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Hi all, I would be really appreciative for any advice that can be offered. This is just a bit of background, but not exactly necessary reading if you want to skip to the bottom of the post. I graduated from school in May 2012. At graduation, I was 2 credits short of the requirements, and thus made a plan with the school that I would walk in the Spring graduation and take a course during that summer to finish out my credits. The class was $3000 (crazy expensive for one course, but my school had a rule that your last 50 credits had to be taken on campus, so I had no other options). I was unable to take out any more student loans, for some complicated reason that I can't remember, but related to my "graduated" status. My father said he could pay the bill and decided to take out a PLUS loan. I thought everything was taken care of, I finished the course, passed, received my grade, and a few months later received my diploma and my transcripts. A few days ago I received a letter from a debt collector, stating that I owe my school about $6000. I immediately thought this was a mistake, for the reasons listed above. My school makes it clear that if you have a financial hold on your account, you will not receive your grade, diploma, transcripts, etc. Additionally, I never received any notices or bills from my school and my credit report is clean. I called my school and they verified that I owe them the exact amount noted on the letter from the debt collector. They said that the existing amount owed is due to compounded late charges. When I spoke with my dad, he assured me that the bill had been paid and said he would look through his records so that we could provide proof. A few days pass, and he calls me to say that unfortunately he never received the loan money, and that after he applied for the PLUS loan he never checked to see if the application was accepted or not. So, clearly it was not accepted, and no money was ever paid. Here's what I'm asking for advice on: I want to negotiate to pay a lump sum equaling the original amount owed ($3000) and to have them drop all of the late charges (another additional $3000). I feel that I have leverage because my school allowed me to finish the course and sent me my diploma and transcripts without ever mentioning that I still owed money. I never received any emails, letters, phone calls, etc. The problem is that they won't discuss it with me and say that all negotiations have to be made with the debt collector. Today I sent the debt collector a letter to verify the debt. I'm anticipating that they will be able to provide all of the necessary paperwork since the number they quoted matches the number that my school said that I owed when I called. When I receive this paperwork, I want to send the debt collector a letter negotiating to pay them a single lump sum of $3000. How do I draft such a letter? Do I mention that the original creditor never informed me of the amount owed, thus my reason for wanting them to drop the late charges? What sorts of terms are necessary to state here? Thanks!

Hi. I have a family member who might be coming into some money from an inheritance. One of the things he would like to do is pay off his defaulted federal student loans, which he has been ignoring for almost a decade. I am trying to help him with this, and had a few questions I was hoping someone might know the answer to. Here's the background. The principal is approximately $10K, with $4K in fees and $7K in interest listed on the latest collections statement from Performant Recovery, for a total of $21K. There have been no payments made in at least six or seven years. In checking his credit reports, I don't actually see the debt listed, but he has a very thin file and for the most part stays off the grid. He'd like to get past all of this, and get this debt paid off. A couple questions: 1) Is it typically possible to negotiate either the fees or interest down to a lesser amount? The collections letter does say "You may have a unique opportunity to ... reduce the amount of your obligation if you are are willing to repay the remaining balance of your student loan in full." Is this a valid option, and if so what should we expect? 2) He's thinking about paying this off all at once given the possible windfall, but I understand that from a credit report point of view it is best to get on a plan and a pay off over time. Is that still the case, and if so when is the fastest he can get this completely paid off? He'd like to get this done asap. Thanks.

So my husband has a ton of student loan debt all incurred before we were married. He has 200,000 in federal loans, 25,000 in private and a 20,000 judgment for a bar study loan which doesn't count as a student loan (yikes! I know!!). We are currently paying off the federal and private student loans but haven't touched the 20,000 judgment. He was underemployed for a long time making around $12,000/yr so he just couldn't pay. He recently got a better job (yay!) but now I'm worried they are going to try to garnish his wages. My question is, should we try to negotiate to pay off the judgment at a reduced rate before he files taxes in April and they find out he has a job, or should we just wait and hope that the SOL passes/they never come after the money. The judgment was issued in 2008 and we live in WA state. The money we would use to pay is my money from an inheritance that they will not be able to take unless we give it to them. He doesn't have anything they can take other than wage garnishment but as far as they know he only makes $12,000/yr and in WA that is below the limit so they can't garnish. I just don't want to stir the pot and have them re-examine his file and figure out he now has a better paying job. Any advice? If you think we should negotiate, what is a reasonable offer to make?