US Dept of Education can't consolidate?!

[DebeeG]

I called US Dep't of Ed with attempts to consolidate defaulted student loans. I was told that the judgment was so old that they're writing to Albany to attempt to get the index # of the judgment. If the index# cannot be found then they won't be able to consolidate....

 

Can this be true? They're currently garnishing my wages and offsetting my income taxes. Am I a prisoner of this until it's paid off?!

[DebeeG]

bump

[Cheech]

DeBee do you know how old the judgement is? When did the loans go into default? Have you tried looking them up in the NSLDS database? Why do you want to consolidate them? How long have they been garnishing your wages? Did they send you info when they began the garnishment about how much you owed in total or any other info about the loans?

 

Sorry to ask so many questions, but there isn't much to go on here so I'd just be guessing. Once you find the info on the loans, you may want to read here about possibly appealing the garnishment. You could also rehab the loan instead of consolidating, which would help your credit reports a lot more. Even if you can't get the garnishment repealed, you could still enter rehab and make the rehab pmt in addition to the garnishment. Just some things to think about.

[DebeeG]

The judgment is so old I'm ashamed to say. I'd be guessing it's from 1998 (although I don't see any of them on my credit reports -- curious, hmmm). At any rate they ARE defaulted. I had been feeling so resigned to the litany of actions that they've taken against me that I simply stood by and watched them sieze my tax returns and garnish my wages.

 

I'm at the point of resolve that I want to get on the right track once and for all. I hope it's not too late. I just can't understand how the rep can say that the index is so old that they may not be able to find it. Do they, at some point, cease to cooperate if the debt is really old (I graduated from college in '90)?

 

 

Another question I have is: do all of the penalties go away if I'm successful in getting the rehab?

[ziggypop]

The judgment is so old I'm ashamed to say.  I'd be guessing it's from 1998 (although I don't see any of them on my credit reports -- curious, hmmm).  At any rate they ARE defaulted.  I had been feeling so resigned to the litany of actions that they've taken against me that I simply stood by and watched them sieze my tax returns and garnish my wages.  Most of us have been there with the standing back and just watching -- I definitely know that feeling!!  Believe me, you aren't alone in that at all.

 

I'm at the point of resolve that I want to get on the right track once and for all.  I hope it's not too late.  I just can't understand how the rep can say that the index is so old that they may not be able to find it.  Do they, at some point, cease to cooperate if the debt is really old (I graduated from college in '90)?  You'll really be fine.  I know this is a really hard point when you're trying to do the right thing after a long time and it feels like it's not helping, but it really will turn out okay in the end.  I don't think you've reached a "point of no return" on them cooperating.  As Cheech said, people here have had some REALLY old loans that suddenly show up again, so it's not like it's unheard of. 

 

 

Another question I have is: do all of the penalties go away if I'm successful in getting the rehab?  I'm not sure if ALL of them are removed (I really have no idea - it might be all of them), but if it's not all of them, it's the vast majority of them.  They aren't removed until after you've made the 12/13 payments and it's been resold, though.  Do you know what the total is on your loan and how long you'll be having your wages garnished?  Remember that for rehab, you will need to make payments above and beyond the garnishment amount.

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Have you heard back from the office yet? Are you still having your wages garnished? If they have enough information to do that, then I'm thinking they would have enough information to figure out where it's at. If you don't get a satisfactory answer from whoever is supposed to be calling you back, you should probably think about contacting the ombudsman's office. They should be able to help. Also, did you try looking up your loans in the NSLDS database?

 

Totally random thoughts here, but are you sure there was a judgment? They don't need one to garnish your wages. Were you ever contacted about being sued or anything to that effect (and don't feel bad if you think you might have been and just ignored the summons -- that's not unheard of around here either!)? If they sued you for the total, you would have had to be summoned. If you didn't show up, they would have entered a default judgment against you, but it just seems strange that there would have been a judgment that they don't need in order to garnish or take your tax returns and then you hadn't heard about it since either.

 

I hope this helps!! Good luck!!

