Private Student Loan in Default

[jwebster818]

My question involves collection proceedings in the State of: MA

I have a private student loan through citi bank, for which my father was the cosigner. My father passed away in 2007 at which point I did notify citi bank of his passing. I filed for bankruptcy of credit card debt, NOT student loans, in 2010. At this point, my intent was to continue paying on my student loans, but when I contacted citi bank they would not speak to me because of the bankruptcy status, insisting that they speak with the cosigner. I again informed them that my father had passed away. They made me answer a bunch of questions about his passing (which was painful to go through again) and requested a death certificate, stating that they would not speak to me until that was received. I sent them the requested death certificate. While I was waiting for them to talk to me, I received a letter from Diversified Collection Services that my loans were in default and due immediately. I struggled with DCS to make a payment arrangement, dealt with harassing and threatening phone calls. I eventually sought legal assistance, because of the manner in which I was being treated by DCS, and they agreed to a settlement because they did not want to go to court. Now my loans, if I understand correctly, will go to another collections agency. I do NOT want to deal with collections as I know that many agencies violate laws and are difficult to deal with. I would like some assistance in dealing with citi bank as I do not feel my loans should be in default- I made an effort to continue paying them but they would not communicate with me. I wrote them a letter and received no response. This is very negatively impacting my credit and I would like to resolve it as soon as possible. Even if someone has information for how to contact someone "higher up" in citi bank I would appreciate it! Thanks!

[Mr. Knowitall]

In simple terms, loans are current, in forbearance or in default. Your loans aren't current, and they're not in forbearance, so however you feel about it you appear to be stating that they are in default.

I am not sure what you expect here. You state that your loans were sent to collections and you worked out some form of deal or discount to pay off your loans. So if you want to resolve your loans, you live up to your end of the agreement and that should be that.

If your question is, how can you scrub accurate information off of your credit report, there's no good way to do that - it would defeat the purpose of credit reporting. Most of the tricks people play will only cause items to be suspended or removed for a short period of time while a challenged entry is verified.

[jwebster818]

Thank you for your response- while I understand and appreciate your reply, I still do not feel that my loans were fairly put into default status. I had no warning and was trying to make payments but citi bank would not allow me to. I did not work anything out with the collections agency because they refused to send me anything in writing and I was not paying them without a written agreement for my records. Because of their threats and harassing calls, I got a lawyer involved and removed my loans from them. I am not sure where they will go next. I am not trying to get out of paying them or forging my credit report, I just believe in ethical treatment of consumers and I do not believe citi bank has handled my loans or attempts at correspondence in this manner.

Thank you for your response- while I understand and appreciate your reply, I still do not feel that my loans were fairly put into default status. I had no warning and was trying to make payments but citi bank would not allow me to. I did not work anything out with the collections agency because they refused to send me anything in writing and I was not paying them without a written agreement for my records. Because of their threats and harassing calls, I got a lawyer involved and removed my loans from them. I am not sure where they will go next. I am not trying to get out of paying them or forging my credit report, I just believe in ethical treatment of consumers and I do not believe citi bank has handled my loans or attempts at correspondence in this manner.

[KeithDoxen]

Thank you for your response- while I understand and appreciate your reply, I still do not feel that my loans were fairly put into default status.

I agree that what happened to you was not fair. Unfortunately, the way the law is written is also often lacking in fairness. From my experience with student loans, everything the lender did was within their rights under the law. You can argue that it was unfair, lacking in regard for the consumer, etc, but there was no law preventing Citibank from placing you in default. In fact, private student loans tend to have a clause in the original promissory note that states that the lender has the right to consider the loan defaulted upon bankruptcy.

As you said in your post, these collection agencies generally don't want to go to court. It's expensive and they may actually lose money if you turn out to be judgment proof (if you have no assets they can take or no income to garnish). Because of that, you should be able to negotiate a payment plan that will be amenable to you. They will threaten you to no end, but there's only so much they can do in reality, and they know that.