Has anyone been sued by Access Group?

[KeithDoxen]

My Chapter 7 bankruptcy was successfully discharged about six months ago. I was a no asset case and was able to discharge 40,000 dollars worth of unsecured debt. I also had six figures of student loan debt that I could not discharge of course. These student loans were owned by three different companies. Two of those companies put my loans into BK forbearance and once I was discharged I started paying them again as if nothing had happened. The third lender, Access Group, allowed my student loans to default. It's even in their contract that if you file BK, your loans automatically default.

I owe Access Group over 100,000 dollars. Default means they want the entire balance now. That is comical. Someone who has just gone through a bankruptcy, who has been totally liquidated of assets, and whose income was exceeded by their necessary expenses cannot be expected to pay 100,000 dollars to a creditor upfront. I suspect Access Group knows this. They've given the account to some Mickey Mouse collection agency that calls every day and that I refuse to talk to.

My question is this: has anyone been sued by Access Group? I've googled the subject and I don't see a lot of legal activity on their part. Sallie Mae seems to sue a lot but I've had to look under rocks to find Access Group lawsuits. So is there a chance that they'll just ignore the account and let the statute of limitations run? (And despite what anyone says, PRIVATE student loans that have NO government backing do fall under state statute of limitation provisions --- I've researched the law on this one.) I mean, if they got a judgment, there's not much they could take anyway. They can't garnish my wages in North Carolina, and my assets are non-existent except for the protected basics. But a judgment hanging over my head would suck.

Also, doesn't basic common sense tell these people that they're not going to get anything out of a bankrupt individual?

[adm]

Sorry I don't have an answer but I have a question: I also have a private loan through access group- and I filed Ch 7 in May and have continued to pay.... where does it say you automatically default if you go through bk?

[KeithDoxen]

It's in the contract that you signed with them. I think that contract gives them the OPTION of allowing you to default if you declare bankruptcy. So perhaps with you things fell into place a bit differently. I know with me, I expected them to put me into bankruptcy forbearance like Sallie Mae did. Nope. They just let the clock continue to run and my loans defaulted while I was in bankruptcy. It sounds like you're good to go though.

[currerbell]

Keith - I am in a near identical situation, except I haven't been discharged yet. Otherwise, same lender, same amt of debt, same absence of assets. I knew of this provision in Access's contract and wondered if they will invoke it. I was under an economic hardship forbearance prior to filing. Haven't heard anything from Access since. My options are either default or file an AP and attempt to have the loans reduced or discharged. At any rate, I would like to know what Access has done with/to you. No advice from me, just commiseration. Best to you...

[KeithDoxen]

Keith - I am in a near identical situation, except I haven't been discharged yet. Otherwise, same lender, same amt of debt, same absence of assets. I knew of this provision in Access's contract and wondered if they will invoke it. I was under an economic hardship forbearance prior to filing. Haven't heard anything from Access since. My options are either default or file an AP and attempt to have the loans reduced or discharged. At any rate, I would like to know what Access has done with/to you. No advice from me, just commiseration. Best to you...

Glad to hear from you. I'll bet a lot of people find themselves in this situation given the nature of the student loan bubble that is bursting right now.

Update on my situation: it's been about a year since default and about 8 months since discharge of all my other debts. Access has two collection agencies after me. Both are fairly worthless. One doesn't even leave a voicemail when they call. Nobody has even threatened to sue yet.

Ultimately it costs money to sue and Access knows that I don't have the assets right now to make it worth their while. They'd be better off waiting a few years and they know that. Most states have adopted the UCC which gives lenders six years from default to sue on a promissory note. My current plan is to ignore them, work on my career, and if an attorney calls me in five years threatening to sue, maybe by then I can work something out with them and settle for a reasonable amount. Most of the cases online that involve student loan lawsuits occur several years after default. And then there's always the possibility that the Democrats might pass HR 5043 before they get booted in the fall, which will allow private student loans to be discharged via bankruptcy.

[Silver26]

If that bill were to pass I wonder if it would apply retroactively? Seems completely unfair that most people who are hurting now and must file would miss out on something like that if it passes. I know for us it would have given us a very FRESH start. Our only student loan is 15K but it still would be nice!

[KeithDoxen]

If that bill were to pass I wonder if it would apply retroactively? Seems completely unfair that most people who are hurting now and must file would miss out on something like that if it passes. I know for us it would have given us a very FRESH start. Our only student loan is 15K but it still would be nice!

