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possible reprieve by US Debt of Education?

Date: Sat, 08/26/2006 - 19:53

Submitted by enrock_q
on Sat, 08/26/2006 - 19:53

Posts: 12 Credits: [Donate]

Total Replies: 8

possible reprieve by US Debt of Education?


I never thought I'd be happy to receive a letter of outstanding debt, it may have gotten me out of a difficult situation.

In mid July, I was contacted by allied interstate regarding a defaulted student loan in the amount of $8,000. I admit that I was careless about paying back my loan but I don't recall my loan being that high.

The Allied rep was very bullying in his approach and insisted that issue a large sum of money through my checking account.

I've never been through this situation before so I decided to investigate the rules of proper debt collections through this site (thank you forum community!) before I issue payment.

I mailed AI a debt validation request letter that fell on deaf ears. I attempted to resolve the situation with the US Dept of Education and my request for rehabbing my defaulted loan was denied. I was told by a dept of ED rep that my only option was to deal with AI. That was a situation I couldn't stomach.

Six weeks have passed since AI first contacted me and I resigned myself to being totally screwed by those
shakedown artists. But that situation that may have changed today.

I received a Debt Statement in the mail from the US Dept of Education which states that the US Debt of
Education holds the following defaulted student loan.

(The letter reads as follows)

[quote]US Deprtment of Education

DEBT STATEMENT

The US Debt of Education (ED) holds the following defaulted student loan(s) or claims(s) which it intends to collect by Treasury offset against any Federal refund and other Federal and/or state payments you may be entitled to receive in the future. Please read the enclosed notice of proposed offset for an explanation of your rights and the manner in which you must excersise them to avoid offset. ED may have already referred for offset some of the debts listed on this statement, as explained in prior notices. Any in-person hearing will be held in Chicago.
[/quote]

The bottom part of the page outlines my record of payment, interest accrued and the total amount owed which is

$6,300. Almost $1,500 less than Allied told me it was. And plus the letter made no mention of Allied
Interstate which claimed it was holding my debt.

The back part of the letter also had an interesting statement. It reads as follows.

[quote]As explained in the notice of proposed Treasury Offset, you can avoid Offset by making satisfactory
arrangements to repay your debt(s). For information on your repayment options, call: (800) xxx-xxxx.
[/quote]

The debt statement included a payment slip which requested payment. I rushed down to my local bank and mailed a larged sum of money to the payment center in Greenville Texas.

I intend on contacting the US dept of Education regarding this debt statement but should I receive this letter as a positive sign that I was granted a second chance or am I being too enthusiastic. It's clearly evident that I would like to resolve this matter with the US Debt of Education than those wankers at AI. I would really like to have that dark cloud disappear permanently.

Your insights and interpretations to my query would be much appreciated.


Cordially,


I think dealing with the dept. of education directly is a much better choice than dealing with the collection agency, especially when you are contacted by allied interstate who happens to be the worst debt collectors.

You sent a large amount of money to the dept of Edu. Did you get a confirmation email from the dept of edu? The email will confirm that your money is going to the right place.


lrhall41

Submitted by Christina on Mon, 08/28/2006 - 12:18

( Posts: 438 | Credits: )


Thank you Christina for your response. I sent payment the same day I received the Debt Statement letter from the US Dept of Education. I was admitedly very excited when I received the letter because I knew it was a possible invitation to resolve my debt situation under satisfactory terms. I absolutely loathe Allied Intersate! At present, I have yet to receive a confirmation of receipt from ED.

If I do not receive a response, Ill just contact them and perhaps we can work something out. But I dread the chance that the ED will deny my account rehab plight. They've done it once before and it would be difficult to deal with another huge disapointment.


lrhall41

Submitted by anonymous on Mon, 08/28/2006 - 17:42

( Posts: 202330 | Credits: )


I used to collect student loans. You do have the right to rehabilitate that loan provided it is not a Perkins loan, or an N loan. Direct loans, Guaranteed, and Federal loans can be rehabilitated. Unfortunately, the truth is that once a student loan is defaulted and sent to a collection agency, contacting the DOE is not an option.


lrhall41

Submitted by Jedi Mistress Ari on Sat, 09/09/2006 - 17:28

( Posts: 2192 | Credits: )


Here is someone else who has had a bad experience with allied, work directly with the dept of ed and DO NOT give them any personal information that is ALLIED.

