Ok, I need some good advice. Here's my story... took GSL loans in '84, '85, and '86 whilst in school in MN. School screw-up (not that it matters who screwed up) put me in repayment status in '87 while still in school full-time, but ended up making payments from '87 through '89... at that time owed over $6K on $7.5K original... took a job in Europe and tried to pre-pay year's worth of payments with post-dated checks, all were cashed the same month and when I returned a year later I found I was in full default. Penatlies of 42.84% were added, and no one would listen to my story or consider lowering or removing the 'excessive' penalties, so in my young, aggressive, and naive manner I said that I would never pay the 42.84%. Over the next several years garnishment was instituted a couple times, but never effectuated, due to short tenures at the positions, but I dealt with tax refunds being held (to this day, and totalling over $8K already), and years of poor CR, and no car or home loans for 7 years...
Anyway, CR has been fine now 8 or 9 years, and I had not heard word one about my loans or default status for probably as long, and had mostly forgotten the issue. I have sometimes felt guilty about the fact that I owe $6K, but never bad about my unwillingness to pay the additional fees of half-again as much - totalling what is now over $18K, even with the past tax returns applied. Well, today I got the call from a CA saying that it is all going to start over again.
My loans don't appear on http://www.nslc.org/students/default.htm and aside from being GSL's I don't know anymore about what eventually happened to them. A company called Van Ru Credit is attemptng to collect today. I am afraid to enter into a repayment agreement for fear that I will still be held to the $18K they are talking about, and that my CR will include the bad info again if I do so. Also, waiting 12 months to be considered a re-hab is too long. I would consider taking a separate personal equity loan to completely eliminate the debt if it could be settled for the principal and reasonable interest, but need advice. Will/Can they negotiate the amount with me? Where has this issue been the past 8 or 9 years - why now? Will a new repayment agreement affect my CR? Will it affect my tax returns? Or shall I only take short-term jobs that can't be garnished or leave the country to avoid tax returns (he says MOSTLY facetiously)?
Full Version: old GSL default - basically forgotten
It is not uncommon for loans from your era not to be in NSLDS...these all had to be manually keyed in.
The 42.84% added interest tells me that you where subrogated by the DOE years ago, so you have nothing to fear about this resurfacing on your CR.
More than likely, due to the age of the loan, they will settle off on all the collection fees and probably some of the interest. And yes, Van Ru can do the negotiations for you. Word of note...always offer a settlement in the last half of month....you are more likely to get a yes response. Technically if you were to offer them $10k today thru direct debit that would probably take it ...today is the last day of the month and a short month at that...hell on collectors. When I was collecting, if a payment like that was offered on the last day of a month we would do whatever we had to do to get the $$ in the door that day. Faxing settlement offers, taking additinal $$ off for western union, autopayment.
The only concern you would have right now that might or could effect your credit is if they decided to take out a judgement on you. Particually if you own any property.
The 42.84% added interest tells me that you where subrogated by the DOE years ago, so you have nothing to fear about this resurfacing on your CR.
More than likely, due to the age of the loan, they will settle off on all the collection fees and probably some of the interest. And yes, Van Ru can do the negotiations for you. Word of note...always offer a settlement in the last half of month....you are more likely to get a yes response. Technically if you were to offer them $10k today thru direct debit that would probably take it ...today is the last day of the month and a short month at that...hell on collectors. When I was collecting, if a payment like that was offered on the last day of a month we would do whatever we had to do to get the $$ in the door that day. Faxing settlement offers, taking additinal $$ off for western union, autopayment.
The only concern you would have right now that might or could effect your credit is if they decided to take out a judgement on you. Particually if you own any property.
thanks for the suggestion... wasn't able to take care ofthings on my end yesterday, but certainly intend to in the next couple weeks... just don't want to agree to a settlement of nearly $10K and pay it by credit card and up with a whole new problem if I don't secure a separate loan to take care of it.
