A few quesitons about defaulted loans collections

[flea77]

I know that if I read every post on all the boards that I could probably figure this out but I will hope that you excuse my shortcut.

Many years ago I defaulted on some student loans. I was young and stupid. Recently I attempted to find out who had my loans and it seems that Pioneer credt recovery found me and have started calling me. I am getting nervous about their threats and the little reading on the subject I have done they say is BS so I would very much like some good answers with links to places I can verify the information to them.

1) They say I am not entitled to "verification" of the loans. In other words, they do not have to send me copies of the original notes, but they might. But even if they do they will continue collections actions and start garnishing my wages.

2) They first said they can take 40% of my paychecks, now they say 25%. I thought I read somewhere it was 10%?

3) They say that I can not rehab my loans and that I must pay in full immediately. There are no options for payments.

4) They said that if I refuse to pay in full immediately that they will enter it as a "refusal to pay" and garnish my wages.

They passed me around to three different people in the agency and all three threatened the same things. I am really confused. I want to rehab my loan (if I didnt, I wouldnt have gone looking for the original creditor and therefore been found by Pioneer) but there is no way I can pay it all at once, and no way I can afford having my paycheck cut by 40%. If it comes to pulling that much out of my checks I can quit and just work there for contract labor as I have done before.

Please provide me with some direction to pull myself out of this hole. Thanks!

[DocDon]

Of course that's what they're going to tell you. They're a collection agency and they want your money. They don't want you to rehab this loan with the Department of Education.

Send them a DV letter, and then go to this site:

http://www.ed.gov/offices/OSFAP/DCS/

I would get on the phone Monday and talk to the DoE and see what you can do. Then we'll punish Pioneer for threatening you like that.

[flea77]

What is a DV letter?

Thanks!

[DocDon]

I'm sorry. I didn't realize you were new to the board. Welcome aboard!

A DV letter is a Debt Validation letter sent primarily to Collection Agencies that tells them you dispute the debt and that they are to get validation from the orginal creditor and forward that info to you before they can proceed with collection activities. Be sure to send this Certified Mail, Return Receipt.

If this is a Federally backed student loan, you can rehab it through the Department of Education. Sending the letter tells the collection agency to go piss up a rope, which is perfectly within your rights. Here is a sample letter:

--------------
Your name here
123 DV Way
Biteme, CA 56789

RE: **********

To Whom It May Concern:

I am aware of my rights to validate this debt. This letter is being sent to you in response to your attached letter. This is not a refusal to pay, but a notice that your claim is disputed.
Under the Fair Debt Collections Practices Act, I am requesting proof that I am indeed the party you are asking to pay this debt and there is some contractual obligation, which is binding on me to pay this debt.

You should also be aware that reporting such invalidated information to major credit bureaus might constitute defamation of character, as the negative marks on my credit report harm my credit and prevent me from enjoying all the benefits of good credit. I am sure your legal staff will agree that non-compliance with this request could put your company in serious legal trouble with the FTC and other state or federal agencies.

In addition to the questionnaire attached, please attach copies of:

Agreement with your client that grants you the authority to collect on this alleged debt.

Agreement that bears the signature of the alleged debtor wherein they agreed to pay the creditor.

An accounting of all purchases, fees, interest and other charges that comprise the alleged debt and an easy-to-follow explanation of how each was calculated.

Proof that you are licensed in the state of (your state here), including any applicable license number(s).

A certified copy of any contract(s) bearing our signature(s), authorizing your client, (OC here) to assign or sell this account to you for the purpose of collection.

Proof that you are legally entitled to collect on the account referenced above.

I will accept only the information I am requesting, in full and in writing, to the address listed above, no later than thirty (30) calendar days from your receipt of this letter. I will not correspond with your company or any representative(s) thereof, including but not limited to attorneys, other collection agencies and your client, until I receive and review the information requested above, in full, so that we can make reasonable efforts to fulfill any obligation that may exist between your client and I.














Should I receive anything from your company or its representatives regarding the account referenced above, other than what I outlined above (or a statement of inability to validate a debt and full release of same), we will construe it as a declaration of your inability to validate the alleged debt and consider your claim made pursuant thereto as frivolous. I will also file formal complaints with your state's Banking and Finance Bureau, the Federal Trade Commission and the Better Business Bureau.
Best regards,




Your Name
(Do not sign this document!!!!!! Forgery is rampant amongst Collection Agencies and your signature may appear on documents you never signed! Do not add your Social Security Number, Banking Information, or Driver License Number.)







