I have a defaulted student loan and the collection

I have a defaulted student loan and the collection agency is now threatening garnishment of my wages. They have taken my tax return the past 4 years, which is fine (we file an injured-spouse form so they don't take all of my husband's). I had an agreement with a previous collection agency that allowed me to make small payments for 9 months, and then would allow my loan to be removed from default status. Just before the final payment, the woman I had been dealing with called and said that the Dept. of Ed had taken it back, so our agreement was now void.

The next contact I received was from a very rude man at Allied Interstate Inc, who called me at work and told me I now also owed for a previous student loan (it was paid off in 1996). I explained our financial situation (my husband works full time making slightly above minimum wage, and I work part time and take care of our son, who has special needs). He insisted that I need to pay $250 a month, which is ridiculous. I told him about my previous agreement and asked for lower payments, and he laughed at me.

In the mail today, I received 6 statements from the DOE (with 6 different amounts), each stating that they were going to garnish 15% of my wages. I work 10 hours a week, so this would be less than the amount I offered them. I have no problem with them taking my tax return; I know this is my debt. If it weren't for the birth of my son, the entire thing would have been taken care of by now (I taught science in an economically-depressed area and had 2 more years before the majority of my loans were forgiven). Please advise me what to do- I'm tired of dealing with rude collection agents when I've tried very hard to be polite and up-front with them.

3 Answers

I know several of the collectors at Allied....I even trained a few.

You still need to consolidate this ASAP with Direct Loans Consolidation Loan program.

How to Deal with Illegal Loans..OhioGal's Primer
http://www.debtconsolidationcare.com/paydayloan/dealingwith-illegallenders.html
PDL's are ILLEGAL in the following states...
AR, AZ, CT, GA, ME, MD, MA, NJ, NY, NC, PA, VT AND DC
OH AND NH have very restrictive low cost interest rate laws.

SOL for all states
http://www.debtconsolidationcare.com/statute-of-limitation.html

Thank you. I just called Allied (and asked to talk with a different rep), and spoke with a very nice woman. She said that with the very few hours I work, the garnishment probably won't go through. She then said that she would send me hardship paperwork, which she has no doubt I will qualify for. I explained that I will gladly make small payments, and she said that we can work out something affordable for me. I'm glad I contacted them again, and wouldn't have tried if you hadn't suggested it: I assumed that all of their agents would be the same.


You should have consolidated with Direct Loans under the ICR (income contingent repayment plan) a long time ago. 

 

With the garnishment notice you received, it gives you the opportunity to appeal on the basis of hardship.

How to Deal with Illegal Loans..OhioGal's Primer
http://www.debtconsolidationcare.com/paydayloan/dealingwith-illegallenders.html
PDL's are ILLEGAL in the following states...
AR, AZ, CT, GA, ME, MD, MA, NJ, NY, NC, PA, VT AND DC
OH AND NH have very restrictive low cost interest rate laws.

SOL for all states
http://www.debtconsolidationcare.com/statute-of-limitation.html

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