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  1. #1

    Default Defaulted with a Personal Student Loan from Sallie Mae

    My question involves collection proceedings in the State of: Texas.

    I took out a personal student loan through Sallie Mae and it recently has gone into default. With it already being a stressful situation, the collection agency kept calling my parents house looking for me, in which I had to return the calls and inform them I no longer live there. They have my correct number and address now. Just recently, my husband and I finally agreed to pay a low rate for 3 months, but the amount will go up after that and we're certain we won't be able to afford it. I'm worried that after that, the calls will start up again and they will keep pestering my parents' phone. Is there any law that can prevent them from contacting them? Also, will I be sued if I can no longer pay after the 3 months? And if I am sued and they win the case, how will they get the money from me? I am so stressed out about this. My husband works but I don't. I've been looking for work but haven't been lucky yet. I just don't know what to do and would like some information. Thanks in advance!

    Also, I just wanted to add that when I spoke to them, I told them they could go ahead and garnish our tax refund but they said they don't do that because it's a private loan. So if a tax refunds can't be garnished, what other option is there? And I thought they COULD be garnished??

  2. #2

    Default Re: Defaulted with a Personal Student Loan from Sallie Mae

    Now that they have your updated contact information they are not likely to continue to call your parents' house. As I recall, creditors can call a relative's house in order to attempt to locate the debtor, but can only do so once and cannot divulge any information about the reason for the call. Some sleazy collection agencies call parents, etc, on purpose in order to scare debtors into calling them back. Sallie Mae probably won't do this but if they do it is a violation of consumer protection laws I believe.

    As for what they can do to you, it sounds like you are in default. That means that, yes, they can sue you at any time. They could sue you right now. If they sue you and get a judgment, they have the power to collect what you owe them by claiming all unprotected assets up to the point that the judgment is satisfied. Your state will have in its laws a list of protected assets that creditors can't touch. These are usually basics in order to prevent debtors from ending up on the street. Luckily, you live in Texas, which means that your wages cannot be garnished for most debts including private student loans. If these student loans were backed by the government though they could garnish in any state regardless of state law.

    One thing I would watch out for is bank accounts. If they sue and get a judgment, the first thing that creditors will often do is freeze and clean out your bank account. It's a low hanging fruit and leaves a lot of debtors surprised when their savings disappears overnight.

    I would just add that a lot of creditors threaten to sue but never do. If you seem to be devoid of assets they might file you away and revisit the prospect of suing down the road. They'll keep calling and threatening but they don't want to lose even more money than they already have.

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