Recently I was contact by allied interstate for a balance owed on a car that my ex husband had repoed. My name was on the loan so therefore I was liable too. Allied called my work number and I asked that they not call me at work as I am not allowed to receive personal calls at work. A woman screamed so loud at me that she was incoherent. I finally hung up on her. She called over and over again and each time I told her the same thing. I offered to call her on my lunch break at noon and at 11:45 she called to "remind" me to call. I told her that I still had 15 minutes and hung up on her. At noon I called and she said she wanted $2,000 or she was going to call my human resource dept. to have my wages attached.

I told her that was against Pennsylvania credit laws and once again she screamed at me. Finally a Bruce Silverman took the phone from her and he calmly talked to me. I offered to make two $250 payments, one at the end of May and one at the end of June. He agreed and said we could talk about the balance after that. I stupidly gave him my bank info and ended the call. Guess what happened next....they withdrew the $250 at the end of April. I called Mr. Silverman and he apologized over and over again. He said they would send me a check for $250 and said he knew this was an inconvenience. He even offered to overnight it. Guess what....it still hasn't arrived and it has messed up my bank account so badly that I don't know what to do. I called Mr. Silveman to tell him I never received the check and he said "well it was sent". Now he doesn't answer HIS phone. I think he has caller ID too. What can I do. They now have my bank account info and I am afraid that they are going to start making deductions! HELP!!!

Cheryl


lrhall41

Submitted by PDLFREE on Sun, 10/22/2006 - 12:38

( Posts: 1245 | Credits: )


Your taxoff set notice does not include mandatory collection fees which the guarantor applies to your account 60 days post default. That will account for the difference in the balance amounts. These notices are sent out year as a courtesy and never include the name of the CA collecting on the account. Despite having paid the amount listed on the listed on the tax offset slip, your account is more than likely paid in full. Interest accruals from the date of the letter and collection fees would still apply.


lrhall41

Submitted by SOAPLADY on Fri, 02/09/2007 - 21:50

( Posts: 17315 | Credits: )


Quote:

work directly with the dept of ed and DO NOT give them any personal information that is ALLIED.


uh...

Quote:
Unfortunately, the truth is that once a student loan is defaulted and sent to a collection agency, contacting the DOE is not an option.


and

Quote:
Interest accruals from the date of the letter and collection fees would still apply.


I think it is worth noting that once a government debt is placed with a CA, the collection agency will get their fee, regardless of who the payment is made to. These debts are not purchased, they are collected under a contract.


lrhall41

Submitted by Morningstar on Sat, 02/10/2007 - 01:17

( Posts: 1633 | Credits: )


i started attending a school in a foreign country that i took out a 2500$ student loan (20 years ago). the loan was not taken care of and forgotten until a few years ago we started applying for the child tax credit and received a refund on our taxes which was then confiscated by the collection agency (allied international)by this time the loan with interest was up to almost 7000$, but with the taking of our returns(3,443$)should have been cut in half.we didnt file for the past 2 years and when i called to find out what was going on with my debt i was informed it had been turned over to another agency (west assett management)who informed me my present debt is 4400$. they told me if i pay it off in one shot it could be reduced to 3100$. as for credit ratings, i do not own any credit cards and am still living in debt, still outside of the u.s..also the refund we received is from my wifes salary (she has been kind enough so far not to file an injured spouse claim and allowed the money to be used towards my debt). my question: how much bargaining power do i have and how much can i realistically expect them to pay off, after all, the original debt has been paid off to the first collection agency with interest.


lrhall41

Submitted by anonymous on Sat, 05/26/2007 - 15:00

( Posts: 202330 | Credits: )


Quote:

the original debt has been paid off to the first collection agency with interest.


If this were a consumer debt, you'd be mostly correct. However, this is a student loan...you owe the money to the feds, so this debt will not go away until paid in full. The CA's are only collecting on behalf of the government (as opposed to collecting a debt they've purchased). They may have added their own fees for collections, which they are permitted to do (I believe it can be as much as 25%), these may be negotiable.

Quote:
and received a refund on our taxes which was then confiscated by the collection agency (allied international)


The feds handle that, not AI.

Quote:
how much bargaining power do i have and how much can i realistically expect them to pay off,


The offer of $3100 seems pretty decent, if you can come up with it. Go through the student loans sticky. There are useful links that might help you work out a better monthly payment amount if you can't afford the settlement offer.


lrhall41

Submitted by Morningstar on Sat, 05/26/2007 - 15:36

( Posts: 1633 | Credits: )