Post: #26

Nuts....I was hoping to call in and basically say "look I'm about to file bankruptcy unless I can settle this debt". If I have to miss payments I guess I will...

Post: #27

Here is pusscrook's thread on debt collections
/thread-8185.html

Does anyone have info on student loans? Do they work the same way?

Post: #28

(08-08-2012 08:48 PM)houston Wrote:  Here is pusscrook's thread on debt collections
/thread-8185.html

Does anyone have info on student loans? Do they work the same way?

There's a lot of good info in that thread. The bottom line is the older the debt the lower you can settle it for but keeping your credit report clean is the way to go, especially now when credit is hard to come by.

If you don't think you need your credit or just want to run a bunch of stuff up, just plan for how long the statute of limitations is in your state and know that your credit report and score will be damaged for X number of years (typically 7).

Student loans are the same process but the collectors have a little more teeth. The statute of limitations on some student loans can be up to 20 years, definitely check your loan agreement. Also, if it's a federal government loan they can use the threat of the IRS and sieze any tax refunds you're eligible for. I know plenty of people who straight up told their student loans to fuck off and never heard anything but all the loans are federal government now so it's going to be a lot harder to blow them off. You can tell a bill collector to fuck off all day long but don't try that with the IRS unless you plan living off the grid.

Post: #29

student loans under the federal programs can not only tax your irs tax refunds but can also garnish your wages directly. they can not be wiped out under Bankruptcy either.

Post: #30

http://www.creditinfocenter.com/

This site has all the information you will ever want to know about how to defeat the bill collectors. Specific how-to-tutorials, form letters, legal citations...its really a wealth of resources.

My credit got fucked during my divorce, no surprise.

Its been steadily getting better and I have just eclipsed the three year statute of limitations for my jurisdiction. Pretty psyched.

I also went to the three credit agencies and did their validation/dispute process for each and every item on the report, we'll see what comes of that.

Post: #31

Student loans - should I contact the school and tell them I can't pay it right now? They have sent me 2 letters already and I seriusly can't pay it off.

Post: #32

Houston, you should contact them and explain your situation. Make up a good down on your luck sob story and see if they'll work with you and get your payments down to something you can afford. They may be willing to accept $50 a month or less if you're in a hardship situation. It's definitely worth a shot to speak with them and find out what your options are.

Post: #33

painter +1

I used your posts as a guideline and settled for 30% today.

Post: #34

(08-22-2012 12:40 PM)Mujeriego Wrote:  painter +1

I used your posts as a guideline and settled for 30% today.

Very nice! Low balling is the way to go. Make sure they provide you with documentation showing it's settled and keep that in your records in case it ever comes up again. Good work, it's pretty stressful dealing with bill collectors.

Post: #35

(08-08-2012 09:44 PM)painter Wrote:  

(08-08-2012 08:48 PM)houston Wrote:  Here is pusscrook's thread on debt collections
/thread-8185.html

Does anyone have info on student loans? Do they work the same way?

There's a lot of good info in that thread. The bottom line is the older the debt the lower you can settle it for but keeping your credit report clean is the way to go, especially now when credit is hard to come by.

If you don't think you need your credit or just want to run a bunch of stuff up, just plan for how long the statute of limitations is in your state and know that your credit report and score will be damaged for X number of years (typically 7).

Student loans are the same process but the collectors have a little more teeth. The statute of limitations on some student loans can be up to 20 years, definitely check your loan agreement. Also, if it's a federal government loan they can use the threat of the IRS and sieze any tax refunds you're eligible for. I know plenty of people who straight up told their student loans to fuck off and never heard anything but all the loans are federal government now so it's going to be a lot harder to blow them off. You can tell a bill collector to fuck off all day long but don't try that with the IRS unless you plan living off the grid.

For the record , that is not how defaulted student loans work with a federal guarantee. There is no such thing as "some more teeth", regardless of what collector is attempting to collect the debt. The agency collecting the debt, can use every legal avenue to collect the debt under the federal statute. So in essence they have a full set of teeth to rip your anus clean open.If they are on contract percentile formula with the DOE , you will shit in your socks until you pay , period. THe status of the loan is what you are more likely speaking of. Having said that, , there is a way to get out of a student loan debt besides permanent disability.

For the guy who settled for 30% < I am happy for you that you settled for less than you owed, but if you read carefully the original post, you sort of missed the mark by a long shot. Aimed a bit too high. The key is to understanding who bought the loan, and the age of the loan. It is a formula , not guess work and throwing out arbitrary numbers. BTW, you paying off an ancient debt means you took care of your ancient obligation, but it also means that your a risky degenerate creditor in the eyes of a banker. Your settlement status as opposed to "charged off" R9 status, is merely an indication that you have paid it off ,not that your are diligent . Please remember that the IRS will still want its share of the 20 % less(whatever the number is) you didn't pay.Guess who pays that? Bankers today are a bit smarter than that. These debts are usually ancient and only are worth paying when you want to purchase big ticked items...ie Car, house, a whore.

