I apparently have a loan through NYS HESC. It's in default. According to the HESC web site the loan was granted in 1979. A colection agency is contacting me about the loan. How do I ascertain that their assertion about my obligation is accurate?

Thank you for any assistance you can provide.

You checked it on the HESC website right??? That is the state guarantor. Are you able to see a loan statement online? Or you can ask the CA for a client history. It will show principal, interest and collection costs.

I did check on the web site -- when I called HESC one of the answering system options was "Request Promissory Note." I would like to see a copy of my obligation since this was so long ago. How do I establish that my obligation is accurate since I don't remember this one specific loan.

Well in english, how do you know if you actually owe this debt?? Well, they will send you a copy of your prom note. It will have your signature on it. The loan itself can be tracked back to the school and semester you attended. These are federal debts....there is quite a good paper trail. So unless you have proof that you paid it off, you should probably be prepared to pay the debt.


Have you made any payments on it?? Been garnished yet?? Wages or tax return??

Thanks for your responses, Lynn. I will request the promissory note. No garnishment or anything, but I did receive a demand letter from some place called ECMC.

How are they to deal with? From what I've read, not too easy.

Particulalry concerned because just coming out of BK was hoping to rebuild -- SL hasn't been on any of my CR's but now from what I have read I can expec t to see ECMC place TL's on all 3 reports. Anything I can do to forestall that from happening?

Will ECMC have all the records I need in order to address this situation?

Guess I'll go the rehab route. These are defalted loans so I don't think I can consolidate them. (The loans were pretty small, but now with interest and fees they are nearly triple what they were originally.)

Any advice appreciated. Quite nervous and worried about how to deal with this.

If these loans are from 1979, I don't think they will show up on your credit report. You may be able to consolidate them, so I would definitely check into that before doing the rehab thing. I don't usually recommend rehab to anyone with loans that aren't on their credit reports, because it doesn't do a whole lot for you.

Well, my concern is that if I rehab with ECMC -- or do anything with them (which of course I will HAVE to do since they are the ones who apparently now handle my loan) that that will cause the loan to end up on theCRs. Is this not a possibility? Should I speak to them about this and see if I can negotiate with them to not do this while I am making payments? Or am I dreaming.

I will ask my CU about loan consolidation. Tahnks for the tip Quilty. (This was such a tiny loan. Paid off all my others and this one comes out of nowhere to bit me. hard. cuz now it aint tiny no more.)

I don't *think* it will end up on your CR, but nothing's certain in today's world. But like I said, I wouldn't rehab it; I would consolidate it. The CU may not be the best place to turn to for consolidation; there are many companies out there that will do SL consolidation.

My only concern would be that this might be difficult to consolidate since it's so old and so far into default. But others here have consolidated very old loans without rehabbing them. I'd give it a shot and see what I find out, were I you.

Once you complete the rehab, the new loan will show up on your credit, but the defaulted loan will not.

Well, I got some more info. Over the years, $3500 has been taken as "offsets" to the loan from my IRS refunds -- but none of those offsets matter. I spoke with gauarntor today and they told me that all thos offsets went to the interest and so really had no effect at all on the loan which is now four times what it was originally.

ECMC has tagged on $5g to the loan+interest amount that was recorded before they took it over.

Big question: CAN I consolidate if I am only two months out of BK?

Would anyone recommend a consolidator or point me to a link?

Thank you!

Credit is not an issue with federally insured loans. And yes you can consolidate.

I would say go with Direct Loans...they have the most flexible payment plans.

Thanks, Lynne. I am resarching the William D Ford site, thanks to your advice.

The letter I got from ECMC gives me 30 days to contact them before they begin more aggressive measures. So I guess I will call them, make myself known, share with them my financial situation (I have spreadsheeted our household budget -- we're not hiding anything; we live a very spartan life on a spartan budget) and then...what? Can I ask them for 30 days to allow me to explore my options?

Because of how inflated the loan has become does it make sense to borrow money from a relative (don't know that i could, but IF this were an option) in an effort to settle this for 50 cents on the dollar? The guy I spoke at the guarantor suggested this -- he was very nice, sympathetic. Maybe even empathetic.

They will not settle for 50% off. At best you are looking at having the collection fees waived..about 18.5%. Being federal insured they know they can collect indefinately.

ECMC will want you to start making payments asap. They wont give you 30 days to explore options, believe me!!

Do you recommend that I request from ECMC a copy of the promissory note? I would assume that as with other credit issues, the existence of the loan needs to be formally verified by whoever is seeking payment.

You can certainly do that, but they will see it as a stall tactic. You know you borrowed the money, it can be easily verified in the NSLDS ... they're not going to look favorably on that request. They can, and they will, verify and produce the promissory note, even though it may take them some time to get it. In the meantime, they can initiate garnishment - they don't have to go to court to get a judgment - and you will have at that point more or less backed yourself up against a wall.

My suggestion is the same as Lynn's - consolidate the loan, and then if you can't make payments, request a hardship forebearance or an income contingent payment.

Trust me, I know from experience, you don't want to jack around with the government on these loans. You've been playing with this for 27 years; your time is quickly coming to an end.

Solid advice. Thanks again. And thanks for the warnings. In terms of "forbearance" and "income contingent" payments -- is that something I would discuss with the consolidation people or with the CA? (Our financial situation is so tough I'd be surprised if we could get consolidated but at this point I know very little about the process and am just starting my research.)

You would discuss that with the consolidation folks after it's been done. NOT the CA.

Why would you be surprised if you get consolidated??? Consolidation is not credit based and is pretty automatic.

Also, you want to start looking at "deferments" and not "forebearances". These are two completely different animals. Deferments are a right, if you meet the criteria..low income, hardship, unemployment. Forebearances are administrative...more or less a courtsey.Direct loans has a whole page on deferments.

Thanks, Lynn, for the tremendous advice. I will check it out.

Quilty, I was looking at one of your earlier comments in this thread -- in asking for the promissory note -- as you explain -- I'd be asking for trouble. i.e, making things worse rather than better. But can a request for a promissory note be seen not as an affront but rather as the proper exercise of my rights in this regard. I stand with you on paying the obligation and not playing with fire. But doesn't a debtor have a right to request verification according to the statutes? Is it standard practice or permissible for such a request to be met (by the CA) with a retaliatory response (i.e., immediate AWG or unwillingness to negotiate on payments).

Would I be better off asking for the Promissory Note AFTER I begin repayment? (Or, perhaps, there is a nice way of asking?)

Lynn, if you have an opinion would you chime in? You both have your fingers on the pulse so I'm interested in your thoughts.

Thanks!

It is seen as a stall tactic...absolutely. It is your right, however you have already verfied the loan with the DOE. Prom notes are standard and there will not be any great revelation revealed other than you signature.

Thanks again, Lynn.

One other question: The ECMC letter gave me 30 days from date of mailing to contact them. Should I set the consolidation thing up BEFORE I contact ECMC or should I just make contact now just to let them know I'm responsive?