please help re: Allied interstate and default student loan

if we attempt to send them money w/o an agreement as a show ofgood faith does that help us? what do you recomend? she is currently a full time student and we're not sure why this didn't get deferred.

No such thing as good faith when it comes to private loans.

Was she out of school for a period of time? Or continuous enrollment? If she left school or changed schools, she may not have been eligible for additional deferments. Or she didnt do the correct paperwork for deferment....these would be seperate from federals.

Soaplady,

I am dealing with Allied on a private student laon through Sallie Mae. Do I or do I not have to pay a downpayment prior to making monthly payments?

SInce this is a private loan, they can ask for anything they want. There are no governemnt regs surrounding this type of loan.

If I am able to make the monthly payments but not the down payment, what are they likely to do? They are saying that they will garnish wages. Also, are they allowed to pull up my credit report without my permission? And if not, how should that be addressed? Is it worth mentioning in the long run or should I just let it go?

Yes they can pull your credit report...it is totally legal since you owe a debt...it is permissible purpose .

With private loans, even if you are making payments, they are still likely to sue. If you dont agree to their terms, they are likely to sue quicker and initiate garnishment proceedings. This is world of private student loans.

I hate to sound so dumb, but I want to make sure I am understanding what you're telling me. Although I can make the monthly payments I cannot come up with the $1500 down payment. Are you saying that they will very likely sue for that amount and then garnish wages?

Can individuals fight wage garnishment? I was told that there is a form that can be obtained through legal aid called "stop garnishment" (not sure if that is the correct wording).

What happens if they do decide to sue? Will I have to go to court?

Thank you for your help!

Private loans sue as a matter of business practices on almost all defaults even if the borrower is in repayment. You agreed to balance in full on demand if you defaulted on the loan and they are within their legal right to set the terms. Private loans do not have the same protections as federal student loans.

To garnish you, they would have to sue you first. You will receive a summons which you would have to answer and then yes, you would have to go to court. That would be the time to tell the court that you have tried to pay or are paying. They will still get their judgment but your best bet is to ask for a contingency judgment, one that allows you to pay an amount and as long as you pay, further legal action will not happen. However if you miss a payment, garnishment will kick in pretty quick.

I do not believe there is form that will stop a garnishment. You would have to appeal thru the courts to have it reduced or stopped.

Dear Soap Lady,

I am an AmeriCorps volunteer and am paid a living stipend. One student loan is in deferrement through AmeriCorps, but the other loan didn't get deferred because it had gone into default two months before being accepted into their program.

I got a letter from Allied Interstate and the very day I received the letter I called to find out what was happening (I didn't realize my loan had defaulted). The gentleman with whom I spoke told me I needed to speak to the Dept of Education. I gave the information to the AmeriCorps liason in charge of deferring the loans, and now she has given it back to me.

It has only been a couple weeks and I have begun getting phone calls at work from Allied Interstate. They have not left any messages on my voice mail, but the secretary said the man calling is very rude to her and keeps demanding that she give me the message to call. I have missed calls from an 866 prefix on my cell phone, and because I don't know the number I don't answer, and the caller never leaves a message. When she gave me the message with the phone number I now know that this is the same person.

I googled the company and have read several pages of this forum. I would like to call and have a little information under my belt before I call (and I would also like to first speak with the Dept of Ed).

Do you know if a living stipend can be affected? If my loan went into default in May while I was still unemployed, can I retroactively go back into deferrment and have my loan leave Allied? I was laid off from my job July 2009 and my degree conferred October 2009.

I would just like to feel a little better armoured before I start making all these calls. This isn't my strong suit. Thank you for any advice you can give.

The Department of Ed wont talk to you....your loan has been in default for too long.

You stipend would be subject to garnishment like any other federal payment.

Hi SOAPLADY.

I am speaking with Allied Interstate in regards to my defaulted federal student loan. I am willing to do the 9 month program which you say results in monthly payments of around 1% of the loan balance. For this loan would they require a larger than 1% downpayment? Or would I be able to agree to the monthly payments?

Thank you!