Post: #36

(08-22-2012 12:40 PM)Mujeriego Wrote:  painter +1

I used your posts as a guideline and settled for 30% today.

how delinquent were you and what type of debt?

Post: #37

(08-26-2012 03:05 PM)Pusscrook Wrote:  

(08-08-2012 09:44 PM)painter Wrote:  

(08-08-2012 08:48 PM)houston Wrote:  Here is pusscrook's thread on debt collections
/thread-8185.html

Does anyone have info on student loans? Do they work the same way?

There's a lot of good info in that thread. The bottom line is the older the debt the lower you can settle it for but keeping your credit report clean is the way to go, especially now when credit is hard to come by.

If you don't think you need your credit or just want to run a bunch of stuff up, just plan for how long the statute of limitations is in your state and know that your credit report and score will be damaged for X number of years (typically 7).

Student loans are the same process but the collectors have a little more teeth. The statute of limitations on some student loans can be up to 20 years, definitely check your loan agreement. Also, if it's a federal government loan they can use the threat of the IRS and sieze any tax refunds you're eligible for. I know plenty of people who straight up told their student loans to fuck off and never heard anything but all the loans are federal government now so it's going to be a lot harder to blow them off. You can tell a bill collector to fuck off all day long but don't try that with the IRS unless you plan living off the grid.

For the record , that is not how defaulted student loans work with a federal guarantee. There is no such thing as "some more teeth", regardless of what collector is attempting to collect the debt. The agency collecting the debt, can use every legal avenue to collect the debt under the federal statute. So in essence they have a full set of teeth to rip your anus clean open.If they are on contract percentile formula with the DOE , you will shit in your socks until you pay , period. THe status of the loan is what you are more likely speaking of. Having said that, , there is a way to get out of a student loan debt besides permanent disability.

For the guy who settled for 30% < I am happy for you that you settled for less than you owed, but if you read carefully the original post, you sort of missed the mark by a long shot. Aimed a bit too high. The key is to understanding who bought the loan, and the age of the loan. It is a formula , not guess work and throwing out arbitrary numbers. BTW, you paying off an ancient debt means you took care of your ancient obligation, but it also means that your a risky degenerate creditor in the eyes of a banker. Your settlement status as opposed to "charged off" R9 status, is merely an indication that you have paid it off ,not that your are diligent . Please remember that the IRS will still want its share of the 20 % less(whatever the number is) you didn't pay.Guess who pays that? Bankers today are a bit smarter than that. These debts are usually ancient and only are worth paying when you want to purchase big ticked items...ie Car, house, a whore.

Pusscrook, it sounds like you disagree with some of my advice but I’m not sure what? Student loans under federal authority are totally not the same thing as credit cards or store credit that carry ridiculous penalties and fees and trigger outrageous annual percentage rates, driving up a balance of $500 to $3500 after 180 days and becoming “charged off R9 status,” for example (just to throw out some arbitrary numbers). We agree that for student loans “they have a full set of teeth to rip your anus open...” The student loan bill collector with the IRS backing him up definitely has “some more teeth” (a lot more) compared to the collection department for Sunglass Hut.

If you know “a way to get out of student loan debt besides permanent disability...” don’t tease us with that information, give it up for the guys on here who have student loans, that shit would be gold!

As for Mujeriego’s 30% settlement, we don’t know any details except that he saved 70%, but you think he “sort of missed the mark by a long shot,” and “aimed a bit too high”? He seemed pretty psyched. Maybe he doesn’t want to play around with bill collectors for 10 years or more to get a 10% settlement. Maybe having a clean credit report is a priority for his job or an upcoming large purchase (like you mentioned). Maybe he just wanted to pay back what he owes and not a bunch of bullshit penalties and fees.

The age of the debt is obviously important but I’m not sure how “knowing who bought the loan” enters into the equation? What’s the difference between Acme Collection Agency and ABC Collections? If there’s a debt settlement formula utilizing the age of the debt and the SPECIFIC ENTITY that owns it, again, please drop that knowledge.

You say “paying off an ancient debt means you took care of your ancient obligation,” well, of course. The item remains on the credit report for seven years after being charged off (180 days without a payment), it shows a credit risk and is well established for however long without a payment, so the person is already considered “a risky degenerate DEBTOR (maybe you meant credit risk, but not creditor, the creditor is obviously whoever is extending a loan or a line of credit and the recipient of credit is the debtor).” Trust me, credit report tradelines showing closed/satisfied accounts with a zero balance are preferable to open/unsatisfied tradelines with a balance owed.

