I have 3 private student loans through MYRICHUNCLE that i have defaulted on and are currently with a collection agency NCO financial systems. The principal is 70k with another 28k in fees. I am trying to figure out what my potential optioins are. I live in south carolina and I belive it is one of the Four states that do not allow wage garnishment for unsecured debt? Can they get my tax return. Will anyone consolidate these loans or negotiate a discounted settlement and then finance over an extended period of time.

Here is a link that shows good information on defaulted private student loans. I know they don't have as much power as federal student loans.
http://www.studentloanborrowerassist...e-collections/
Are you able to set up payment arrangements? Have you tried to talk to NCO or the private lender?

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The private lender will not speak to me, they just refer me to the collection agency. I do not trust the credit agency, i assume they have purchased the loans at a discount? I am reluctant to pay them anything as I do not know where the money is going?

No, student loans are not sold, only assigned third party.

Consolidating private loans.....in default, not a chance. No one will touch you. NCO will settle with you but student loan settlements are nothing like other consumer loan settlements. Generally they will only write off the collection fees.

What type of settlement would they offer? I spoke with a company called credit solutions that wants up front money and says they woulod negotiate on my behalf. Set me up on a four year term and be done. SO the origanal lender MYRICHYNCLE still owns the loans, NCO is a third party collection agency working on their behalf? Is there any possibility of them settleing for less than the balance if paid? I am up a creek with out a paddle?

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Motts

Myrichuncle went bankrupt last year and most of the loans were sold before that. American Student Assistance has most of their loans....NCO can tell you who the current owner is.

Student loans, both private and federal need to be paid directly as they cannot go thru third party debt management plans....Credit Soloutions should know that. Obviously they are looking for their commission too.

Settlements are not possible with a payment plan. You would need to settle in a lump sum up front. Plus you have to watch your SOL....even with an active payment plan, they will sue.

Sounds like credit solutions is not a viable option? NCO has lied in this case because they are claiming MYRICHUNCLE still owns the loan. Neve dealt with a collection before i imagine they will lie cheat and steal to get their money. I can not afford a settlement now, but in 12 months or so i should be able to put together something they would be willing to take. Is it reasonable to set a payment plan in the interim and then offer a settlement? What would be my best course of action at this point?

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Motts

Actually when dealing with student loans you are dealing with a different breed of collectors. They may be quoting off the paperwork as this being a Myrichuncle loan but from what I have read, all the loans have been sold off to other lenders. With a bankruptcy there may still be calling them "myrichuncle" so people dont get confused.

You will need to talk to NCO to find out they want as a payment plan. Without knowing your true balance now with accrued interest, it is hard to say. I would imagine that you have at least $400 per month in interest charges alone.

I know this is the wrong way to look at it but, I live in SC they cannot garnish my wages. Private loans cannot go after my tax return until a court jugement if im correct? Even if they do i can adjust my withholdings to make sure i do not really get much of a return. What is the down side to continuing to not pay these. besides the moral issue that i borrowed it and should? I want to pay them but it seems i am in a bind? Trying to do a cost benefit on the situation.

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Motts

They cannot garnish your wages but they can empty your bank account and lien personal property. Plus the mess they make of your credit report. They cannot go after your taxes period.

Is my savings account safe?

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Motts

A savings account is a bank account and if they get a judgement against you and a bank account garnishment, they can grab it.

If i have direct deposit on my account could they continually empty my account every time my check hits the account? Will they notify me if there is a judgement against me, or will i just wake up one day and my accounts are wiped out? Should i put my money in a safe deposit box until i get something worked out with them? Is it pretty standard for them to get acess to your bank acconnt or is that rare? Thank you

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Motts

Well you will get a summons to appear in court first to defend yourself against a judgement. After that,they can get an order to levy your bank accounts.

so he can pretty much empty his bank account before they get the order correct?