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I have a long defaulted federal stafford loan, 8 years and going. Stupidly, I consolidated it in 2002, but never made payments.
Now Allied is after me demanding payment in full (52,000) and I have three more days to respond to their warning of garnishment.
I want to pay, but can only afford $200 a month.
Since the loan was consolidated, I believe that I can't rehab it.

I'm not sure what to do next. Scared to call them, I've heard too many horror stories.

I'm planning on writing them and explaining my situation and hoping for some mercy.

Also, I was fired from my old job in december and started my next one in february.
Should I request a hearing to stave off garnishment, sending in proof of my months of unemployment?

Is there any way to get them to reduce the debt?

Does anybody have any sure-fire advice. I've trolled all of the boards, but they all suggest calling and setting up rehabilition?

I'm going nuts here and don't want to make another wrong move.

Thanks for any help or advice,

elroy

Posted: Mon Jun 09, 2008 7:48 am Subject:

For starters, you do not have time to write, not to mention the fact they will not negotiate via mail.

With only 3 days to spare, you need to fax in your objection to garnishment or overnight it. You need to call them to set up a payment plan quickly or they will start the garnishment, even though you have a valid objection.

Right now your interest is running about $300 per month. You can rehab your loan even thought it has been previously been consolidated....you can even consolidate it again. Who did you consolidate thru and who holding the loan now? I need to know this to give you further options.

Posted: Mon Jun 09, 2008 8:08 am Subject:

Considering the amount involved and who you are dealing with it would be wise for you retain counsel. Has Allied been harassing you in any way as they are known for? Attorneys can drive the cost way down!

Posted: Mon Jun 09, 2008 8:13 am Subject:

Counsel will not be able to do anything for him that he cannot do himself. It also tells the CA that he has money to throw away on an attorney.

Allied student loan division is very different from the junk debt and credit division. They are a 3rd party vendor for the US DOE.

Posted: Mon Jun 09, 2008 9:58 am Subject:

SOAPLADY, what kind of form should i send in to object to garnishment? Also, do you know if I'll have any chance of getting Allied to reduce the amount. Is there a good rep at Allied to ask for?

Posted: Mon Jun 09, 2008 10:59 am Subject:

You said you had 3 days to respond to their warning of garnishment....that form should give you all the information on how to respond.

Without knowing who your the holder of the loan is, I cannot tell you if the balance will be reduced. I need to know who Allied is collecting for.

Unless this is a currently held by the DOE and you rehab or you can settle the account in full, there will be no reduction in the balance.

Posted: Mon Jun 09, 2008 1:31 pm Subject:

I don't know if my Quick Messages are going through, I apologize for repeating myself.

The Second letter I received from Allied on May 13 states:
"We are forwarding your account to our final treatment team. We will determine which involuntary process we will recommend that the Department use to collect this debt."
"The Deparment may collect debts by admin wage garnishment"
--here's where i'm confused--
"To do so, Education, after notice and an opportunity for a hearing, orders the debtor's employer to withhold 15% of the debtor's disposable earnings."
The next paragraph states that they may also collect through collection litigation.

Then it says to call their toll free number to avoid any involuntary recovery action.

Was May 13th the starting date for the 30 days that I have to request a hearing?

Since Allied is working through the DOE, maybe I can rehabilite it. But can they work a rehabilition at less that 1%?

I printed out the DOE request for hearing form. Should I also send this form to Allied?

Thanks for all of your help. If somebody has a time machine, or great tips on how to talk to Allied, I'm all ears.

Posted: Mon Jun 09, 2008 6:42 pm Subject:

You got a pre garnishment notice, not an official one. The hearing form is NA.

As the letter states, CALL THEM.

Allied is not working thru the DOE, the DOE is working thru allied.

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Consolidated Loan in Default--Allied is after me for 52,000!

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