I’m not sure what you mean that “the IRS will still want it’s share of the 20% less (whatever the number is) you didn’t pay.” 20% of what? If we’re using Mujeriego’s 30% settlement do you mean the 70% he saved? If the savings is over $10,000, yes, the IRS MIGHT be provided a 1099, as would the debtor, but only if it’s with the original creditor, it wouldn't apply by the time it’s sold to a third party agency. Plus it’s illegal not to inform a debtor they’ll receive a 1099 for taking a settlement.

If you have a strategy for 10% settlements on fresh debts you should really let everyone know. I posted here to help guys on the forum who have zero experience dealing with bill collectors get the lowest settlement possible. Drop your knowledge or have some specific, logical criticism, but don’t piss on a thread that’s meant to be a forum resource without any solutions, especially if you're going to confuse basic terms like CREDITOR with DEBTOR.

Post: #38

(08-26-2012 08:24 PM)Brian Wrote:  

(08-22-2012 12:40 PM)Mujeriego Wrote:  painter +1

I used your posts as a guideline and settled for 30% today.

how delinquent were you and what type of debt?

It was credit card debt. I was about a year delinquent. Part of me wanted to hold out for a better deal but I made it a goal to have my financial house in order within a year.

Post: #39

dang. If I was a U.S citizen and planning to live abroad after graduation, I would get a loan for tuition and living expenses and then just move after that.......

Post: #40

(08-13-2012 10:57 AM)painter Wrote:  Houston, you should contact them and explain your situation. Make up a good down on your luck sob story and see if they'll work with you and get your payments down to something you can afford. They may be willing to accept $50 a month or less if you're in a hardship situation. It's definitely worth a shot to speak with them and find out what your options are.

It was easy. I called the department and set up a payment plan. He basically told me as long as they see I'm attempting to make some sort of payment every month, collections won't ever fuck with it.

Post: #41

(08-13-2012 04:14 AM)houston Wrote:  Student loans - should I contact the school and tell them I can't pay it right now? They have sent me 2 letters already and I seriusly can't pay it off.

Do they offer income-based repayment?

Post: #42

(08-30-2012 01:14 AM)houston Wrote:  

(08-13-2012 10:57 AM)painter Wrote:  Houston, you should contact them and explain your situation. Make up a good down on your luck sob story and see if they'll work with you and get your payments down to something you can afford. They may be willing to accept $50 a month or less if you're in a hardship situation. It's definitely worth a shot to speak with them and find out what your options are.

It was easy. I called the department and set up a payment plan. He basically told me as long as they see I'm attempting to make some sort of payment every month, collections won't ever fuck with it.

Yeah man, that's sweet. You can pay a minimum amount and they will keep you in good standing! Excellent intel for the guys on here with student loans. Instead of hiding from it you confronted it head on and now you're in the drivers seat, good job and glad to hear it's that easy

Post: #43

Awesome thread.

Right now I'm diligently paying off my $40,000 in student loans and my car lease. That sucks up more money every month than rent, food and other expenses.

One unresolved issue is the $9000 in credit card debt I accumulated during tough times. I haven't made a payment on that since March (So it's probably charged off by now). From your experience, what is the best way I should approach getting a settlement?

One thing that I think strengthens my negotiating position is that I'm self-employed, get paid through PayPal, am leasing a car, and rent on a month to month basis. In other words, if they were to sue me, I don't see how they could collect on a judgement: I have no wages to garnish or assets to seize.

My permanent address is in Michigan, so the statute of limitations is still three years away

Post: #44

redacted

Post: #45

How much will your credit score drop if you never pay off a credit card?

Post: #46

For those of you who have desires to be large scale real estate investors I'd strongly recommend against doing this. Those that pay off there credit cards on time get ridiculous rates on credit. So low that borrowing money is at a lower rate than inflation which means you essentially get free money. (I..e you can get a line of credit at 2%)

How are so many guys having problems paying off your credit cards. Too many people are buying stuff they can't afford. I see this is especially true amongst people I know who buy cars way beyond their pay grade. The easy answer is, if your having problems with credit cards and spending too much. Get rid of your credit cards. Live with the cash you have. Yes, I have sympathy for the few who have real problems that prevent them from paying but for those who buy too much, its easy to stop doing this.

Personally, I keep one credit card and put an enforced limit of 1000 a month on it. That way I'm in control of my spending and limited. In part the credit debt people has is the banks fault for letting people get way more credit than they should be entitled to.

Post: #47

"One unresolved issue is the $9000 in credit card debt I accumulated during tough times. I haven't made a payment on that since March (So it's probably charged off by now). From your experience, what is the best way I should approach getting a settlement?"

