please help re: Allied interstate and default student loan

Interest will not stop on the unpaid balance until the last penny is paid. In the case of student loans, the guarantor is charging the interest and is maintaining the account info and balance, not the CA. Also...what type of loan is this? SLM originates both federal and private student loans....sounds like a private loan since there is a cosignor.

At this time, student loans are non dischargable in bankruptcy.

Who was the student?

my wife was the student... and yes private. can they jsut take money form her account?

Take as in freeze or levy a bank account? Since this is private, both you wife and mil would have to be sued first. And SLM does actively sue.

if we attempt to send them money w/o an agreement as a show ofgood faith does that help us? what do you recomend? she is currently a full time student and we're not sure why this didn't get deferred.

No such thing as good faith when it comes to private loans.

Was she out of school for a period of time? Or continuous enrollment? If she left school or changed schools, she may not have been eligible for additional deferments. Or she didnt do the correct paperwork for deferment....these would be seperate from federals.

Soaplady,

I am dealing with Allied on a private student laon through Sallie Mae. Do I or do I not have to pay a downpayment prior to making monthly payments?

SInce this is a private loan, they can ask for anything they want. There are no governemnt regs surrounding this type of loan.

If I am able to make the monthly payments but not the down payment, what are they likely to do? They are saying that they will garnish wages. Also, are they allowed to pull up my credit report without my permission? And if not, how should that be addressed? Is it worth mentioning in the long run or should I just let it go?

Yes they can pull your credit report...it is totally legal since you owe a debt...it is permissible purpose .

With private loans, even if you are making payments, they are still likely to sue. If you dont agree to their terms, they are likely to sue quicker and initiate garnishment proceedings. This is world of private student loans.

I hate to sound so dumb, but I want to make sure I am understanding what you're telling me. Although I can make the monthly payments I cannot come up with the $1500 down payment. Are you saying that they will very likely sue for that amount and then garnish wages?

Can individuals fight wage garnishment? I was told that there is a form that can be obtained through legal aid called "stop garnishment" (not sure if that is the correct wording).

What happens if they do decide to sue? Will I have to go to court?

Thank you for your help!

Private loans sue as a matter of business practices on almost all defaults even if the borrower is in repayment. You agreed to balance in full on demand if you defaulted on the loan and they are within their legal right to set the terms. Private loans do not have the same protections as federal student loans.

To garnish you, they would have to sue you first. You will receive a summons which you would have to answer and then yes, you would have to go to court. That would be the time to tell the court that you have tried to pay or are paying. They will still get their judgment but your best bet is to ask for a contingency judgment, one that allows you to pay an amount and as long as you pay, further legal action will not happen. However if you miss a payment, garnishment will kick in pretty quick.

I do not believe there is form that will stop a garnishment. You would have to appeal thru the courts to have it reduced or stopped.

Dear Soap Lady,

I am an AmeriCorps volunteer and am paid a living stipend. One student loan is in deferrement through AmeriCorps, but the other loan didn't get deferred because it had gone into default two months before being accepted into their program.

I got a letter from Allied Interstate and the very day I received the letter I called to find out what was happening (I didn't realize my loan had defaulted). The gentleman with whom I spoke told me I needed to speak to the Dept of Education. I gave the information to the AmeriCorps liason in charge of deferring the loans, and now she has given it back to me.

It has only been a couple weeks and I have begun getting phone calls at work from Allied Interstate. They have not left any messages on my voice mail, but the secretary said the man calling is very rude to her and keeps demanding that she give me the message to call. I have missed calls from an 866 prefix on my cell phone, and because I don't know the number I don't answer, and the caller never leaves a message. When she gave me the message with the phone number I now know that this is the same person.

I googled the company and have read several pages of this forum. I would like to call and have a little information under my belt before I call (and I would also like to first speak with the Dept of Ed).

Do you know if a living stipend can be affected? If my loan went into default in May while I was still unemployed, can I retroactively go back into deferrment and have my loan leave Allied? I was laid off from my job July 2009 and my degree conferred October 2009.

I would just like to feel a little better armoured before I start making all these calls. This isn't my strong suit. Thank you for any advice you can give.

The Department of Ed wont talk to you....your loan has been in default for too long.

You stipend would be subject to garnishment like any other federal payment.

Hi SOAPLADY.

I am speaking with Allied Interstate in regards to my defaulted federal student loan. I am willing to do the 9 month program which you say results in monthly payments of around 1% of the loan balance. For this loan would they require a larger than 1% downpayment? Or would I be able to agree to the monthly payments?

Thank you!

They can ask for a downpayment, but they cannot make it a condition of a rehab. There is nothing in the Higher Education Act that requires it.