[citygirl8]

You can't consolidate defaulted loans. You have to wait until you're out of default to do that.

 

I was told that if I went into garnishment that it was "forever" with no chance of rehab, but it was the guy from the collection agency who told me that, so it could be wrong.

 

I think you've done the right thing by contacting the Dept of Ed. I've heard that when people are trying to work things out that they can be pretty helpful.

 

Have you written to the collection agency for validation? If they can't come up with the records then they can't prove what you may or may not owe them, and that settles that. If they can come up with the records, then you can provide the bright lights at the Dept. of Ed the paperwork they need to rehab your loan.

[Cheech]

You can't consolidate defaulted loans.  You have to wait until you're out of default to do that. 

 

Actually that's not true. You can consolidate while you are in default. It doesn't remove the default notation from your credit report like rehab does, but it is allowed.

 

I was told that if I went into garnishment that it was "forever" with no chance of rehab, but it was the guy from the collection agency who told me that, so it could be wrong.

 

Yes, it's wrong. Garnishment isn't forever - at some point you pay off the loan and it stops. You can also be in rehab while simultaneously in garnishment - you'd just have to pay the rehab pmt on top of the garnishment. There's also the option of a garnishment appeal.

 

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[ravrbt]

actually guys you are all kind of right and kind of wrong....

 

I am in the process of fixing 2 defaulted stafford loans from 1994-95, They defaulted in 2000 and although they have been sold a few times, Orig borrow about $4500 now owe $25k

 

they are in a State Guarantee Agency and I have not been sued yet over it..... They have tried garnishment but there are no judgements

 

anyways I found a site and I hate to post it on here because im definately not promoting them.... however if you email me I will give you the info....there are several federal programs that allow ANYone who defaulted to fix it- they dont even run your credit.

 

It is definately possible to consolidate if you are in default. As long as you have not reconsolidated already or and as long as no judgements against you- you can do it

 

when you do it- you loan status is paid off and you are out of default right away and yes you get a jump immediately in your score...anyways the big benefit is they can go 10-20 yr terms so you can have a payment of like $120 a mo @ 3-4 % and no sting if you pay early....it gives you an open active tradeline with a bank and if you pay on time student loan trouble can go away fast- the marks stayfor a while but you can always try some letters to bump it off faster..

 

does anyone else have experience with this? i was in default 5 yrs ignoring it, now that ive fixed it im trying to clean up like 10 small $100 things so im 100% clean

 

this board is great

 

also for defaulte student loans rehab is available even if you try and screw up in past with it.... but you must pay 12 months before you are out of default and they keep messing with you all the way thru calling you work looking at your tax returns- even if youre paying- so consolidation ends it all pays em off and gives you a fresh start...

[LynnInMN]

Ok, I will comment on this one.

 

If this is a judgement account like the original poster states, this means she has been sued. A judgement account cannot consolidate or rehab without the judgement being released thru the court after the obtaining permission from the original loan holder. It was explained to us by the law office that serviced our agency that a judgement technically changes it from a student loan to a judgement account. An agreement has to be made to set the order aside. Another thing is that if you are successful in getting a release, you must agree to pay the court and legal costs added to the loan, usually immediately. They cannot be added to a consolidation. I did see a few judgement releases for consolidation but not for rehabs.

[citygirl8]

You can't consolidate defaulted loans.  You have to wait until you're out of default to do that. 

 

Actually that's not true. You can consolidate while you are in default. It doesn't remove the default notation from your credit report like rehab does, but it is allowed.

 

Sorry, maybe I jumped the gun.  I know this applies to me, but I have these uncommon Direct loans from the Dept. of Ed. and the rules differ sometimes.

 

I was told that if I went into garnishment that it was "forever" with no chance of rehab, but it was the guy from the collection agency who told me that, so it could be wrong.

 

Yes, it's wrong. Garnishment isn't forever - at some point you pay off the loan and it stops.

