I am currently dealing with NCO Finanacial Systems in regards to my defaulted student loans. I am trying to work out reasonable payments that I can afford to make without getting myself into deeper trouble with their rehab program but everytime I speak with someone the amount they want keep changing and now I am being told that I have to make an initial payment (which I can't afford) by the end of this month or my wages will be garnished and that they don't have to let me know when this is going to take place. Any advise?

Are they asking for a down payment?? If so, this is not required to qualify for the rehab program. Under the HEA, (Higher Education Act) you are entitled to reasonable and affordable payments...however the CA must agree to the payment. Have you given them a financial statement, showing what you can afford?? They cannot demand money that you do not have.

On the garnishment side....they DO have to let you know when it is going to take place. Under the AWG program (Administrative Wage Garnshment) they have to send you a 30 day notice which you have the right to appeal.Make one more attempt...go thru the main switchboard. Ask the operator for her name...make a point of that. Then ask for a qualified manager...not a collection supervisor or lead. Calmly explain what is happening. Hopefully they will work with you. If they dont, just let them know that you will be filing a written complaint with the guarantor or DOE and you will be contacting the student loan ombudsman.

Good luck!!!

Yes they want a down payment of $500 to begin the rehab. I have given them a financial statement but the payments were still too much for me to afford and they won't even try to compromise with me to lower it a bit. But I will take your advise and see what happens. Also do I have to give them my checking account info or that of a relatives in order for them to get the payments? I really don't want to do this for fear of any unauthorized payments. Thanks

Contact the ombudsman if they're being buttheads. NCO has a rep for this, and many members have had better luck going through the ombudsman once they get to this point.

They can ask for financial information. It will let them look at your financial situation and (hopefully!) agree on a lower payment. Maybe getting that together now and have it ready might help. Granted, I'm pretty anal (although not anal enough to have stayed on top of my SLs!!!), I put together a spreadsheet with my monthly income, then showed EVERYTHING that was taken out or bills that I had, line by line -- taxes, FICA, rent, utilities, etc., including personal items and such (no, I didn't list those out!). I didn't make up the numbers, but, when in doubt, I didn't scrimp, either. I also had to send them 2 recent paystubs.

I wouldn't worry too much about unauthorized payments. These CAs are very highly regulated and lots of us here have done auto debit for rehabs through them with no problems. Not to say that problems don't exist, but it's MUCH less likely with these than with regular debts. If you're still concerned, you can set up a separate checking account and just transfer in the monthly payment each month so that there's nothing extra to take (just make sure you do it in plenty of time that it's there when they go to take it, obviously!).

Hope this helps!! Good luck!!

ETA: Note that I was NOT dealing with NCO (my CA was Pioneer).