Collection agencies

[Vinny1]

I have a friend that owed $40,000 with interest in student loans to Sallie Mae for going to a cooking school in Manhattan. He decided to just stop paying the loan one day. He got a few letters and phone calls from Sallie Mae and then they gave up trying to collect and just sold the loan to some collection agency in Buffalo. My friend just refused to pay a dime to Sallie Mae. The collection agency in Buffalo sent him a letter offering to settle for $11,000, a $29,000 reduction from what he owed to Sallie Mae. He refused to pay that too. It has been a couple of years since he first received that letter from the collection agency in Buffalo and they have not taken him to court.

My 4 questions are...

1) Can a collection agency sue you in court for a student loan or any other kind of debt that you owe?

2) Can a collection agency seize assets that you have like a home, car, or bank and brokerage account to pay off debts or can they only garnish your wages?

3) If you are self-employed, how would they be able to garnish your wages?

4) Can a collection agency garnish social security income, disability income, or unemployment compensation?

 

[morganist]

Quote from Vinny1:

I have a friend that owed $40,000 with interest in student loans to Sallie Mae for going to a cooking school in Manhattan. He decided to just stop paying the loan one day. He got a few letters and phone calls from Sallie Mae and then they gave up trying to collect and just sold the loan to some collection agency in Buffalo. My friend just refused to pay a dime to Sallie Mae. The collection agency in Buffalo sent him a letter offering to settle for $11,000, a $29,000 reduction from what he owed to Sallie Mae. He refused to pay that too. It has been a couple of years since he first received that letter from the collection agency in Buffalo and they have not taken him to court.

My 4 questions are...

1) Can a collection agency sue you in court for a student loan or any other kind of debt that you owe?

2) Can a collection agency seize assets that you have like a home, car, or bank and brokerage account to pay off debts or can they only garnish your wages?

3) If you are self-employed, how would they be able to garnish your wages?

4) Can a collection agency garnish social security income, disability income, or unemployment compensation?

In England and I assume America.

1.) Yes.

2.) Yes. In relation to wages they can apply for an attachment of earnings order.

3.) I don't know but they may be able to get into your bank account.

4.) Probably not. But possibly.

 

[JamesL]

Quote from Vinny1:

I have a friend that owed $40,000 with interest in student loans to Sallie Mae for going to a cooking school in Manhattan. He decided to just stop paying the loan one day. He got a few letters and phone calls from Sallie Mae and then they gave up trying to collect and just sold the loan to some collection agency in Buffalo. My friend just refused to pay a dime to Sallie Mae. The collection agency in Buffalo sent him a letter offering to settle for $11,000, a $29,000 reduction from what he owed to Sallie Mae. He refused to pay that too. It has been a couple of years since he first received that letter from the collection agency in Buffalo and they have not taken him to court.

My 4 questions are...

1) Can a collection agency sue you in court for a student loan or any other kind of debt that you owe?

2) Can a collection agency seize assets that you have like a home, car, or bank and brokerage account to pay off debts or can they only garnish your wages?

3) If you are self-employed, how would they be able to garnish your wages?

4) Can a collection agency garnish social security income, disability income, or unemployment compensation?

1 - yes

2 - yes with court order, think repossession or foreclosure

3 - lean on assets, like bank accounts where you would deposit your wages

4 - "Creditors typically can't garnish welfare, Social Security, unemployment, pension or disability checks." reference

 

[southbeach4me]

The Dept of Education can and has in the past used the process of wage garnishment(they take money right out of your paycheck), they can also raise his income taxes to start getting that money back, they can initiate seizure of income tax refunds, and most damaging is his credit is ruined for years until the loan is paid back. The fact that your friend is not even trying to pay back the loan will show up on his credit report and stay on there for a long time. Nobody will want to finance him for a car, house, NOTHING.

Your friend is an irresponsible idiot. We the tax payers loaned him that money. Now he's looking for a free ride by not paying? He should be shot in public in front of us tax payers!!

Your friend should have taken the smaller settlement amt. He's only making it worse for himself. Hes gonna pay a heavy price for it in the future. He deserves it.

 

[Vinny1]

Quote from JamesL:

1 - yes

2 - yes with court order, think repossession or foreclosure

3 - lean on assets, like bank accounts where you would deposit your wages

4 - "Creditors typically can't garnish welfare, Social Security, unemployment, pension or disability checks." reference

Regarding your answers to questions 2 and 3, are you sure a collection agency or creditor can seize your home, car, or bank account to pay off student loans or credit card bills?

