What is the name of your state? Missouri
One of my patients got a contact the other day from a collection agency named Pioneer. They let him know that hes loan was in default and they were at the last stage before they start to garnish his wages. He paniced. He called them back and they gave him some sort of offer that would let him make payments of $250 a month for 9 months to avoid this. Also at the end of the 9 months, hes defaulted school loan would drop off of his credit report and a new payment plan would be set up with an independent loan company.
1. Does this sounds about right?
2. He told me hes gotten this type of call before over the years regarding this situation and they never garnish him. According to him, they stated that he had 24 hours to decide before they proceeded. Can you garnish him? Stating as high as 15% of his wages.
3. The offer they made to him, what exactly happens at the end of the 9 months? He is mainly concerned that after the 9 months he is locked into paying $250 a month which he really can't afford that he will be stuck in the same amount for years just to fall back into the same situation. He was told the rate would drop dramatically but no amount was given for after the 9 months.
4. Can a bankruptcy help him with this issue?
5. Is there any legal thing that he can do such a hardship to stop possible garnishments or deal with his large school loan.
6. Finally, this one I'm really curious about, collectors that make offers such as stating only paying half of the acutal bill will close the books. How can they do that and is that legal?