They can ask for a downpayment, but they cannot make it a condition of a rehab. There is nothing in the Higher Education Act that requires it.

although going through a rehab will get your loan out of default, it would be cheaper and quicker to consolidate if u r eligible.. the CA wont tell u that, cuz they lose money when you do that... u can get a consolidation company to help u out with that, as it can be a lot of work to handle that situation... i hired one myself, and got it handled in about two months...

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wrong thing again... CA agents make commissions based on how much they collect through garnishments and rehabs, which is why they ask for the most they can, and even sometimes ask for more, hoping people dont know any better... some agents have made over 400k off of collections... its a shame soaplady doesnt know this, probably because it never leaves the house...

also, consolidation of federal loans dont change terms, obviously, because it is a federal loan issued by the treasury, you would hire a company to do all the work for you, in case you dont want to do it yourself... its not as easy as soaplady makes it seem, although it thinks that its easy and will be quick to judge and demean people if they cant do it... tsk tsk, shame on you soaplady...

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Oh soaplady, you finally did some homework! but not enough unfortunately... they do make commission on garnishments... otherwise, why would they move a loan into garnishment and not just try to collect still through rehab? wouldn't it make more sense for the individual agents to do that? think for once soaplady... i know how hard that may be...

Collectors do NOT make commissions on a garnished account...once an account has been identified as a AWG candidate, it is move to out of the collectors portfolio and into to the AWG unit. AWG collectors do not get paid on involuntary payments. They are coded similiar to tax offsets.

If I can clarify any other questions about student loans moneybutt, let me know. Every time you post, you just sink your credibility even further.

Maybe the DOE garnishment people don't, but the DOE doesn't handle all collections. There are numerous agencies out there, I can list a few if you like... DCS, Texas Guaranteed, NY State Higher Ed, ECMC, ECMC-CA, Great Lakes, etc... I'm sure you didn't know about some of those, since your knowledge is fairly limited...

Once again, doesn't make much sense for a collection agency agent to give up on a file and start a garnishment if they don't collect a commission... it's like if a car dealer salesman not being able to sell a car, and then giving it to someone from another dealer because they couldn't sell it... not much sense in that, but you wouldn't be able to recognize common sense, obviously...

my credibility obviously isn't necessary here, as I don't get anything from posting here... just giving people the facts, since you want to withhold information from them, and alter some of the information they get... Pride is such a killer these days, and most people don't even know it...

The simple fact is that average collector can have up to 4000 accounts in their portfolio. I averaged 5000 accounts in my unit of which 3000 where monthly payers or pending rehab or consolidation. If an account is not paying, ditch it and move onto another one that is or will. Student loan collectors have have to maintain federal due diligence on all the accounts in their unit and non paying or non responsive accounts are a waste of time and are a source of potential violations. We would send the 30 day AWG notice and if they failed to respond, they were gone. If they did respond by phone, we would set them up on rehab payments. If they responded in writing, the AWG manager or DOE would hold the hearing.

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Ah, yes, there it is again. From your experience, at your agency... kind of a narrow view, considering how many agencies are out there... I wonder, have you ever spoke to any other CA? Have you ever researched any of them? Have you any idea there way of handling things, paying their agents, etc? probably not... So, we're back to what we started with... you don't really know that much... so when some of these agencies deny appeals for garnishments due to reasons that they can back, and a client has to wait 6 months before they can file the next appeal, and lose all that money through garnishment, they'll have you to thank... bravo soaplady, bravo.... oh wait, is this another post that you'll delete?

I'll just copy it, just in case... ;-)

Sorry...SOP was and is still set by the guarantors and Direct Loans. Every ageny bids on the contracts yearly and must follow the individual guarantors protocol. DOE manuals stacked one of top of each other were 4 foot tall. All collection agencies under contract had to follow them and were graded on them. Fail an audit on procedure and loose placement. I did not work for other agencies but many collegues did and still do. When my agency relocated, many went to work for Allied since it was in the same city. That is when I became a Financial Aid Officer, so I have worked both sides of the table.
Yeah, garnishment appeals take time and rightly so. Priority goes to those who are appealing in writing within the original 30 day window. Those appealing a current garnishment wait until those who are appealling on timely basis are complete.