 

[LeeD]

Quote from southbeach4me:

Nobody will want to finance him for a car, house, NOTHING.

Your friend is an irresponsible idiot. We the tax payers loaned him that money. Now he's looking for a free ride by not paying? He should be shot in public in front of us tax payers!!

Your friend should have taken the smaller settlement amt. He's only making it worse for himself. Hes gonna pay a heavy price for it in the future. He deserves it.

The guy may be irresponsible but he doesn't look an idiot to me. Perhaps, he tries to live in the real world where people can afford to buy things without a loan.

 

[ron2368]

They go to court, get a judgement $ against you, present that to sheriff dept, they can go to your house with escort and take things you own. Might be different to some degree state by state.

 

[LeeD]

Quote from ron2368:

They go to court, get a judgement $ against you, present that to sheriff dept, they can go to your house with escort and take things you own. Might be different to some degree state by state.

True! At least, they won't take the house itself.

They also can't obtain a court order in a one-sided manner. So, the debtor would receive an advance notification of any such court hearing...

In Spain it can get much more fun before lawyers get involved:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aYwdiKhA5fU4
http://www.spanishvida.com/2010/02/...ectors-use-public-shaming-to-extract-payment/
http://uk.reuters.com/article/2008/08/21/spain-debtors-idUKARO13750320080821

 

[Vinny1]

Quote from southbeach4me:

The Dept of Education can and has in the past used the process of wage garnishment(they take money right out of your paycheck), they can also raise his income taxes to start getting that money back, they can initiate seizure of income tax refunds, and most damaging is his credit is ruined for years until the loan is paid back. The fact that your friend is not even trying to pay back the loan will show up on his credit report and stay on there for a long time. Nobody will want to finance him for a car, house, NOTHING.

Your friend is an irresponsible idiot. We the tax payers loaned him that money. Now he's looking for a free ride by not paying? He should be shot in public in front of us tax payers!!

Your friend should have taken the smaller settlement amt. He's only making it worse for himself. Hes gonna pay a heavy price for it in the future. He deserves it.

I guess my friend doesn't have to worry about getting a loan, since he lives with his mom in her house and his mom gave him her used car, which is paid off. He doesn't work, except for some occasional cash only side jobs, which he doesn't deposit into a bank account. He is a creditor's worst nightmare.

When his mom passes away, he will be inheriting her house and whatever money she has in her bank account. Would a collection agency be able to seize the house or bank account then, or is there a statute of limitations that a collection agency can try to collect on a student loan debt?

Is there a statute of limitations that a collection agency can try to collect on credit card debt?

 

[high99]

Quote from Vinny1:

I have a friend that owed $40,000 with interest in student loans to Sallie Mae for going to a cooking school in Manhattan. He decided to just stop paying the loan one day. He got a few letters and phone calls from Sallie Mae and then they gave up trying to collect and just sold the loan to some collection agency in Buffalo. My friend just refused to pay a dime to Sallie Mae. The collection agency in Buffalo sent him a letter offering to settle for $11,000, a $29,000 reduction from what he owed to Sallie Mae. He refused to pay that too. It has been a couple of years since he first received that letter from the collection agency in Buffalo and they have not taken him to court.

My 4 questions are...

1) Can a collection agency sue you in court for a student loan or any other kind of debt that you owe?

2) Can a collection agency seize assets that you have like a home, car, or bank and brokerage account to pay off debts or can they only garnish your wages?

3) If you are self-employed, how would they be able to garnish your wages?

4) Can a collection agency garnish social security income, disability income, or unemployment compensation?

1.) Yes. But typically the statute of limitations runs out after 6 years on a written contract loan. They can sue, but you must answer and your defence is the statute expiration. The suit is then over.

2.) Only after they sue and win the judgement. No judgement, no asset seizures. You must answer the suit or they win a default judgement. Fight like crazy and deny everything.

3.) They can't. Nobody to garnish them from since you have no wages.

4.) No. These are exempt per state law. They are also exempt
in bankruptcy court. No can take.

Actually, since it is in collections he is better off. These debt buyers don't have jack shit that proves they own the debt. They bluff their way to get some sort of payment. Don't even talk to them. They buy the debt for 3 cents on the dollar and then try to scare you. Fuck 'em.