The House bill has clear language indicating that it will not apply retroactively but the Senate bill is silent on the matter. If both bills pass, they go to conference and hammer out compromised language that is then passed and signed into law. I'm assuming Obama would sign it. So if the bill is passed and the final version is silent on whether it's retroactive, get ready for the lawsuits. The courts will ultimately end up ruling on its retroactivity, and yes, that will mean a lot to us who filed during the period in which private student loans were non-dischargeable.

[phat2009]

[KeithDoxen]

Phat:

The answers to your questions 1 and 3 are unfortunately that the student loan companies can pretty much do what they want in these areas. The problem is that student loans are such an odd bird during bankruptcy --- unsecured debt that cannot be discharged --- that no one has thought all of these issues through and made laws to govern these areas. So student loan companies can pull all kinds of shenanigans like the ones you described. There might be regulations that prevent some of these things from happening, but I haven't heard of any and frankly I doubt it.

I can answer your question 2 however. The UCC states that if the due date of an amount due on a promissory note is accelerated, then the clock starts running upon date of acceleration. So that would be date of default. However, most states have statutes that toll the statute of limitations during the automatic stay of a bankruptcy, the logic being that collection actions can't take place so it wouldn't be fair to let it run. So if you went into default before bk, it would be six years from date of default, with your bk period tacked on at the end essentially. If you went into default during bk, the clock started running on the day of your discharge. That's what happened with me.

[Exployer1234]

Phat as I am learning student loan providers have their own language. I am dealing with my own issue right now and everyday something new seems to pop up out of the blue. I have been in school the whole time, even during the BK process. Now my loans went into suspension because of my BK. This was not supposed to happen, because the fact I was still in school and will not graduate until fall of 2011.

So here is what I am doing . I contacted my lawyer to ask what legal proceeding I need to do to have this reversed and question whether any violations occurred.
I would also request a letter from the student loan provider on what their official reasoning for doing what they have done. If they refuse to send you a statement then I would give that information to a lawyer. Even though you filed BK you still have rights. It is not fair some of the things student loan providers are pulling on people, and normally people will not question what they are doing.

[kartoons19]

Phat,

I'm curious were your loans with AES private loans? My loans have been recently sold to AES, but they are federal loans. It has been almost a month since filing, but I haven't heard one word from them. I have never been late with payments and am currently in school, so my loans are in deferment. I'm just curious if I can expect to have the same issues with AES. It does seem like student loan companies have free reign on what they can do. I hope it works out for you.

[phat2009]

Aes

Hey there -- the loan in question was a private loan that AES was "servicing." My federal loans are also with them. I will give you the whole story so you can be aware for red flags.

I had a total of one semester of BK out-of-school status. I went right back into school after the discharge. First, they had a BK lawyer/collection agency trying to collect during the BK. This group (Zwicker and Associates) never stated that the loan went into default due to the BK, they just stated they were collecting it because it went into default. I wrote to them advising I was in BK, automatic stay, etc., to contact my BK attorney, which they never did and instead continued to try to collect. I was very confused since I thought I was under the automatic stay and as stated, they did not state it was in default due to the BK.

After getting frustrated with them, I contacted AES. AES stated that I should not have dealt with the BK attorney collection, that I should have contacted them – HUH??? In the middle of my BK your BK collection attorney is writing to me, and I need to contact YOU? Makes perfect sense….I can see where any consumer would have understood that.

Anyhow, by now the BK was discharged and I was back in school. AES knew I was in school on the federal loans they serviced, as did all my other lenders, and no one else screwed that up but them. After some wrangling where they appeared utterly confused over the status of the loan but still never claimed it was in default due to the BK, they required an in-school deferment form, which they sent to me, I signed and sent to the school, and the school sent to them. The reply was the loan was not eligible for an in-school deferment. SAY WHAT??

I called, spoke to a nice guy there, and noted that on my federal loans that they were also servicing that I was in-school and on deferment. Why was this loan not appropriate for in-school deferment? He did not know, looked like a mistake to him, he'd check with his manager. He called me back a few days later after checking with his manager and told me "everything was all set, their mistake, ignore any collection letters for a couple of months while it clears out."

A couple months later, I call again because I am still receiving bills from AES that do not reflect the in-school status. “Oh, our rep told you the wrong thing, and we need a different form than the one you sent months and months ago – you sent us the wrong form” (um, they sent me the form to send back to them). New form sent to me, I send new form to the school, they send it off, and guess what next -- AES claims they never received it. I try again with a replacement form, which they will NOT note in their system is on its way so as to avoid default, because now “I have waited so long to get them this form” that I am on the verge of default.

