Should I try to negotiate with the collections agency myself for my defaulted Private Student Loans? Or should I hire an attorney? Anyone had any luck negotiating by themselves? At this point I think I’m basically judgement proof or close to it. I owe way more than I make and am currently unemployed! Advice? Thanks.
I just called McCarthy Law, at the suggestion of a post somewhere on this site. I am hopeful after speaking with them. I had talked to another firm a few years ago but was afraid of getting scammed. I have not decided what to do yet, but at least they gave me some other options.
Thank you, I contacted them. I hope they can give me better results. Clearly the collection agency doesn’t want to negotiate reasonably. They are convinced I have rich relatives that can provide me with $18k! I wish!
If you are judgement proof, you have a lot of leverage. Don’t be intimidated and hold your ground. Negotiate aggressively. It might not work, but it won’t hurt.
How old is the debt? You should be aware of the statute of limitations (SOL), although it can sometimes be hard to determine which state’s SOL apply in each case (is it where the loan originated, the state you lived in when the loan originated, or the state you live in now? The answer depends on a lot of factors and it can be hard to tell).
One trick that you should be aware of and be on the lookout for is that private lenders will try to get you to make some payment of some kind of any amount, even if it is just $1, because as soon as you make a payment the clock on the statute of limitations starts over and they have another X number of years within which they could bring a judgement against you. So don’t agree to make any payment unless you get a settlement in writing and it clearly states the the payment will settle the account in full, the debt will never be reported to a credit reporting agency, and they will consider the account satisfied.
I have contacted McCarthy Law and met with a lawyer from their law firm. And while I will still be paying monthly, I was told it will be over in 3.5 years and my payments will be less than a debt settlement company and less than they were when I was still paying on them. We discussed the possibility of waiting them out but I feel it’s too risky as I am 2.5 years from statute of limitations. As far as being judgement proof (which i now know that’s a tenuous position) i probably won’t stay that way for long as i am seeking employment. It’s not the resolution i would have liked but it’s a light at the end of the tunnel. I think what’s really awful is that it’s not a solution everyone can take advantage of, some people really are maxed out on their budget. Let’s hope that our next election puts someone in office who will do something about it. Note for people going the settlement route with a lawyer, I advise against any lawyer that is gonna demand a lot upfront and then charges a fee based on what they negotiate off of the balance, cuz that can get real expensive real fast. My lawyer is charging $375 to get started and then it’s a flat fee worked into the monthly payment. Some lawyers were looking for $2k or more just to start! Let’s all make our voices heard in 2020, vote!
Thanks for the update.
A lot of how we struggle with debt is trying to find the least bad of several bad options. I’m glad that you seem to have been able to get a settlement that is at least better than the other options you had.
But you are absolutely right that we need to win actually good options and it will take a mass movement and political action to win it. We’re getting organized here: Organizing to win College For All