Unfair monthly payments

I was recently contacted on 7-13 by an Allied representative regarding a defaulted student loan.

He denied me the opportunity to make flexible payments by monthly intervals. He also insisted on automatic withdrawals with my checking account.

I refused his requests until today when I requested my debt information from the creditor in full along with a written payment agreement.

He said he would send me the debt information. However, when we negotiated the payment agreement, He insisted on me paying the accumulated interest in full before I make monthly payments. He demanded I pay $300.00 this month and $500.00 the next month.

When I explained that the payment was too high too soon, he explained the interest must be paid in full before I make flexible monthly payments. Is this valid? Are there consumer laws in place that protect my rights. Any advice would be much appreciated. Thanks all.

Thanks ArDen, I hope to hear from Polly soon. I'm at my wits end with the CA.

I would not work with this so called company, work with the dept of ed directly, here is an example from Minnesota regarding allied

July, 2005

Your Legal Rights: Debt Collections - Know Your Rights (PDF)


Consumer Alert: allied interstate Settlement and Restitution


Minnesota Attorney General Mike Hatch recently announced a settlement with Allied Interstate, Inc. (“Allied”), resolving a consumer protection lawsuit filed in June, 2004, against the debt collection agency. The lawsuit alleged that Allied used unlawful tactics to collect debts that were not valid or to collect money from the wrong Minnesota consumer.

Under the settlement, Allied agreed to cease making false representations about the status or character of consumer debt by discontinuing phone calls to innocent consumers after these consumers have orally told the debt collector they have the wrong person or that they do not owe the debt.

Minnesota consumers who are able to show that Allied continued collection efforts after the consumer advised Allied that the company had the wrong person or who received recorded messages from Allied will be entitled to a payment ranging from $100 to $1000. Minnesota consumers with complaints against Allied must submit a written complaint to the Minnesota Attorney General’s Office no later than August 29, 2005.

If you have any questions about the settlement or your eligibility, call the Attorney General’s Consumer Assistance Line at (651) 296-3353 or (800) 657-3787.

How can a debt collector contact you?

Collectors may contact you by mail, telephone, telegram or fax between the hours of 8 a.m. and 9 p.m.

Collectors may not contact you at work if they have reason to know your employer prohibits such communications.

Collectors may contact other people to find out your home address and phone number or your work location, but they cannot say that you owe money or that they work for a collection agency. Collectors may not tell others that you owe a debt.

If you have a lawyer, collectors may not contact anyone but your lawyer.

What are your rights when you dispute owing the debt?

Within five days after the debt collector’s initial contact, the collector must send you a statement of the total amount owed to the creditor. In that written correspondence, the collector must inform you what action you can take if you dispute owing the money.

If you send a letter within 30 days disputing that you owe the money, the debt collector cannot make further collection efforts until you receive proof of the debt.
If you cannot obtain an address by which to contact the collection agency in writing, you may be the target of a scam.

The debt collector cannot collect for any debt that cannot be verified. Federal law also restricts debt collectors from trying to collect any debt in dispute.

If the collection agency appears to check out but
you have no recollection of the charge, check your
credit report because you may be a victim of identity
theft.

What debt collection practices are prohibited?

Harassment and Abuse. Collectors cannot harass, oppress, or abuse you or any other person they contact. Specifically, they cannot swear at you, threaten harm to you, call you repeatedly in an attempt to annoy you, call you without disclosing their identity, or publicize your name as someone who refuses to pay debts.

Misleading Statements. Collectors cannot use any false, deceptive or misleading statements when trying to collect a debt. Specifically, they cannot misrepresent the amount you owe, make a letter look as though it is from the government or a court, imply that they are government representatives, imply that nonpayment will lead to your arrest or garnishment, or threaten to disclose false information about you to a credit bureau.

Unfair Practices. Collectors may not use unfair or unconscionable means to collect a debt. Specifically, they cannot collect any amount greater than your debt, deposit a post-dated check prematurely, deceive you into paying for collect calls, threaten to take your property unless they can legally do so, contact you by postcard or apply your payment to a debt other than the one you have indicated. How can a creditor garnish your wages or bank account?

Starting the Garnishment Process. If you don’t pay a bill, creditors can garnish your wages by suing you, then garnishing your wages or bank accounts based either on the judgment they get in court or on the default judgment they could get if you do not respond to the lawsuit. Thus, if you get a “complaint” (the document that begins a lawsuit), you should contact a lawyer to help you respond to the allegations. If you negotiate a payment plan with the creditor, be sure to put it in writing.

Protections from Garnishment. Generally, creditors cannot garnish more than 25% of your net wages, or any of your net wages if they are less than $206 per week. If you have received public assistance based on need, then creditors cannot take any of your wages for six months after you received the assistance, if you timely fill out the proper paperwork. If you deposit your public assistance in a bank account, creditors cannot garnish your account for 60 days. Finally, creditors cannot take your home, or a car, furniture, employee benefits or insurance proceeds up to certain values.

Claiming an “Exemption.” If you received public assistance, you may claim that your wages are“exempt” from garnishment by promptly returning to the creditor the “Garnishment Exemption Notice and Notice of Intent to Garnish,” which is a form the
creditor must send to you at least 10 days before garnishment begins. To claim that funds in your bank account are “exempt,” you should sign and return within 14 days to the bank (and the creditor’s attorney) the “Exemption Notice,” which is a form
the bank sends to you when they receive a Garnishment Summons from the creditor to tap your account.