Rehab agreement prior to rehab payments?

[Jump_youll_Fly]

Thank you all, expecially Lynne for extensive and knowledgeable posts. I found CB last April and #1 on my credit repair list was get out of default with my student loan. I have one specific question in the last paragraph below, and Lynne posted recently that guarantors will soon be submitting their offset lists, so I want to clarify...

 

Much is posted about "minimum" payments, "good faith deposits" etc. for rehab payments. I'm sure there's some YMMV depending on the CA, but I just want to say that I did my budget up very carefully before I contacted the CA (Diversified Collection Services aka DCS) and I KNEW exactly what I could afford to pay and I refused to budge. They pulled a hard, then agreed to my amount, telling me that I was eligible for loan rehabilitation and that after 9 payments I would be able to get out of default, etc. BTW, my payments are appx. .0012% of my outstanding balance. Also, I found the person I spoke to be very professional and she seemed to stop any pressuring for larger payments when I firmly said "I've done my budget is this is the maximum payment that is reasonable and affordable for me". I honestly think that had it not been for this forum, I would have never know to use those words and mostly likely would have been scared back into my shameful black-hole default universe.

 

I authorized auto debit from my checking, and shortly after that I received from them 2 notices:

 

1. A schedule showing the next appx. 18 months or so, with 18 "X" (X = my payment amount) payments to be debited on "X" day each month. No mention of rehab in the letter. Should I be concerned? Why, if they told me that I would be making 9 payments, would they send me a schedule showing way more payments than that?

 

2. A financial form to fill out (expenses, income,etc.) which I filled out an promptly returned.

 

Since then nothing from them other than the monthly notices of reminder that they will be debiting my payment on "x" date. I've made 3 payments so far.

 

My question: Is there some sort of an agreement that I should have from them saying that I am in rehabilitation by making these payments, or is is customary that that just happens once the rehab payments have been made? I just want to make super sure my ducks are in a row here, as I would very much like to NOT be on the tax offset list this fall and it is my understanding from reading this forum that I won't be since I am making payments, right?

 

Thanks in advance for clarifying.

[LynnInMN]

My question: Is there some sort of an agreement that I should have from them saying that I am in rehabilitation by making these payments, or is is customary that that just happens once the rehab payments have been made? I just want to make super sure my ducks are in a row here, as I would very much like to NOT be on the tax offset list this fall and it is my understanding from reading this forum that I won't be since I am making payments, right?

 

Thanks in advance for clarifying.

 

Some agencys do, some don't. The agency I worked for did not do agreements for any of our student loan clients. In a nutshell, signing a rehab agreement prior to making the required 9 payments mean nothing. Our agreements were generally sent out within 7 days of the 9th payment being posted.

 

Why no agreement?? When I was collecting, over 60% of all rehabs failed. We would send out notices informing borrowers of their right to rehab with all the applicable information.

 

Tax offsets. Check with the CA in the beginning of October. Each student loan client sets requirements for having student loans returned and those requirements change yearly. Some will remove your name by just entering into repayment. Some require % of loan being paid over the previous 12 months. Nothing is set in stone. Offset lists are usually sent to the agencies at the end of August/early September.

[Jump_youll_Fly]

Thanks for your response, Lynne. One more question: Can the CA send an update to the tax offset list after the annual list that goes out in Aug / Sept? For example, if the CA puts me on the list that goes out in the fall, but my default status is removed in Jan or Feb, will they instruct the tax offset to be removed at that time, or not until the following year's list?

[ziggypop]

Thanks for your response, Lynne. One more question: Can the CA send an update to the tax offset list after the annual list that goes out in Aug / Sept? For example, if the CA puts me on the list that goes out in the fall, but my default status is removed in Jan or Feb, will they instruct the tax offset to be removed at that time, or not until the following year's list?

 

I have NO IDEA if I was a fluke and I can only speak for my situation, but it worked that way for me. I got the tax notice in Aug/Sept., worked out payment arrangements with the CA at the same time and did not ultimately have my refund yanked, and I was still paying them when I filed my taxes (I'd been paying for 9 months). So, it's definitely possible.

 

Good luck!!!

[Jump_youll_Fly]

ziggy, who was the CA for handling your account?

[myangel4everjoe]

If you are in a Rehab the rule currently for being removed from the tax offset program is that you must have a least 4 qualifying payments made before the off set deadline which is October. It does not matter what gurantor agency owns your loan the Rehab program is a program that was set up by the Federal Government and the Dept of Ed. However collection agencies have no control over whether or not you will be on the offset list it is done by the Gurantor agency and collectors should not be telling you that you will be off the list for sure. As long as you are in default still there is no gurantee.

[LynnInMN]

If you are in a Rehab the rule currently for being removed from the tax offset program is that you must have a least 4 qualifying payments made before the off set deadline which is October. It does not matter what gurantor agency owns your loan the Rehab program is a program that was set up by the Federal Government and the Dept of Ed. However collection agencies have no control over whether or not you will be on the offset list it is done by the Gurantor agency and collectors should not be telling you that you will be off the list for sure. As long as you are in default still there is no gurantee.

 

When was the policy changed?? Source? It has always been up to the each individual guarantor to decide what the requirements were to be removed from tax offset.

[QueenLeen]

thanks Lynn, i was worried about that October deadline being that it is now Sept and I'm just now starting to thinking about rehab.