07/31/2013 05:30 pm ET Updated Dec 06, 2017

After a Decade My Student Loans are Still Out of Control. - Ken

Huffington Post Reader Question

Dear Steve,

AES Loan disbursed Feb 2003, and Oct 2003; finished grad school December 2003; Payments were made on loan(s) until 2009.

Unemployed filed for bankruptcy Sept 29, 2004 (release Jan 24, 2005) These Pepln Private student loans were included in the bankruptcy.

Made Payments on loan(s) from Nov 2006 to Sept 2009 stopped when unemployed, July Contacted By Weltman, Weinberg and Reis (harassed and violated FDCPA), I contacted Student Loan Solutions and they settled the FDCPA case in my favor.

After this point I heard from No-one, I attempted to pay through AES website and was unable to submit payments. I also checked with National Collegiate Trust since I had received some documents from them.

I then checked the Experian Credit Report July 25, 2011 states that AES filed claim with US government creditor's statement transferred to recovery. I attempted to find out who held the loan(s) at this point and was unable to. Also contacted my bankruptcy attorney and he basically didn't want to get involved with it.

On April 22, 2013 contacted by EATON Group Attorneys LLC about this same debt. I also received a letter (dated April 21, 2103) from them stating the amount of the debt and I sent a return letter (certified return receipt) asking for Proof of Debt, I admitted no culpability and said that if it is indeed my debt that I would be more than willing in good faith to arrange for payments to settle the debt. I also added that the request for information was in accordance with the FDCPA and Financial Services Regulatory Relief Act of 2006. I received a letter from them dated May 21, 2103 and then 2 more dated June 14, 2013 listing national Collegiate Trust as the Creditor.

I sent a reply letter dated May 29, 2013 asking why I had not heard a reply from them in 4 weeks. I also told them that the best way was to contact me by written letter, that I could not receive personal phone calls at work, what kind of payment arrangement could be made for payments of $85.00, and the FDCPA etc.

After their letters from June 14, 2013 I sent them a letter on June 24, 2013 I would like to make arrangements with your firm for payments toward the debt in the amount of $95.00 per month and if that were acceptable to reply with their acceptance. I added this offer was in good faith and within my rights as a debtor in the state of Louisiana. I have received no further written communication only phone calls that are sometimes during the day which I can not answer and some at various hours usually while I am driving and not in a position to answer.

I tried calling them direct today July 30, 2013 with no result. I also called AES and they said that the company servicing the loan currently is NCO Financial Systems (I believe they are another collection company).

At this point I don't know where to turn. I have a much larger student loan with Sallie Mae that I am under BOI (based on income) terms with currently and I am up to date with that loan. I have contacted my US Senators office for assistance ( I only expect them to get me a list of agencies that can aid me in resolving this matter).

I have been employed since November 2010 with the State of Louisiana and have about $144.00 after main bills are paid (IE: mortgage, car note, car insurance, etc.). The loan(s) total is either 13,400 + 8,072 or just 13,400. The 8,072 loan is over 10 years old if that makes any difference as the Statute of Limitations for consumer debt in Louisiana is 10 years.

Who can I contact to Rehabilitate this loan (if any) or what options do I have? Should I hire an attorney to find out the information needed to make arrangements with whomever has the loan(s)? Do I contact NCO Financial Systems?

I realize I am responsible for the debt, even though in all actuality it should have been discharged in my bankruptcy because it was before the bankruptcy reform act of 2005 and I met the criteria for the Brunner Test? Does the loan originated in February 7, 2003 fall under Louisiana law for consumer debt statute of limitations?

I understand some of the complexity at work here but God sakes these people are devious and cunning no wonder the world economy collapsed because of their junk home loans and derivatives!! I have asked about filing an Adversary Proceeding connected to my bankruptcy case in 2004 but my attorney just said that it's got a cold chance in hell of getting approved. So I am here now trying t o get this in order in the least painful way possible.....HELP Please!


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Dear Ken,

Thank you so much for your question and the detail.

Rather than looking at this as one global problem I think it needs to be broken down into the smaller subcomponents, starting with the oldest to the newest.

And I'm going to assign you a bunch of homework here but before we come to a diagnosis we need to investigate the underlying symptoms.

The first issue is the pre-2005 bankruptcy. Private student loans included in that bankruptcy should have been discharged without a problem. It is not clear if any of your remaining student loan debt from that time is private or it is all federal.

To resolve if all the appropriate private student loans were properly discharged in your previous bankruptcy I think it would be a great idea if you find a local bankruptcy attorney and paid them for a consultation. Ask them to review your previous bankruptcy filling to make sure everything that should have been discharged, was.

I think you are saying the current collection companies are trying to collect on a defaulted federal student loan debt. Surprisingly, being sued over federal student loan debt is scary but people who do actually respond do emerge from the process with some pretty good outcomes. See my recent research on this here.

You clearly attempted to validate the debt the collectors are trying to go after and it does not look like you were successful. It appears the responses were vague and ambiguous.

The Consumer Financial Protection Bureau recently released five different form letters people can use for debt validation. I think they might prove useful. You can find the form letter here.

It seems a buffer between you and your creditors would be helpful as you try to dig to the bottom of all of this. You might want to look for a local attorney through the National Association of Consumer Advocates. Once you are represented by an attorney the collectors could no longer communicate with you.

Are up up for the challenge and the homework?

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