Allied Interstate called regarding my student loans

Tired,

I think you should negotiate with the collection agency and ask them after how many successive timely payments, they will report it as rehabilitation. Once a default student loan is rehabilitated, it regains its current status and the borrower becomes eligible for further federal grants.

After rehabilitation, try to consolidate the loan with lower rates of interest and easy monthly installments.

If your financial status does not permit you at all to repay the loan, you can apply for a cancellation or loan discharge. Under certain circumstances, federal student loans are cancelled and the borrower is exempted from the obligation of repaying the loan.

See the following forum topics to get some more knowledge ???
http://forums.debtcc.com/forums/loan-discharge.html

I've applied for rehabilitation. Thanks for your help...I'm again sleeping well.

If somehow I can manage a large amount and pay two or three installments together, will it enhance the process of rehabilitation?

On the contrary it will delay or throw you away from the process. The process of rehabilitation checks your punctuality hence helps you to improve your credit history after a series of timely payments.

If you pay one lump sum amount at a time, it will not serve the purpose at all.

Please go through the links mentioned in my earlier post. It will help you to clear the idea. You can also contact your loan holder to know your options in details.

Bryan

P.S. I'm so glad to know that your life is again on the right track. Best of luck.

Thanks alot for your cooperation. Somehow I've mistaken with this fact, read your post and it's pretty clear now.

:cry: I'm in the same situation, my wages are currently being garnished by allied interstate. I just don't know what to do. They never contacted me on this matter just started garnishing my wages. Please give me some information to reverse this action. My email address is email address removed as per forum rules - Mike
Thank,
Latoyia

So frustrated....

allied interstate would have sent a 30 day intent to garnish letter to the address they have on file. You can appeal but it probably take some time but not receiving notification or moving is not grounds for stopping the action. To get it stopped, you will have to prove financial hardship with full documentation. Federal loans must be paid back and they will work with you but since you are already in the garnishment loop, it will be a little bit more difficult.

I am in default with my loans and am being called by allied interstate telling to do an automated payment now over the phone or my wages are going to be garnished in two weeks. I feel skeptical to give my info over the phone. I am a single mom who has fallen through very hard times, please help, I don't want them to garnish my wages but I also don't want this to be a scam

No, it is not a scam....allied is a vendor for the US Department of Education plus serveral state guarantee agencies. Did you ever think of calling your guarantor to verify?

Hopefully you got and returned the 30 day appeal notice for garnishment and your payment is your agreement to avoid garnishment. Remember that if you miss a payment, they will immediately state the garnishment so if you have made a payment agreement, follow thru with it.

Does a debtor in default on student loans have to pay the "demanded down payment"? If I send Allied a payment that is reasonable for me and a promissory note for a determined monthly payment, again what I can afford, will that satisfy the definition of a payment arrangement? I am the sole provider (<$25K/yr) of a five member household.

you cannot change the terms of the original promissory note so anything you put in writing is worthless. Any payment arrangement must be negotiated with the CA.

The term "reasonable and affordable" only applies to payment arrangements leading to rehabilitation. the payment must be affordable to you but the reasonable to the CA based on your balance. Example....a payment of $50 per month would be considered reasaonable on a $7500 loan but not on a $20,000 loan.

No down payment is required by the Higher Education Act for rehab. They can ask for it but they cannot make it a condition of the rehab.

Thank you for your quick response. A little more advice please.

If I call the debt collector, Allied, tell them I want to rehab and accept their monthly payment requirement (just to clarify) they cannot demand a down payment? I am required then to send the monthly payment only? Do they have a right to demand payment today via telephone, credit or debit, because I have neither.

How do you calculate reasonable monthly payments? Is it a percentage?

It is subjective....obviously a payment needs to be covering the interest if less than the standard 1% payment. If you cant pay more, they would be setting up a rehab that would immediately redefault.

they can ask for a down payment but they cannot make it contition of a rehab.'

I would advise you to get a checking account and get set up on auto debit. Miss a payment or have it get lost in the mail and they will immediately start up a garnishment. It would also make your account high maintainance and the collectors will review it more, which you dont want.

Sure they have a right to demand payment today....they have a right to demand payment in full today also....you agreed to those terms in the original prom note. However if you cant do it, you cant do it.

Rehab is definitely a better option to save my credit score, but consolidation would be an easier monthly payment and a better chance at successful repayment. If I apply for consolidation, will that stop the garnishment process currently being threatened?

They called two weeks ago and said "immediately following this call I am forced to initiate the garnishment process unless you make a payment over the phone today". I asked for two weeks and they refused "not an option" they said. If they started the garnishment process two weeks ago, how long do you think before it is in place with my employers payroll department, and why are they still calling me?

Have you received a 30 day garnishment notice? Do they have your correct mailing address?

I have not received a notice, and doubt they have the correct mailing address but I did call the Debt Resolution Group this morning and gave my new info to them.

I have not received a notice, but doubt they have up-to-date info. I did however, update my info with the Debt Resolution Group just this morning. I am afraid (sadly) to call Allied and feel pressured, bullied and end the call only to find no progress made and then they can say they spoke with me twice and I was unwilling both times to come to agreement.

You need to make sure Allied has the correct info asap...if they have sent a garnishment notice to the wrong address, you will not be aware of it and you will loose any rights to appeal. Sure you can appeal later but it could take several weeks and in the interim you would be stuck with the 15% garnishment.

does anyone have the contact info for Allied? I cant find it anywhere. I lost their contact info, i had to change my credit card that i was using for monthly payments, and i also changed my phone number and well they havent tried to mail me anything to my home address and I cant contact them to update my payment info. Please help.
When i look at past transactions that they took in my bank acct there is no number to call.

Is this for a student loan?

Depending on the state you live in No one can garnish your wages unless youhave been taken to court and the Judges rules for wage garnishment.

This is just like child support until the Judge states the amount that needs to be paid and has approved wage garnishmnet then no one is allowed to garnish your wages or atleast in the state of Texas you should look into your States law about wage garnishment.

Also if your wages are already being garnished there is only a certain limitation (I think 20%) by law that is allowed to be garnished.
:-P

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