Debt Validation Form Questionnaire to be returned to me for Account #*******
Original Creditor's Name:_______________________
Name of Debtor:_______________________________
Address of Debtor:_____________________________
Balance of Account:____________________________
Date you acquired this debt: ______________________
This Debt was: assigned__________ purchased__________
Please indicate any credit bureaus to which you have reported negative marks:
Experian ______
Equifax ______
TransUnion ______

[icantstandcras]

YES! Student loans *held* by the government are some of the easiest problems to fix.

Get on the web and find a phone number for an actual person in the department of education - NOT the 800 number. Call someone in an office somewhere that handles "student financial aid" - the ED website has a staff directory. It's very easy to find.

Get someone on the phone and be as nice as possible and explain that you want to start repaying your loan. Kiss as much ass as you can. They will sound skeptical and act nasty at first, but KEEP KISSING ASS AND ACT AS NICELY AS YOU CAN. Eventually, if you sound sincere enough, the person on the other end will offer to help. Tell them that you want to repay your loans to the Fed government and that you want to avoid the collection agency. BE NICE AND BEG AND BE EVEN NICER.

The person on the other end can fix your problem almost immediately. They can even "recall" the loan from the collection agency and waive all of the bogus "collection fees" that were charged against the account. All you have to do in return is agree to make a regular payment every month that is at least 1% of the loan principal + accrued interest. Once you get the person on the phone to agree to this, then ask him/her to send you a fax that summarized your conversation. BE NICE AND KEEP KISSING ASS UNTIL YOU GET THE FAX.

Once you get the fax stating that the government has agreed to accept your payments, THEN you can tell the collection agency to F*** off, but be careful until you know that you are in tight with the Feds. Otherwise, you might get sued if you piss off the wrong CA.

Once you make 12 monthly payments in a row, call the person back and ask that your loan be "rehabilitated". They will then start treating it like a normal student loan account and will be much more helpful in fixing your credit report. You will also be eligible for consolidation and refinancing.

Drawbacks

- The ED person you will talk to is an EDUCATOR and not a BANKER. They will not discuss amortization tables or terms or anything but a regular 1% payment, mainly because they likely won't even understand what you are talking about. Don't try and negotiate these things because they will just ignore you. It's not really important anyway, because all the government cares about is that you are paying, not that it recovers the balance. Your $50k loan is less than a drop in the bucket of the federal budget.

- Accordingly, if the most important part is the payment, DO NOT MISS A PAYMENT OR BE LATE. They will slam the door on you and unleash the collection agencies all over again and likely will not help you a second time. APPEARANCES ARE EVERYTHING!

Hope this helps.

If you have a defaulted fedeal loan that is actually held by a private guaranty company or bank (but not a collection agency), then you are in much much worse trouble. Imagine a credit card company with no Statute of Limitations and unlimited ways to harass you - just about the only thing that works with those guys, is large cash payments. They won't negotiate and they won't hesitate to let the collection agencies run wild. You can't wait them out and they know it.

How do I know? I was going through my credit report six months ago and saw a company that I didn't recognize with a VERY derogatory entry on my credit report. So I sent a letter for verification. Bad idea. In return I got copy of a promissory note I signed 11 YEARS AGO during my FRESHMAN YEAR OF COLLEGE! I didn't even remember I had signed their silly little note.

I understand that it was my responsibility to keep them notified of my whereabouts, and I would have, if I had known about the damn loan. Instead I was an 18 year old kid and I'm paying for it 11 years later.

Apparently they had lost track of me after graduation and, instead of being grateful that I had contacted them and wanted to work something out, they took my goodwill as an opportunity to come after me. Nice guys. I did some research and really I have no choice but to do what they say - "pay us in full - or pay our collection agency huge fees and interest rates - or we will sue. Also, Congress gave us unlimited powers to harass you."

They are bankers with special powers and they know it and act like it.

Conclusion - when I have kids, they will never EVER borrow money to go to college. Financial aid is a sham and just another form of indentured servitude.

[Stressin']

Hi. I know the last post on this subject was a couple of months ago, but I'm in a similar situation.

Once you get the fax stating that the government has agreed to accept your payments, THEN you can tell the collection agency to F*** off, but be careful until you know that you are in tight with the Feds. Otherwise, you might get sued if you piss off the wrong CA.


How could the ca turn around and sue you if the OC now has control of the loan?