Student Loan Question

I have a student loan from years ago. It is in good standings, finally, but I can’t afford to pay too much on it and what I am paying barely covers the interest. My mother suggested that I call them and see if I can get them to stop the interest. My question is, can they do that?

I would be able to give them an extra $100 starting in September on top of the $27 that I give them now, but have paid quite a bit of interest that it would be great to get them to stop the interest while I pay them $127 a month. In case you need to know, the loan is for just over $3,000 and seems to never go down.

I don’t think they’ll stop the interest, but you might be able to get a deferment or a forbearance. I had a hardship forbearance for 2 years (my payments were $300.00 per month), but the interest will continue to accrue and capitalize if the loan is not subsidized. Have you consolidated yet? That might lower your rate and lock it in.

Re: Help, I need advice

You should respond. They will file in court and because you did not respond, they will be awarded a judgment against you.

I had the same thing happen to us, but we had paid the debt in the meantime (between the letter arriving and the court action). We got two letters. One we had to sign for.

After the judgment was made, I got a letter from the court AND the attorneys. I copied the letter, with a copy of the cashier’s check that we paid the debt with and sent one directly to the JUDGE and one directly to the ATTORNEYS. Both were mailed Priority Mail with a Signature required. (It cost a little more to mail, but I wanted them to sign for it.) I kept all of the originals. I included a letter to the judge explaining that I had already paid the debt and the judgment should not be made against me. It should not be on my credit report.

I received a letter from both of them (Judge’s office and the Attorneys) stating that the judgment had been set-aside and will not appear on my credit report. The letter also states that I owe nothing more. There is no judgment against me. I kept all of these letters as well, in case anything comes up.

The attorney (collection agency) will sue to get the money. If a judgment is made against you, you can send supporting documentation in on your behalf. If you don’t pay, it will go against you and you will be ordered to pay. They will not hesitate to use all legal paths to get the money from you – garnishing your wages is one way they go after quickly in most cases. That happened to my brother in law.

The court order was sent to his employer and every paycheck has $$$ missing that is paid directly to pay back his debts. The court had him appear and told him the amount they would be taking. The collection agency is getting less than they wanted in each payment, so instead of paying it back in 3 years, it will be in 6 years, I think, but they got the judgment against him, it does appear on his credit report and he has to explain it every time he goes to get a loan, if they approve him (and with higher rates & fees).

They know that most people have a much harder time qualifying for bankruptcy nowadays, thanks to the new laws, so they are much quicker with going to court and suing for the money they are owed. They also know that if you do file for bankruptcy, you will most likely get Ch 13 and be ordered to repay them (even if it is not on their terms, they still get the money). Most people don’t go the Ch 7 route because you lose everything. You are forced to sell what possessions you have to repay the debts. The new laws makes it really, really hard to walk away from your debts 100%.

My advice – write them a letter, mail it with signature required and keep copies for yourself. If you have to go to court and appear, show the judge the letter. It will show that in good faith, you wrote and explained that you can only afford to pay $1 a month towards the debt, not the $10,000 they are demanding.

Paperwork trail helps. Don’t just ignore them.

Help, I need advice

Some of you may remember me mentioning I got a letter from a lawyer stating they were collecting a debt, basically the letter was written word for word like letters I have received from collection agencies, so I just thought it was a scare tactic. Either way it said I had 30 days to acknowledge or deny the debt(which I never did), and that was no more then 2 weeks ago.

Well, today, we were served papers from this same legal office and I’m not exactly sure what it means since it came from the legal office and not from the courts. My husband says if they are sueing us the papers should come from the courts. Is he right? However, he says it’s likely they will probably sue soon considering they sent us the papers they did today. This is what the letter says. Any advice on what this means would be great.

You are hereby summoned and required to appear and defend against this action, which is herewith served upon you, by serving upon the undersigned and Answer or some other proper response within twenty (20) days after service of this Summons upon you, exclusive of the date of service. If you fail to do so, judgement by default will be taken against you for the relief demanded in the complaint.

We did contact a lawyer today and they are sending us bankruptcy info within the next day or so and once we get that we can set up an appointment to see where we stand.

Bank of America continued

I have received an offer from my Capital One to transfer balance at a lower interest rate 6.99% for the first year, 4.99% afterwards till the balance is paid. I don’t have a big enough credit limit to transfer the whole of the BofA balance, but I can knock off a large chunk, which would lower the monthly payment(I hope, who knows they might come up with a way to not change anything maybe a new rule that says they raise payments if you lower your balance, it wouldn’t surprise me).

My BofA account has the highest balance that’s why I was putting the most money on it so it would come down fast, but if I do this and it lowers the required monthly payment, I can make higher payments on the account I make the transfer to, get it back down again and once again transfer another hunk off of the BofA account. I’ll give more thought to this plan, I have until the 20th to use the offer.

Think you have a good idea here, Chris. I realized that I didn’t even know my Congressman’s name. Found the answer to that, and came across this bit of information, about writing to my Congressman. I plan to write to ask what can be done about the credit card companies just being able to raise the interest rates any time they feel like it, not about helping me with my problem with B of A.