Is there anything I should be doing/saying in the next couple weeks to discourage their potential for seeking additinal judgements or re-instituting garnishment of wages, etc. before I actually reach a settlement with them?
Is there anything I should be doing/saying in the next couple weeks to discourage their potential for seeking additinal judgements or re-instituting garnishment of wages, etc. before I actually reach a settlement with them?
Neither a judgement or garnishment will happen over night. If you are hinting at a settlement with them, and that is a key word...hint, they will not forward your account for AWG. Once a collector forwards an account to the garnishment area, they loose any possible commision on that account.
Also note.....you will be 1099'ed on anything they settle off on. So if you settle for $10 you will be taxed on the written off $8k portion.
So TroubledinMN...where in MN are you??
Also note.....you will be 1099'ed on anything they settle off on. So if you settle for $10 you will be taxed on the written off $8k portion.
So TroubledinMN...where in MN are you??
Thanks for the help Lynn... haven't reached a settlement, but I am feeling much more confident in how I best proceed. I am actually renting a home and working in Denver for the past couple years and trying to rent (a whole other credit issue) out the home I still own on Mpls. Should have sold that when I first relocated to Denver, but have always appreciated the 'security blanket' of potentially returning to MN. Hopefully I can avoid any judgement against it!
Lynn-
Are there really rules governing the CA on settlements? You guessed they would settle for $10K, and we have not settled yet as they are saying they can only write off collection fees and a portion of the interest -which leaves a total of $12K as the settlement offer. I am not pleased, and while I understand that perhaps this is still perhaps a 'fair' number given that I obviously took the loans with an agreement to pay, I have suffered through lots of tax return garnishments and 7 years of bad credit. He even tells me that interest charges have not been added to the total in the past 4 years. He says that 'any' agreement to repay through a means 'other' than settlement will allow it back on my credit rating AND kick in the past 4 years of interest totals... what exactly is it that allowed the loans to bascially vanish several years ago and suddenly bring them back to talking about garnishment to resolve payment issues? Is it just that my credit has finally become 'good' again, giving them reason to think I will now 'voluntarily' pay if coerced??
Are there really rules governing the CA on settlements? You guessed they would settle for $10K, and we have not settled yet as they are saying they can only write off collection fees and a portion of the interest -which leaves a total of $12K as the settlement offer. I am not pleased, and while I understand that perhaps this is still perhaps a 'fair' number given that I obviously took the loans with an agreement to pay, I have suffered through lots of tax return garnishments and 7 years of bad credit. He even tells me that interest charges have not been added to the total in the past 4 years. He says that 'any' agreement to repay through a means 'other' than settlement will allow it back on my credit rating AND kick in the past 4 years of interest totals... what exactly is it that allowed the loans to bascially vanish several years ago and suddenly bring them back to talking about garnishment to resolve payment issues? Is it just that my credit has finally become 'good' again, giving them reason to think I will now 'voluntarily' pay if coerced??
QUOTE(troubledinMN @ Mar 21 2006, 07:49 PM) 
Lynn-
Are there really rules governing the CA on settlements? You guessed they would settle for $10K, and we have not settled yet as they are saying they can only write off collection fees and a portion of the interest -which leaves a total of $12K as the settlement offer. I am not pleased, and while I understand that perhaps this is still perhaps a 'fair' number given that I obviously took the loans with an agreement to pay, I have suffered through lots of tax return garnishments and 7 years of bad credit. He even tells me that interest charges have not been added to the total in the past 4 years.
This I dont believe. I could always log into the DOE computer thru my workstation and see everything updated monthly.
He says that 'any' agreement to repay through a means 'other' than settlement will allow it back on my credit rating AND kick in the past 4 years of interest totals...
