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Debt Consolidation Forums Student Loans and Education Debt forums

I'm OK with garnishment, why rehabilitate?

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My wages are being garnished by Allied Interstate for a defaulted federal student loan. They called me and offered a rehabilitation arrangement that will essentially halve the amount I pay each month. This seems strange to me. Why do they want LESS money each month?

The Borrower Acknowledgement Form that I am to sign and return states that "I understand and agree the lender may capitalize collection cost of 18.5% of the outstanding principal and accrued interest upon rehab..."

I guess my question is this: Would I pay less money if I just let the garnishment continue as is?

I realize it is beneficial to my credit to rehabilitate but let us put that aside for now. Do they prefer that I agree to a rehabilitation arrangement because they profit MORE? I'm quite certain this company does not care about me so why do they want 50% of what they are getting already?

The collection agencies job is to get you out of default, either by consolidation or rehab. It will help your credit by helping your rebuild it.
Once the rehab is done and funded, apply for a Direct Loan Consolidation. You regain deferment/forebearances priveleges. Plus you wont have your income tax return seized.

Sub: #1 posted on Wed, 11/07/2012 - 21:45

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Thank you for your response, perhaps you could answer one more concern I have...

I was told by the collection agent that once I returned the signed rehabilitation form they would send a request to my employer to lower the garnishment percentage. He said he could not completely stop the garnishment but lower it to 1%.

Is it true that the garnishment cannot be stopped once in rehab?

How can I be sure he will keep his word and contact my employer to lower the garnishment?

Sub: #2 posted on Thu, 11/08/2012 - 06:10

sdraper.mail sdraper.mail

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