Can't afford private school loan repayment
November 21, 2011 11:43 AM Subscribe
$45K in school loans to private bank (Wells Fargo). Lawyer/collections office wants money. There is no money. Now what?
They've offered to do $15k on a payment plan or $6800 as a lump sum to settle the debt. There is no money. My husband lost his job in July and hasn't found anything. Savings are almost gone.
We literally can not afford payments nor do we have a lump sum of anything other than a few hundred dollars in December. What can or should we do? We reside in Georgia, America. Send private messages to: owebutnowheretogo@gmail.com
They've offered to do $15k on a payment plan or $6800 as a lump sum to settle the debt. There is no money. My husband lost his job in July and hasn't found anything. Savings are almost gone.
We literally can not afford payments nor do we have a lump sum of anything other than a few hundred dollars in December. What can or should we do? We reside in Georgia, America. Send private messages to: owebutnowheretogo@gmail.com
Tell them firmly that you have no funds to pay at this time and to not contact you again. They can continue to send you bills but they can't call you. Send a certified letter. Don't let yourself be harassed and bullied. When you're in a position to start paying or can make arrangements, contact them. There are also unemployment deferments.
Do not pay money you don't have. Wells Fargo will be fine without your payment. Don't jeopardize your health (food, medicine) or housing (rent/mortgage) to pay them. Deal with it when you're back on your feet.
posted by shoesietart at 12:04 PM on November 21, 2011
Do not pay money you don't have. Wells Fargo will be fine without your payment. Don't jeopardize your health (food, medicine) or housing (rent/mortgage) to pay them. Deal with it when you're back on your feet.
posted by shoesietart at 12:04 PM on November 21, 2011
If there is anyone, at all, in your family or friends who would front you 6800, you'd be out of school debt at a huge bargain. w00t. However, if there's no money, tell them there's no money, and that while you understand your obligation to repay the debt, the economy is not cooperating. They are not allowed to harass you (check out Consumerist for the rules debt collectors must follow). What can you actually afford? A dollar a week? Offer what you can actually pay.
posted by theora55 at 12:05 PM on November 21, 2011 [3 favorites]
posted by theora55 at 12:05 PM on November 21, 2011 [3 favorites]
The bank should be making this easier for you, so I'm a bit confused why you're in collections. Have you spoken directly with a loan officer from Wells Fargo? For my student loans, I was able to file for an "economic hardship forebearance" which bought me 6 months without payments although interest accrued during that time period.
posted by Slarty Bartfast at 12:13 PM on November 21, 2011
posted by Slarty Bartfast at 12:13 PM on November 21, 2011
The bank should be making this easier for you, so I'm a bit confused why you're in collections.
Wells Fargo probably sold the debt for whatever reason. As educational debt becomes less and less secure, more and more companies are doing that.
I sincerely recommend reading this page, from the Georgia Governor's Office of Consumer Protection, about debt collections in that state. There's a detailed list of what debt collectors are and aren't allowed to do, and instructions for dealing with them, getting them to stop calling you, and filing a complaint if you so desire.
posted by valkyryn at 12:18 PM on November 21, 2011
Wells Fargo probably sold the debt for whatever reason. As educational debt becomes less and less secure, more and more companies are doing that.
I sincerely recommend reading this page, from the Georgia Governor's Office of Consumer Protection, about debt collections in that state. There's a detailed list of what debt collectors are and aren't allowed to do, and instructions for dealing with them, getting them to stop calling you, and filing a complaint if you so desire.
posted by valkyryn at 12:18 PM on November 21, 2011
Mod note: From the OP:
The debt is somewhat old, which we've fallen behind on before. They did not contact me, they contact relatives who are out of state, who then contacted me. We told them that we'd think about what to do, and they said they'd call us back tomorrow at noon for our decision.posted by jessamyn (staff) at 1:08 PM on November 21, 2011
Carefully check the consumer protection laws, federal and for your state. There may be something in there about them having to contact you in a certain manner before sending something to collections.
I would personally contact Wells Fargo and raise a little hell about:
1) Why are they telling your out of state relatives about your debts?
2) Why did they send you to collections before talking to you about it?
3) Ask them what they are going to do to make this right.
4) Insist (backed up in writing later) that they do not make any negative reports to any credit agencies about this matter.
posted by gjc at 6:56 PM on November 21, 2011 [1 favorite]
I would personally contact Wells Fargo and raise a little hell about:
1) Why are they telling your out of state relatives about your debts?
2) Why did they send you to collections before talking to you about it?
3) Ask them what they are going to do to make this right.