 

I'm shocked that that man from the CA lied to me.  Ha.  Though, I did mean forever in terms of the loans, not one's individual lifespan.  Unfortunately, in my case they're one and the same.

 

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[DebeeG]

actually guys you are all kind of right and kind of wrong....

 

  I am in the process of fixing 2 defaulted stafford loans from 1994-95, They defaulted in 2000 and although they have been sold a few times, Orig borrow about $4500 now owe $25k

 

they are in a State Guarantee Agency and I have not been sued yet over it..... They have tried garnishment but there are no judgements

 

anyways I found a site and I hate to post it on here because im definately not promoting them.... however if you email me I will give you the info....there are several federal programs that allow ANYone who defaulted to fix it- they dont even run your credit. 

I'd love to get the name of the site. 

 

It is definately possible to consolidate if you are in default.  As long as you have not reconsolidated already or and as long as no judgements against you- you can do it

It appears that there are no judgments.  Nothing's showing on my credit report as a judgment, only as placed with a collection agency. 

 

when you do it- you loan status is paid off and you are out of default right away and yes you get a jump immediately in your score...anyways the big benefit is they can go 10-20 yr terms so you can have a payment of like $120 a mo @ 3-4 % and no sting if you pay early....it gives you an open active tradeline with a bank and if you pay on time student loan trouble can go away fast- the marks stayfor a while but you can always try some letters to bump it off faster..

 

does anyone else have experience with this?  i was in default 5 yrs ignoring it, now that ive fixed it im trying to clean up like 10 small $100 things so im 100% clean

 

this board is great

 

also for defaulte student loans rehab is available even if you try and screw up in past with it.... but you must pay 12 months before you are out of default and they keep messing with you all the way thru calling you work looking at your tax returns- even if youre paying- so consolidation ends it all pays em off and gives you a fresh start...

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I'm sorry it took so long to reply to the posts. Thanks for all the advice! Since the student loans only appear on my CR as collection there may be some hope. I still haven't heard back from Us Dept of Ed regarding that index#. Should I keep calling and harrassing or resort to strongly worded letters? Do I have a RIGHT to rehab?

 

I'm also VERY interested in how to get the garnishment overturned. They're already taking out $500/month in garnishment and having to pay above and beyond that will kill my budget.

[zyber4]

Hi ravrbt,

 

You wrote:

I found a site and I hate to post it on here because im definately not promoting them.... however if you email me I will give you the info....there are several federal programs that allow ANYone who defaulted to fix it- they dont even run your credit.

 

 

can you send me an email with the site information, I want to fix my loan situation as well. Thanks.

 

nodebtnow@hotmail.com

[LynnInMN]

anyways I found a site and I hate to post it on here because im definately not promoting them.... however if you email me I will give you the info....there are several federal programs that allow ANYone who defaulted to fix it- they dont even run your credit. 

 

 

<{POST_SNAPBACK}>

 

This very site tells you about all the programs available for consolidation or rehab....these are federal programs!! All consolidation loans are based on Federal guidelines!

 

And again, if this is truly a judgement account, they cannot rehab or consolidate without getting a judgement release.

[shaz]

"I am in the process of fixing 2 defaulted stafford loans from 1994-95, They defaulted in 2000 and although they have been sold a few times, Orig borrow about $4500 now owe $25k"

 

How is this possible? I borrowed about 7000.00 total back in the early 90's and let these SLs go into default. I had both stafford and plus loans. I even owed the school about 7000.00.

 

I was forced to pay the school the 7 grand to get my transcript so I could transfer. I payed the school off (This took a couple of years!).

 

I just rehabbed my loans in the last couple of months. I had nowhere close to your 25k. i owed about 15k total! How did your debt ever get that high? I am only asking because it makes me feel really lucky I took care of this when I did.

 

Keep a positive outlook though. I just checked my scores and reports and WOW!

 

TU 709

equifax 734

experian 696

 

Once you do take care of it, you will be well on your way!

 

Hey atleast you have a degree. I am just now finishing up my UG degree!

 

Your story sounds so much like mine from 2 years ago. It can be done.