check each month. It is only for a year. But anyway my point is to make sure you get the appropriate terms established in the agreement. My lender did it perfectly. I really dont see why this is still such a big discussion. I feel frankowes has made a WONDERFUL decision.....His OWN!
     
  11. frankowes

    frankowes Well-Known Member

    I see your point. However I am going to send them one check a month. I can be very disciplined if I need to be. The post office is three blocks away. I'm going to send it certified every month.

    I was just wondering. The CA told me that these payments were all going towards the interest. Does this mean I will be able to take the interest deduction from my taxes next year?
     
  12. frankowes

    frankowes Well-Known Member

  13. frankowes

    frankowes Well-Known Member

  14. marci

    marci Well-Known Member

    Frankowes,

    Good question. You should double-check with the IRS, but I think you will be able to take the deduction. Your guarantor will (get on them if they don't) send you an interest disclosure form detailing how much your interest was for this year somtime next January.

    For me, the amount I paid on interest wasn't enough for me to take the deduction. :-(

    Before you file with the IRS, double check to make sure that you are removed from their "tax-offset" list (so that you will get your refund, no problem).

    Also, wrt Mozilla's problem re loan status code, after your rehabilitation also double check at the National Student Loan Database website to make sure that the guarantor updated your loan correctly as a DP (once defaulted, but now paid in full). A non-updated DU (defaulted unresolved) or a IR (in repayment) will hinder any future loan requests. This report is just as, if not more, important as your credit report.

    Like Mozilla, I'm having this NSLDS problem with American Student Assistance even though my rehab is complete.

    Glad that I could be of help,
     
  15. roni

    roni Well-Known Member

    You will get a statement from the CA stating how much interest you paid to the student loans. As long as you dont make over $75K/yr you can deduct the interest. I am not sure of the exact income cut off or the cut off for married persons. But if you make less than that you can deduct the interest paid. Good choice.
     
  16. marci

    marci Well-Known Member

    Roni,


    Just b/c you deem a discussion unimportant or your advice to be completely sufficient for all visitors on this *public* thread - does not by any means make it so. All advice is valuable on StraightTalk, not just yours. As has been said a number of times before, your "proprietary" attitude toward creditnet is turning away some very reasonable contributors.

    Warning visitors not to screw up rehab payments is excellent advice, seeing that a good number of the people rebuilding credit on this board - including myself - are digging themselves out of poor borrowing habits which got them in trouble in the first place. The benefits of rehabilitation along with the potential costs of wrecking a rehabilitation are worth *someone* on this board giving ample warning to folks who may not understand the seriousness of government debt.

    If my comments on this thread/group waste your time, then please put "marci" on ignore. That's exactly what the PBM put it there for.

    I won't see your response, since I will use that function for you as well. For all the good advice you can give, others can and do give comparable advice - but without the "my way or the highway" attitude that invariably comes along with yours.
     
  17. roni

    roni Well-Known Member

    Marci, I didnt even bother to read your post. I could tell by the first sentence that if was posted just to "start something".

    Frankly, I think you have had a funky attitude throughout this entire thread. My statements did not even come close to mean what you implied. And then you use about 4 paragraphs to talk about absolutely nothing. I am sure Frankowes didnt want ALL OF THIS when he asked this question.

    Regardless, you and I both have done excellent jobs in answering his question. He had made his decision. Remember this is his credit.

    Let it go! Let it go! and enjoy your Memorial Day weekend...dispite the rain.
     
  18. roni

    roni Well-Known Member

    Are you saying that it has been stated on this board that I have ran valuable posters away? I dont recall any such non-sense. WHAT BUG FLEW UP YOUR BUTT?
     
  19. roni

    roni Well-Known Member

    You know what Marci, I just cant stant this any longer. I am addicted to this board and credit repair. This is quite obvious. But people like you can just blast off for no reason makes me shake my head at this screen. I have information to offer from my experiences and it is definitely more valuable to hear information from more than one source. How you turned on me is unbelievable. But after 2900 post and countless attacks, I am FINALLY retiring my energy and time from this site. I am sure the buttheads will say,,,you've said this before and again, but you know what...I dont care what you say, because I wont be around to read your responses........ I truly hope everyone gets what they want from credit repair. That is all I ever wanted.
     
  20. frankowes

    frankowes Well-Known Member

    Look, you were both a big help. I don't think I could of made a decision without everyones input.

    As far as the student loan interest deduction goes, I was just readin the tax codes and I don't think I can take the deduction. You have to make the payments during the first 60 months the interest is due. So if my payments were due starting in 1995 none of the payments I make now are eligible. However I think they were consolidated in 98 again so some of my future payments may be eligible. But I'm not sure...I'll have to check. Also this isn't an itemized deduction, it's an income adjustment so anybody can take it as long as they are below the income cutoff. You have to fill out 1040A not the EZ...I'm still reading.
     

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