I have defaulted on some student loans and am now being sought out by debt collection agencies (NCO Group and CTi, to be specific). I have not agreed to anything yet with them but am looking to go into a loan rehabilition arrangement. However, with everything I've read on the internet thus far, I am more confused than ever as to what I should/shouldn't say, how to ensure the agencies aren't taking advantage of me, etc.
I have little to no money to spare (or else I would have paid my loans off!) to hire a lawyer but am afraid to do this alone. Can I communicate with the agencies via letter, since I am very nervous on the phone and am scared I might agree to something I shouldn't when I have to answer immediately?
I have seen letter templates affirming a payment arrangement that was determined over the phone, but none where the letter is the initial payment arrangement offer. Would using a letter (in lieu of talking on phone first; I've already talked to them once and would not relish doing so again) to suggest we work out a loan rehab agreement and how much I can pay be okay?
Thanks so much, in advance.
1 Answer from Attorneys
Write a letter and ask them to send you a financial statement. If its a federal loan they take about 15% of your pay so if that is what you are offering (again they will need to see financials on you) then that would be reasonable. Send a letter via certified mail, return receipt requested.
Not sure what you are confused about - if its your debt its your debt. Is it private or federal/public? If its private, then the lender has 4 years to sue you after the date of your last payment if the loan is in default. So talking to them and admitting its your debt after expiration of the statute of limitations might be a problem. If its a federal/public student loan, you do not have to worry about reviving a statute of limitations because there is none. The loans stay with you until you die.
Other than a statute of limitations question I am not sure what else you could say that would get you in trouble. Here is a basic script: you call and talk to a rep. about your account. Is the loan in default already? If so then tell them that you are sorry you have not paid but you have limited means (describe the financial hardship) and want to make arrangements. Ask them for a financial statement so that you and they can see what you make or have available and what you can afford. They may even go over it with you on the phone. If you are able to work out the terms of how much and when ask them to send you a letter or agreement with these terms They will do so if they want money. No agreement no money. If they balk or get nasty, too bad for them. You do not pay.
Worry about debts that are federal/public student loans first since they can garnish your pay even without court order. Then worry about private student loans which are still within the statute of limitations (if these are PA loans and 4 or less years have passed since the date of last payment then the lenders can still sue). If its been 4 or more years since you last paid, I would not worry about these at all for right now.
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