Help!!! Perkins loan sold to collection agency!

[sscott4775]

I just received word from a previous college that I attended that my Perkins Loan has been in default and has been sold to a collection agency!
I don't have the money to pay it off and this frightens me because I had plans to go back to school, but because this is in default, I can't get any more aid.

Can someone please tell me if this debt is dischargeable because it doesn't seem that way to me and I was going to file anyway.

[Exployer1234]

No it is not dischargeable. How long have your been in default?

[wnguyen]

Student loans are generally not dischargeable unless you can prove that it causes you hardship in foreseeable future, and this process is costly. Just try to work it out with them for a repayment plan.

[wonderingrov]

You might check with them and see if you can 'rehabilitate' the loan if it is federally guaranteed. This may be the best way to handle it if you plan on going back to school.

[dumpinmydebt]

No it is not going to be discharged in the bankruptcy.

You need to call them asap and ask them to put it into hardship, which will allow you to not have to make payments for a few months and not get dinged for it. Don't ignore it because they will only come after you harder.

My hubby was in a similar situation, however, he called before it went to collections (they gave him like 6 months of warning in letters he received every month.) They placed the account on hold and he has been approved for new loans (currently in school.)

You can't just ignore student loan collectors like regular collectors. You need to talk to them now, otherwise you will never get a Federal loan for school. The longer you wait, the less chance you have of them allowing you to get more loans.

[sscott4775]

Thank you all for the information. I'm going to give them a cal promptly and get something straightened out.
I'm still going to go ahead and file as planned, and this will be just one more debt to add. I'm sure everything will work out and I appreciate the advice!

[dumpinmydebt]

Thank you all for the information. I'm going to give them a cal promptly and get something straightened out.
I'm still going to go ahead and file as planned, and this will be just one more debt to add. I'm sure everything will work out and I appreciate the advice!

You are aware it's not going to get discharged unless you are on disability and in no way can ever possibly work. So, this isn't just another debt to add to the bankruptcy. Just hoping you understand that.

[sscott4775]

You are aware it's not going to get discharged unless you are on disability and in no way can ever possibly work. So, this isn't just another debt to add to the bankruptcy. Just hoping you understand that.

Hi,

I understand that it can't be discharged, but what I was assuming (which I may be mistaken) is that since this debt is now in the hands of a new creditor, then I should list them on the papers just to be thorough with the judge so he/she could see that not only do I now have this debt from the university, but also new debt (probably in the range of $700+ in collection fees) so he could see what my new debt total is.

I'm going for a consultation with an attorney next week and will bring this up at the meeting, but if I may ask your opinion on this matter, was I correct in assuming that this debt that is now in the hands of the collection agency represents a new debt/creditor, or should I just list the debt with the original amount and with the original creditor. I hope that all makes sense! lol

Thanks!

[dumpinmydebt]

Yes, you're correct in how you are listing it. You will need to list the creditor so they are aware. You need to list all original creditors and all collection agencies. Mainly so they all are made aware of the bankruptcy since they are not permitted to attempt collection once you file. Obviously the other collectors (not including the student loan collectors) need to know so they can write off your debt when the bk is discharged.

Just please contact them the student loan collector before you file. I cannot stress that enough. If it doesn't come out of collections, you will not be allowed to get more loans. They cannot be ignored like the other companies. The sooner you speak with them, the easier it will be for you.

The student loan companies usually want to work with you. At least, my husband's student loan company was very nice about everything. It was a painless process. They only required him to fill out a form claiming he needed to put off the payments due to financial hardship. We never even spoke on the phone, all communication was via email.

[KeithDoxen]

I think your attorney will handle a lot of this for you. During my bankruptcy, my attorney told me to put all of my mail from original creditors, collection agencies, etc, into a big bag so that he could sort it out. He was being somewhat facetious of course but the point was that he wanted to make sure that all of the original creditors AND collection agencies were listed just in case anything had been sold. So you should probably list them all but be sure to run the whole thing by your attorney, as he or she will be familiar with the customs of your jurisdiction's trustees.

[sscott4775]

Just please contact them the student loan collector before you file. I cannot stress that enough. If it doesn't come out of collections, you will not be allowed to get more loans. They cannot be ignored like the other companies. The sooner you speak with them, the easier it will be for you.

Hi,
I have another question for you and I'm sorry if this seems like a dumb question...I'm feeling kind of thick today, lol. Is it required, provided I want to receive additional student loans, which I do, to contact the lenders and notify them of this filing, and does that also include the collection agency, or do I just need to contact the collection agency, which I'm going to do, set up a repayment plan, and remain silent on the issue of bankruptcy?

What I was planning to do was contact the collection agency tomorrow and set up a repayment plan ($50/month is all that I could possibly do) and then file sometime within the next two weeks, provided everything is in order, which it looks like it is.

Thanks!