4) Insist (backed up in writing later) that they do not make any negative reports to any credit agencies about this matter.
posted by gjc at 6:56 PM on November 21, 2011 [1 favorite]
I have had an educational debt with Wells Fargo before. In my case, when it went to collection (surprisingly quickly) I found out that the agency did not own the debt in the same way many other collections agencies bought debts. Instead, the company is contracted through Wells Fargo to help them collect the debt. I eventually paid off the amount by continuing to make my payments to Wells Fargo.
Some things that may be helpful: I told them I could not make the payments they were demanding at the time, because I did not have the money. I worked out a much, much, MUCH lower payment that was manageable at the time. It got them off my back and, more importantly, it got them to stop calling relatives (very sneaky!)
Tell them what you can pay now, even if it's just $10 a month or something nominal. Get them to agree. They will at least leave you alone, and you are at least showing that you are making effort to eventually have the debt taken care of.
An aside: I would not recommend to anyone reading this to use Wells Fargo educational loans unless absolutely no other options exist. Their tactics seemed more than questionable compared to any other companies to whom I've ever owed money. Avoid.
posted by erstwhile at 7:59 PM on November 21, 2011
Some things that may be helpful: I told them I could not make the payments they were demanding at the time, because I did not have the money. I worked out a much, much, MUCH lower payment that was manageable at the time. It got them off my back and, more importantly, it got them to stop calling relatives (very sneaky!)
Tell them what you can pay now, even if it's just $10 a month or something nominal. Get them to agree. They will at least leave you alone, and you are at least showing that you are making effort to eventually have the debt taken care of.
An aside: I would not recommend to anyone reading this to use Wells Fargo educational loans unless absolutely no other options exist. Their tactics seemed more than questionable compared to any other companies to whom I've ever owed money. Avoid.
posted by erstwhile at 7:59 PM on November 21, 2011
Be very careful about settlement offers, when you have money to consider them. $6,800 is a very low buy-out for a $45,000 debt. Make sure to have a lawyer carefully review the documentation before you'd cut a check, less the balance be still claimed against you.
posted by MattD at 8:48 PM on November 21, 2011
posted by MattD at 8:48 PM on November 21, 2011
I would not recommend to anyone reading this to use Wells Fargo educational loans unless absolutely no other options exist. Their tactics seemed more than questionable compared to any other companies to whom I've ever owed money. Avoid.
Totally seconded. After years of flawlessly making above minimum payments ahead of schedule I had an electronic transfer fail to go through because *they* redesigned their website. Money (like $2000) was withdrawn from my checking account, but failed to appear on my Wells Fargo loan statement and I had no warning of this until the day I was "overdue" when I started receiving daily phone calls at home, work, on my cell, and on my wife's cell threatening to send me to collections unless I wired money immediately. This continued for five days until my bank was able to convince them they received the money already. Fortunately, it didn't show up on my credit report, but it pisses me off to no end that this company, who was servicing a federally guaranteed loan, who I didn't choose (my loans were sold to them after I took them out) who in the end will make about $150,000 off of my hard work, would be such total bastards about things. When our home mortgage was sold to Wells Fargo, we refinanced. Fuck you Wells Fargo, seriously.
/sorry for the derail, but maybe it helps you to know the kind of corporate culture they have. Yeah, know your rights.
posted by Slarty Bartfast at 10:00 PM on November 21, 2011
Totally seconded. After years of flawlessly making above minimum payments ahead of schedule I had an electronic transfer fail to go through because *they* redesigned their website. Money (like $2000) was withdrawn from my checking account, but failed to appear on my Wells Fargo loan statement and I had no warning of this until the day I was "overdue" when I started receiving daily phone calls at home, work, on my cell, and on my wife's cell threatening to send me to collections unless I wired money immediately. This continued for five days until my bank was able to convince them they received the money already. Fortunately, it didn't show up on my credit report, but it pisses me off to no end that this company, who was servicing a federally guaranteed loan, who I didn't choose (my loans were sold to them after I took them out) who in the end will make about $150,000 off of my hard work, would be such total bastards about things. When our home mortgage was sold to Wells Fargo, we refinanced. Fuck you Wells Fargo, seriously.
/sorry for the derail, but maybe it helps you to know the kind of corporate culture they have. Yeah, know your rights.
posted by Slarty Bartfast at 10:00 PM on November 21, 2011
This thread is closed to new comments.
Debt court (I don't know the legal term) isn't the worst thing in the world. In fact, it's way easier, if you're at the point where you have to make reasonable payment arrangements, because whatever you settle upon is court-ordered and then the collections agency leaves you alone, so long as you make those payments. The court also takes your actual situation into way more account than the faceless phone drones at the collections agency.
posted by xingcat at 11:49 AM on November 21, 2011