Caligula89 - The charge off date is 180 days since the first missed payment so figure it was in August. "Charge Off" means they can't add any more fees or penalties so whatever the amount is now they can't add anything unless they sue you and win, then they can only add attorney fees and court costs to the total. Your credit report is getting dinged every month you don't make a payment but that's not really fatal. Is the original creditor still contacting you? They're probably on the verge of selling your debt to debt buyers now if they haven't already as it's the end of the year and closing out accounts is important for their bottom line. The odds of the original creditor or whoever buys it actually taking you to court are close to zero unless they are located in the state you got the account in (Michigan) and then it's possible but still not very likely so I wouldn't stress out about getting sued at all.

Find out who has your account, I'm sure they're calling and sending letters. The original creditor or the collection agency does have leverage on you during the three year statute of limitations but unless they have a proven record of actually suing debtors it's illegal for them to threaten you with a lawsuit. Find out who has your debt. Come up with a sad sack story (you lost your job, got injured in a car accident, went to jail, etc, just make it believable, not too over the top) and call them up. Give them your story, tell them you want to take care of it and offer 10% - 15% of the total. They will come back at you at like 75% - 80%. Negotiate in tiny increments, say, maybe I can do 18% (use the actual dollar amount, not the percentage when you talk to them, have a calculator handy). Keep going back and forth with them until their bottom line is clear. If it's too high for you don't do it, wait a month or two and try again. If it's low enough take it. If it's close to what you can afford tell them you might be able to get help to pay it from a friend or family member but you'll have to ask. Wait a couple days, call back and offer something close but still under what they said they'll go for. Do this towards the end of the month when the agencies are willing to go to the basement on settlements.

Your debt is pretty fresh but with a good strategy you can probably get down somewhere between 40% - 50%. Lower than that is possible too if you negotiate right but like I said, it's still pretty fresh and they'll try to railroad you into the full balance or a real high settlement. Remember start low, raise your offer in tiny increments, see how low you can get them to come and if it's too high don't take it. Don't be confrontational, get them on your side with your down-on-your-luck-story and friendly attitude, if they think you're going to pay they will work with you even if it's lower than they really want to go and you can string them along.

Since this thread started I wound up writing an ebook which covers everything you need to know about collections, I hope nobody minds if I plug it here: http://www.amazon.com/Beat-The-Bill-Coll...B009PPKDVW

The strategy in the book is a bit more detailed with an example and gives some good tips on negotiating. If you want, PM me with your specifics and I can help tailor a strategy for you. If you read the book you may decide to take another option presented there depending on your situation but settling is best if you want to keep your credit in good standing.

The bottom line is you're not going to be paying anywhere near $9000, more likely it'll be between $2500 (really good) and $4500 (good).

Post: #48

(12-11-2012 12:32 AM)houston Wrote:  How much will your credit score drop if you never pay off a credit card?

Houston, it's hard to say. The formula the credit rating agencies use is a secret. It does hurt you but it depends on the amount owed, how long it's been, who has the debt and whether it's still being updated. Once they sell your account it doesn't usually get updated anymore. It doesn't matter how long the statute of limitations is in your state, the account will be on your credit report for seven years then "fall off" and no longer affects your credit rating. I posted the link to my ebook which covers this scenario as well as how to fix your credit, reading your credit report, and how to get the reporting agencies to update your report in the previous post. It's not expensive, has all the relevant resources you need and it's a pretty good read if you ever wondered what it's like to be a bill collector.

Edit: As West Indian Archie pointed out, Texas is a great state to owe money in. In the collection industry we used to call it a "debtor state" because you can't garnish wages etc. That being said, don't write a fraudulent check in Texas, they have very tough "bad check" laws and you can wind up in jail and having to pay a heavy fine.

Post: #49

Painter, I'm moving to North Carolina in a couple weeks where they apparently cannot garnish my wages and where the statute of limitations is only 3 years. When I'm negotiating with them, should I mention that I live in a state where they really can't get anything from me if they took me to court?

I was basically thinking about saying something like this.

"Look, I don't have any wages to garnish or assets to seize. I live in North Carolina, so you cannot throw me in jail. Basically suing me will be a waste of time. You've already ruined my credit, and paying you back right now will not help it. So frankly I have no real reason to pay you back right now, unless you give me a really good settlement. If you want any money to cover your costs, you should take what I'm offering...I'll offer you 10%."

Post: #50

Don't mention anything like that, it will only antagonize them into playing hard ball. You want to frame it like this: I'm a nice guy in a horrible situation with not a lot of money who really wants to take care of this. That's why you want a sad sack/down on your luck story that's believable. You want them working for you, not trying to screw you. If they think they might get something rather than nothing they will bend the rules and accept a low ball settlement but only if you come off as somebody who "deserves" a break. If you antagonize them they won't be inclined to work with you.

The bill collector is on a power trip, even though what you want to tell them is perectly legit that will only piss them off and then there goes your low ball settlement with that agency. Start by offering 10% and go up in small increments until their bottom line is clear. If it's too much don't take it and try again in another month or two. The older the bill gets the more incentive they have to settle.