Being Sued for defaulted Perkins Loan ...HELP!

[Rick1971]

I have a Perkins Loan that went into default status on 9/30/2011.

 

The original amount was $3000; which was taken out to cover the costs for attending an on-line Masters Program for Union Institute and University. I did some research and checked the DOE website and sure enough it's there. The University still owns the loan and the DOE has not subrogated (taken over) it yet. <BR style="mso-special-character: line-break"><BR style="mso-special-character: line-break">

 

I recently contacted the financial aid department to discuss the possibility of Rehabilitation of the loan….I was directed to contact a collections company Regional Adjustment Bureau to discuss rehabilitation. He told me that I would hear from them [otherwise I should call them].

 

The next morning I was served court paper by the county Marshal. I am being sued for the loan/plus court costs. Hmmmm…. they ARE quick aren't they??

 

 

My question is what should my next steps be and how should I approach things-

 

I think that Rehab is my only option? My research suggests that this IS a viable option ….

 

Is this true and if it is, how do I go about effectively negotiating reasonable payments?? Do I negotiate with the CA? The school?

 

From what I have been able to find RAB is a 'typical' CA and they can be a bit 'slimy' so what are the 'rules of engagement'?

 

Can I consolidate? What will happen if I do this and how do I begin that process?

 

 

I am waiting to hear any responses before I proceed.

 

Thank you for any assistance that you can provide.

[snowpuppy]

Read my response to HippieAtHeart.

 

Rinse and repeat.

[Rick1971]

Thanks Snowpuppy!

 

I got a call from the attorney’s office at my job a few minutes ago. She said that her client wanted her to call me.

 

I told her that I wanted to rehab the loan.

 

She stammered and said that she didn’t think that was an option since the loan is now in litigation. I said that my understanding is different and that is the route that I intend to pursue I then asked who her clients are [RAB the collections agency or the University]. She said both and asked me NOT to contact them directly.

 

Any thoughts as to what step to take now?

 

Sorry, I’m kinda new at this.

 

 

 

Thanks so much in advance!

 

 

[Rick1971]

Thanks Snowpuppy!

 

I got a call from the attorney’s office at my job a few minutes ago. She said that her client wanted her to call me.

 

I told her that I wanted to rehab the loan.

 

She stammered and said that she didn’t think that was an option since the loan is now in litigation. I said that my understanding is different and that is the route that I intend to pursue I then asked who her clients are [RAB the collections agency or the University]. She said both and asked me NOT to contact them directly.

 

Any thoughts as to what step to take now?

 

Sorry, I’m kinda new at this.

 

 

 

Thanks so much in advance!

 

 

[snowpuppy]

If you have the name & address of the attorney, send them a letter CMRR and tell them you are asking for a response in writing why they believe you are ineligible for Rehab on your Perkins. Ask also for a 'limited cease and desist' and ask that you are working to resolve your Perkins issues but ask that all correspondence be in writing to avoid any potential misunderstandings.

 

Then do the same with the collection agency. Ask them why you are not eligible to Rehab. Perkins offers a one time shot at Rehab, if you screw it up, you are no longer eligible to Rehab. Perkins has different rules than Stafford or Direct Loans.

 

In the meantime, this is the Ombudsman's Office at the US Dept of Education. If you're threatened with a lawsuit, I would write CMRR and skip the online or telephone process. These CA's are contractors approved by the Dept and they NEVER want to hear from the Ombudsman. Ever. Repeat, Ever. It will endanger their status as an approved SL collection agency.

 

Then tell the CA, the school and the attorney you will send a letter to your Congressman explaining your good faith efforts. It's an election year. With 1 Trillion in SL debt, they'll listen.

 

 

Ombudsman

Edited April 25, 2012 by snowpuppy