My private school loan is in default and the collection agency wants to take me to court?
I borrowed ,000.00 5 years ago to go to college. I paid it off for like a year then I couldnt afford it anymore with all the interest. They got me for 15% its ridiculous and I cant consolidate because my credit is now 560 because of this.
The collection agency says after all the penalties and interet I now owe ,000.00 its unbelievable. They are going to take me to court if I dont pay. Im sure they will win. I want to negotiate the debt but is it possible to negotiate with them to remove all the bad credit off my credit report. I want to fix my credit to buy a house. Plus do they have the power to remove the bad credit from the original lender?? The collection agency is owned by the original creditor as well. Theyre making all the money. How should I negotaite this best?
Tagged with: bad credit • credit report • creditor • money
Filed under: "How to fix Bad credit so I can buy a house"
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You only have one option.
Send the collection agency a DV letter. You can google this and find examples. This is a dispute and validation letter and is required to prove to you that this debt is yours. Granted, you know its yours, but legal loopholes are our friends. If the collection agency is owned by the original creditor you have a good chance of getting a legitimate validation back, which is not what you want. You want them to overlook your request and file for a lawsuit.
The collection agency has 30 days from the day they recieve the DV (send it certified mail return reciept) in which they MUST cease all collection activiy and investigate the debt. They then must prove beyond all doubt that the debt is yours. The FCRA does allow you to send DVs with private student loans. If it were a government loan, you’d just be screwed. Lucky you, you have options. If they file suit within that 30 days it is considered continued collection activity and is illegal. You can counterfile a lawsuit against THEM.
They must serve you with a summons notifying you of your court date. Read the summons carefully. If ANYTHING on the summons is wrong (hopefully your address) you can take the summons to the court and fill out paperwork claiming that this is NOT your address and requesting that they resend the summons to the correct individual. The judge will recieve your paperwork on this along with the original complaint and hopefully throw it all out. However, with a debt this big you just never know.
If they get a judgement against you, they can garnish your wages and your state tax returns. Judgements remain on your credit report for 10 years. See a credit attorney. They WILL be able to get the amount down because a collection agency is not allowed to charge interest on interest, and it sounds like that is just what they are doing. Do not file bankrupcy, that will not help you.
Last resort: If they don’t validate (and a printout of what you owe is not validation) show up in court and demand that they *prove* the debt is yours. You never know, they may not be able to after this long. Data is lost, misplaced, etc.
Best of luck, I know this must be a very emotionally trying situation. Do not give up!
1. you can not remove your bad credit, no matter whats. its there for good.
2. let them take you to court.. go and tell the judge you need lowest payment arrangements. he will let you.
talk to the judge, tell him the situation. he is not gonna screw you over.
If I were you, I’d file bankrupcy, but talk to a lawyer for your best options. Most bankrupcy lawyers do a free consultation.
be careful with these collection agencies, they will tell you anything to get the money. and do not give them bank information, they will take every dime out of your account and will attempt to take more every day.
Oh, you don’t feel like paying your student loans because you made a bad deal, but you’re hoping for a lender to come back and trust you with $100,000 to buy a house???
BTW, even private student loans cannot be gotten rid of in bankruptcy. There is little incentive for them settle–even then they would probably want a lump sum of 70% of the amount owed and if you couldn’t pay $30,000, I doubt you could pay $21,000.