I realize that there are 2903 people in this group. What if we all wrote one letter to our Congressman and asked to get some help to control the ever rising interest rates. I am sure that every body would rather pay off their debts in a faster amount of time with a lower interest rate.

Student loans and bankruptcy

The attorney I met with regarding bankruptcy told me the court won’t allow me to pay my student loan after I file. So what do I do then? I have made my SL payments without fail for years. I had a forbearance for about 6 months once and other than that, they have been paid every month. It will be a forced default, then, if I’m not “permitted” to pay it. What do I do?

This is not true. I work for Nelnet as a Bankruptcy Coordinator. Student loans are non-dischargeable unless it presents undue hardship. If it does you must file and adversary asking the judge to discharge those loans. Most judges will not discharge student loans.

This is how it works for the loans we (Nelnet) service. . .

Chapter 7 – Borrower’s loans are place in an auto stay pending the outcome of the bankruptcy. Once the bankruptcy is discharged, dismissed or closed w/out discharge the loans are placed back into servicing. Interest continues to accrue on the loans. We are unable to sent statements or make calls to the borrower during the bankruptcy or we violate the automatic stay. The borrower can continue to make payments on their loans we just cannot send them statements or attempt to collect.

Chapter 13 – Borrowers loans are transferred to the guarantee agency during the term of the bankruptcy. If the bankruptcy is followed through this is usually 3-5 years. Again, the guarantor is not able to collect on the debt but borrowers can continue to make payments. Interest continues to accrue. I file claims on behalf of the guarantors and some trustee’s allow payments to student loans and others do not because they are non-dischargeable debts. Once the bankruptcy is discharged, dismissed or closed the guarantor returns the loan to the lender/servicer to begin repayment. Once again, interest continues to accrue through the bankruptcy.

What case are you filing and what state are you in?

If credit report says

If creditor indicates bankruptcy on credit report, has a high balance but has no nothing in the balance should I leave it or ask to have it changed to -0- due to bankruptcy or will they change it?

Tracking spending

For many years I kept a checkbook but since checks are rarely ever used in our family, I just look at my bank statement on the internet to see what has cleared each day. Is anyone using a new way of tracking spending other than checks? Is it important if I try to buy a house?

Are these the companies that advertise on TV?

Are these the companies that advertise on TV that tell you they’ll help you get out of debt and they handle the creditors? If so, sounds like false advertising to me.

On another note, notch one more for CitiBank being scum. Apparently, they are continuing to harass the attorney who is helping me with my mom’s small estate. Guess they love collecting from a dead person.

Might well be. I saw an ad for something like it and I said to self “No WAY!” If they give a website, go look over what they promise. ask them if it ins’t in the FAQ’s if they leave YOU to field the phone calls and hassle the threatening notes etc. All I know is I’ve toughed it out, and am getting ever less in debt every month.

Which company rejected you? The credit card company or the one who was to help you settle your debt?

I meant $50.00 a month for their admin fee

I meant $50.00 a month for their admin fee…. (Yes, I’m having more coffee here) and that YOU are left to handle the calls and threats from creditors…. These companies then take your money and put it into an account for you (Of course, THEY get the interest on it…) and then when about 7 years have passed and your in the mud, they offer to pay the debts 10 cents on the dollar or the like. But you are left to fight them off while these ‘settlement’ companies rest on your money.

Unfortunately, By this time, the companies have no doubt dragged you down, sent your debt to a collector and as you’ve seen before with ‘no activity on the account for seven years or so, it goes away…’ they re-activate all the crud.

London Financial was one such beast, and I pulled out of that crud after eight months of psychological torture phone calls and almost losing my home.

Home loans and such aren’t on my favorites list either. Even if you get a loan thirty year fixed, you are paying 3 times as much to an interest bearing loan than if you tough it out for a couple of years more. Low interest aside, you pay more for the time factor.

I’m out of debt by settling, but it was a collection agency

I’m out of debt by settling, but it was a collection agency. They’re paid off. I am now paying another one I closed to keep the payment low, even though I am going way over their minimum. So, in less than a year, I’ve gone from owing them $5240.00 to $3563.00.

If it makes the interest freeze and the payment stay at an amount you can both work with, deal with the company you owe directly. Some of these other companies have you send them an amount which they take $500.00 ‘administration fee’. These are for the most part, cons.

I got the company I’m paying off now to work with me by saying “Well, I’m on low living money. If you won’t work with me, I guess you’ll have to sue me then, as I can pay that amount, and you won’t work with me. I guess I’ll have to default on it then.” WELL! she asked me to hold and came back with the ‘closing the account, level payback of something *I* could work with too’. I was just so dejected at the time, I frankly did not care what they did, but I knew sueing me would actually wind up ‘costing’ them more than if they worked with me.

Has anyone ever settled a debt?

My husband and I heard that some debts can be settled for pennies on the dollar. We have researched and have found lots of info on this. Has anyone in this group settled any debts as such and can you share any of the process and how long we should wait until offering to settle.

I came very close to doing this a few month ago – but had such a ominous feeling about it I didn’t end up doing it. Then dealing with the rejection of the company really made me glad I didn’t do it with that one. So I look forward to hearing the replies of others.