When you default on a student loan, the government will usually hire debt collection agencies to collect on these loans. It’s not quite as straightforward as you might like to think, to try and get this loan to just disappear. The collection agencies are sometimes known to twist their words around to get what they want, while leaving you confused and hanging. Everyone needs to be aware of their rights and how to handle these debt collectors. Knowing this information will help you avoid many of the pitfalls associated with dealing with these companies.
Thanks to the Fair Debt Collection Practices Act (FDCPA), a Federal loan collector’s word is bound by the law. Anything they say should be taken literally, and at face value. However, always be careful when they say things that seem too good to be true, their words might be contorted to the point that you don’t understand their true intentions. Debt collectors are NOT allowed to make false claims, such as their ability to seize your house or to have you arrested. You should know that if a collector does happen to make false claims then you have the right to speak with the FDCPA and let them know of the issue. The FDCPA was set up to eliminate abusive practices in the collection of debts and to provide consumers with an avenue for disputing and obtaining validation of debt information.
Your loan from the government is a private debt that nobody can legally disclose any information on regarding the loan. This means they are prohibited from disclosing any information to 3rd parties or to immediate family members that relates to your loan, such as the amount owed. If you are represented by an attorney, then debt collectors are not allowed to have communication with you. Everything they have to say has to go through your attorney first. If you don’t have an attorney but still do not want any communication at your place of work, you can request it and they must comply. Simply submit a “Cease Communication Request” and reference it to your place of work and the collectors will have to acknowledge it.
Always know that you have the right to keep your life harassment free. Harassment includes but is not limited to: the use of profane language, any threats of violence, refusal to tell you who they are or if they call repeatedly several times in a single day. You have the right then to turn them in and put a stop to it. While the government does want the debt to be repaid, they wouldn’t have someone harass you over it. There are isolated incidents where this has happened as well, but it’s usually worked out well for the person who was harassed, thanks to the U.S. Consumer Financial Protection Bureau that was created in 2010.
With this information, you can know all of your rights and negotiate your debt in a reasonable fashion. Just remember that you aren’t allowed to be harassed, and if you are than you have the right to prosecute. You also have the right to privacy, so if they share your debt information with your employer or any 3rd party, then you can prosecute them. Last but not least, always make sure to take what a debt collector tells you as literal. If you have the ability to record the phone conversation, you should do that. They can be pretty clever in the way they word their sentences to get you in trouble, and most of them work on a commission basis or even receive bonuses for getting someone to agree and sign papers.
If this is all way too much for you to handle, then try to find a lawyer you can trust and who is reasonably priced. All communication and information has to go through them, and it will make your life a lot easier. You should reach out for help at the first sign of trouble when dealing with debt. The more you try to ignore it or pretend that it’s not a big deal, the worst it will get. The best course of action is to face it head on and work really hard to fix the situation. You’ll thank yourself in the end for being so diligent.
Lauralynn Schueckler is the Online Marketing Specialist at Advantage Credit Counseling Service. She is the author for Advantage CCS’s Blog called Dollars & Sense. Advantage Credit Counseling Service is a member of the National Foundation for Credit Counseling. Contact Advantage Credit Counseling at 866.699.2227, or visit them online at www.advantageccs.org.
Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.