Well not unless this loan was just recently subrogated. Another thought....did you by chance borrow thru HEAF??? HEAF was a guarantor here in Minnesota that went tits up in the early 90's. A HUGE mess...loans went everywhere. I know when I was working at the U I had a Heaf missing loan finally surface after 9 years of the student actively looking for it. He had files of letters of his attempts to locate this loan.
what exactly is it that allowed the loans to bascially vanish several years ago
Technically it is your responsibility to contact them. If they garnished your tax returns,they were in contact with you yearly.
and suddenly bring them back to talking about garnishment to resolve payment issues? Is it just that my credit has finally become 'good' again, giving them reason to think I will now 'voluntarily' pay if coerced??
Are there really rules governing the CA on settlements? You guessed they would settle for $10K, and we have not settled yet as they are saying they can only write off collection fees and a portion of the interest -which leaves a total of $12K as the settlement offer. I am not pleased, and while I understand that perhaps this is still perhaps a 'fair' number given that I obviously took the loans with an agreement to pay, I have suffered through lots of tax return garnishments and 7 years of bad credit. He even tells me that interest charges have not been added to the total in the past 4 years.
This I dont believe. I could always log into the DOE computer thru my workstation and see everything updated monthly.
He says that 'any' agreement to repay through a means 'other' than settlement will allow it back on my credit rating AND kick in the past 4 years of interest totals...
Well not unless this loan was just recently subrogated. Another thought....did you by chance borrow thru HEAF??? HEAF was a guarantor here in Minnesota that went tits up in the early 90's. A HUGE mess...loans went everywhere. I know when I was working at the U I had a Heaf missing loan finally surface after 9 years of the student actively looking for it. He had files of letters of his attempts to locate this loan.
what exactly is it that allowed the loans to bascially vanish several years ago
Technically it is your responsibility to contact them. If they garnished your tax returns,they were in contact with you yearly.
and suddenly bring them back to talking about garnishment to resolve payment issues? Is it just that my credit has finally become 'good' again, giving them reason to think I will now 'voluntarily' pay if coerced??
Yup, HEAF loans... so maybe that explains some of the disappearance?
Anyway, I am expecting them to provide written documentation of the loans, a summary of all payments and garnishments applied to them since the default, a summary of collection costs and associated fees that have been added to them, and total interest applied to them. From this, they are offering a settlement that they say is the principal on the loans (which will be the full amount I'm sure, and that all payments I made before the default and all garnishments afterwards will be considered payments on accrued interest), and 50% of the accumulated interest not already paid by payments and garnishments. That is where he comes up with about $12K. Then, if I borrow $12K from somewhere else (home equity/debt consolidation) and pay them off in one lump sum (within 30 days of accepting the settlement), the government debt is erased and my credit is not affected in any way... anything more?
I would still like to think that I can negotiate the $12K down a bit - do you think that is possible, or is their settlement offer considered 'final'?
And regardless of what amount is ultimately 'settled', I realize I will be 1099'd for the written-off amount. Is there anything else I need to request from them as assurances, or anything else I should consider prior to making the agreement?
Anyway, I am expecting them to provide written documentation of the loans, a summary of all payments and garnishments applied to them since the default, a summary of collection costs and associated fees that have been added to them, and total interest applied to them. From this, they are offering a settlement that they say is the principal on the loans (which will be the full amount I'm sure, and that all payments I made before the default and all garnishments afterwards will be considered payments on accrued interest), and 50% of the accumulated interest not already paid by payments and garnishments. That is where he comes up with about $12K. Then, if I borrow $12K from somewhere else (home equity/debt consolidation) and pay them off in one lump sum (within 30 days of accepting the settlement), the government debt is erased and my credit is not affected in any way... anything more?
I would still like to think that I can negotiate the $12K down a bit - do you think that is possible, or is their settlement offer considered 'final'?
And regardless of what amount is ultimately 'settled', I realize I will be 1099'd for the written-off amount. Is there anything else I need to request from them as assurances, or anything else I should consider prior to making the agreement?
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