[Exployer1234]

Your student loan company will be notified when you file BK. I have two different lenders as well and I contacted one of my lenders that was not through the government. I listed them on my BK and everything went into an automatic stay while I was going through the BK process. Since I was not in default my BK was not held against me.

The only way you can get additional loans or grants is not to be in default. i would contact the lender and ask what they can do for you, since you are going to want to go back to school. Normally they will do everything they can to help you out. Just do not ignore them.

[sscott4775]

Your student loan company will be notified when you file BK. I have two different lenders as well and I contacted one of my lenders that was not through the government. I listed them on my BK and everything went into an automatic stay while I was going through the BK process. Since I was not in default my BK was not held against me.

The only way you can get additional loans or grants is not to be in default. i would contact the lender and ask what they can do for you, since you are going to want to go back to school. Normally they will do everything they can to help you out. Just do not ignore them.

Hi exployer,

Unfortunately, my debt was sold off from a former university I attended, and I went to, what may be considered the least healpful institution of higher learning in the United States. They have notoriety for giving students runaround and with me there was no exception.

Case in point: I had a representative from the billing office tell me that if I submit an in-school deferment that the default would be cleared. One week later, when I called to check upon the status of that deferment, another representative tells me there was no record of my call and that the debt has been sold to a collection agency.

In other words, talking with them came to no avail because they said they could not pull the debt out of collections and there was nothing they could do. I'm planning on going back to school next fall (assuming I can get this collection agency paid off in time) and while all of my other loans are in deferment this one, (Perkins), is in default and it looks like I have no choice but to deal with the collections agency and possibly see about rehabilitating the loan.

[dumpinmydebt]

Hi,
I have another question for you and I'm sorry if this seems like a dumb question...I'm feeling kind of thick today, lol. Is it required, provided I want to receive additional student loans, which I do, to contact the lenders and notify them of this filing, and does that also include the collection agency, or do I just need to contact the collection agency, which I'm going to do, set up a repayment plan, and remain silent on the issue of bankruptcy?

What I was planning to do was contact the collection agency tomorrow and set up a repayment plan ($50/month is all that I could possibly do) and then file sometime within the next two weeks, provided everything is in order, which it looks like it is.

Thanks!

They will be notified by the court when you file. Until you actually file, then there is no need to really tell them.

You don't need to set up a repayment plan, especially since you are filing in a few weeks.

What you need to do is just tell them that you've been having financial difficulty and that is why you haven't made any payments. Explain to them that the reason you haven't contacted them is because you were scared and you just didn't know what to do. Tell them that at this time, you are unable to make payments at this time. Let them know you would like the payments to be put on hold due to a hardship. They like when you are honest. They really do want to help you. I know it's weird when you hear of a collector wanting to help, but student loan collectors are just not the same (in my experience.)

Next, ask them about it being in collections and ask what you need to do to get it out of collections. Advise them that you are planning on returning to school, and you would like to be eligible for additional loans. You may need to make a payment to do that, but they will let you know what options you have. Believe me when I say, they don't want it to be in collections and they want you to get back on track. Don't be afraid of them and be polite. I know it's a stressful situation, my husband was in it before and we were terrified of what was going to happen. But it was piece of cake. They placed in on hardship and even backdated it so it doesn't ever appear that we were late, when in fact, we were 6 months late.

In order to receive additional loans, you need to get that loan account out of collections. Telling them you are filing will not change your status of eligibility for future loans.

[Exployer1234]

Hi exployer,

Unfortunately, my debt was sold off from a former university I attended, and I went to, what may be considered the least healpful institution of higher learning in the United States. They have notoriety for giving students runaround and with me there was no exception.

Case in point: I had a representative from the billing office tell me that if I submit an in-school deferment that the default would be cleared. One week later, when I called to check upon the status of that deferment, another representative tells me there was no record of my call and that the debt has been sold to a collection agency.

In other words, talking with them came to no avail because they said they could not pull the debt out of collections and there was nothing they could do. I'm planning on going back to school next fall (assuming I can get this collection agency paid off in time) and while all of my other loans are in deferment this one, (Perkins), is in default and it looks like I have no choice but to deal with the collections agency and possibly see about rehabilitating the loan.

Talking to the school sometimes gets you no where. I am finally getting my loan check. It has been 9 months since I started this process. My loans were not in default, but my BK did give me some issues.

You need to go speak directly to the lender that has the loans, not the collection company. That is the only company that can lift the default status. The university can not lift the default status, it has to come directly from the lender. Most lenders will have a website for forms, so even if you speak to them and request the forms they may not send them. That is why it is always a good practice to look for the forms yourself. Find out the name of the person you are speaking with, the time, date, and a list of things that were spoken about in the conversation. That way if you have any problems next time you have information about who you spoke with. Sometimes you even need to speak with a member of management. I personally would not waste my time going through the university. The lender is the one you need to be dealing with.