Of course, the form is received "too late" and I went into default because "I failed to get the right form into them over the course of the past 6-7 months." SAY WHAT? I continued to battle, but they sent it over to TERI since it was a TERI loan, and TERI would never return my calls or letters. Turns out, they filed for BK, too, so no one was returning calls and letters, I guess. Then finally, about 2 years later, I hear from a collection agency, who tells me the loan went into default because of the BK. I ask for the full documentation on the loan, but get only the one page signature form/promissory note. Back to AES, they now claim the same -- it was due to the BK, not to the form shenanigans. I ask for that in writing, but instead get the whole "you took too long to send us the form" BS story again in the letter they sent. They refuse to write to me anymore apparently, since I did respond to their lies and never heard from them again. I have not heard from the collection agency, either.

So, my advice is BEWARE of them and everything they do and say – trust nothing they say. It is really convenient how I made lots of calls and wrote letters and sent in a total of three forms and yet I was lax and caused the default. It is a total crock. I was very, very active in trying to get this account in in-schoold eferment and was consistently told the wrong thing or given the wrong form, etc., by AES. See link below, as I am not the only one who claims the same shenanigans by AES.

Interestingly, I copied the Dept of Ed on all letters and requested they investigate AES, and pointed them to the link below, since it seems lots of students have issues with them. Have I heard from the feds?? Nope. No one helps. Maybe some day someone will listen to all the students’ complaints about AES. Good luck!!

http://www.complaintsboard.com/complaints/aes-american-education-services-c116627.html

[phat2009]

Thanks go out to Keith, I thought I could reply to each message and sorry about that. I will definitely stay posted on that new legislation and hope it is retroactive for those of us who did not get that benefit (and may now find ourselves in a huge mess with our student loans due to the practices of the lenders/servicers).

To Exployer1234 -- please let me know what your lawyer says -- I have not been able to find a lawyer to handle this stuff, as it seems like there are the BK attorneys who only file/handle the petitions, and this is all post-BK messiness that at least my BK attorney knows nothing about. If anyone knows what kind of attorney I need to ask for, please tell. Thanks!!

[Exployer1234]

My lawyer emailed me back today. I will copy the response she sent back to me on what to do about my loan status. I feel very fortunate that my lawyer is willing to answer questions post BK and does really care what happens. She even answered my question on Sunday. Here is the email, I hope it helps you out. I have omitted the name of my school I am attending due to I want privacy in some aspects.

My lawyers response today:
"I would recommend asking an associate at (my school), if you haven't already. Seek out the associate that first consulted you on the issue of the result of bankruptcy, which you referred to before we filed.
Technically, you have been discharged, so you are no longer 'in bankruptcy', and the rules about that pending time period should no longer apply. The implications of your bankruptcy should now be dictated by the terms of your loan agreement with the lender.
When you make your inquiry, you may ask if there is some paperwork that you are supposed to sign to reactivate your loan status, due to your discharge. It may be that some automatic process may have kicked in, that needs to be rectified.
(There is a what might be a similar provision in the Code regarding utility companies, which are able to require a new contract to continue providing services.)
I will attach your Order of Discharge, if you have not received it. (You should have by now). Keep it handy, should you need to send it to Direct Loans or for your file at (my school).
It may be that the 'suspended' status is a delayed reaction on the Direct Loans' part, and they have not adjusted yet to the finality of the discharge online.
Either way, the best way to start is to get the full position, in detail, of the Lender.
When and if you get a clear answer, please also get a reference point in an authoritative regulatory document that dictates what they are telling you has to happen (i.e. (1) What is the document? - lending agreement, federal regulation, etc; (2) What is the paragraph, page number, etc, for this provision (within the document)?). You may have to speak to a management-level person for this information.

I hope this helps. Let me know how it goes, with any document that is referenced to you."

[kartoons19]

Phat,

Thanks for the information. That really sucks. I can understand how frustrating it is to be proactive and still not get anywhere because of their incompetency. Hopefully it will all work out.

My undergrad federal loans were sold to AES, it wasn't like I chose this company. I'm in grad school now and will be graduating next May. Hopefully I can consolidate my loans with another company, although with a bk on my record this may be a challenge.

Good luck to you.