United States Department Of Education Selling contracts without authorization to 3rd party collections, such as NCO Financial Greenville Texas

Steve pretty much has everything nailed. But just to give some clarification on Student Loans and Bankruptcies. Depending on how accurate you are in your "10 years" your student loan may not have been discharged in bankruptcy.

Up until 1998 Student Loans were dischargeable in bankruptcy, so if your BK Declaration shows that it was included and discharged then that is all you need to send to NCO and they will stop contacting you about the loan.

Oct 1998 to Sept 2005: Government loans were no longer dischargeable, but Private Student Loans still were.
Oct 2005 - Current: Student loans are no longer dischargable, private or government unless you can prove extream hardship.

One final thought...YOU took out the loan, and yes a loan is something you are expected to pay back. Just because it is the government does not mean that you don't have to pay them. They also have programs such as forbarance and deferment for people who have periods of hardship. But it does NOT get you out of the loan, unless you do something like declare bankruptcy and claim extream hardship.

Hope this helps.

The US Dept of Ed does not sell their loans. They merely contract collection agencies to collect for them.

US Dept of Ed Student loans after a certain year (well before 10 years ago) cannot be discharged in bankruptcy. You can find the exact date on their website.

Any income tax refunds you may get from here on out will be taken by the Dept of Ed (if they aren't already).

If the collection agency determines you are being difficult and probably will not pay your loan, the loan will revert back to the US Dept of Ed for garnishment.

Once a loan goes into default (years ago), a 25% default fee is automatically added to your balance. This is probably stated in your loan paperwork. Then your loan continues to accrue interest with the default fee added. Over 10 years, I would guess the amount you owe has probably doubled from the original loan, right? Mine did.

Yes, any payments you make go towards the fees and interest before principal. It doesn't matter because the interest is charged on the entire amount. The good thing is that with any payments you make that go towards interest, you get the IRS form at the end of the year showing the student loan interest paid.

If you don't pay the loan, they will eventually get you through wage garnishment or income taxes.

Here is a tip, what I found from my loans. I don't know if they made an error in my case, but here is what happened. Had a entered into a repayment agreement with the collection agency, it would have been re-listed on my credit report as a new student loan debt. New agreement = new debt. Luckily, I did not do that since the collection agency wanted $1800 per month as a payment agreement (on a $10,000 loan).

US Dept of Ed ended up garnishing my wages instead, but the wage garnishment was never reported to the credit bureaus. The old debt had fallen off the reports because it was more than 7 years old. The wage garnishment was not reported probably because I didn't enter into a new "agreement". I don't really know why.

Today, I am student loan debt free and feel as though a giant weight has been lifted.

By the way, all this info above was how it worked in 2004.

The Bankruptcy paper work should specifically state what debts were discharged. If the student loans are mentioned all you need to do is send a copy of them to the collection agency. Make sure you send this certified. If they try to cxontact you afte that request they don't and if they continue to you then have the legal basis to report them.

If your paperwork does not discharge the student loans then you are probably libel for the amounts.

After not being contacted for over 10 years on student loans that I had believed were discharged in bankruptcy, I received a letter from NCO Financial, concerning the loans.
>>If you have your BK paperwork with Dept of Ed listed, that is all you need. Keep in mind that there is no Statute of Limitations on Dept of Ed loan collections.

Naturally I demanded verification of a contract between myself and NCO Financial, but they have failed to respond within the 30 days as required by law.
>>A frivolous request under the law. You do not have to have a contract with NCO for them to collect for someone else.

Upon further research, it seems the US Department of Education has a habit of selling uncollected Government student loans to these 3rd party parasites. Yet no were in my original contract does it allow for this to happen. Therefore I believe we have a breach of contract.
>>Anyone can sell a debt, or assign its collection to anyone they choose. It does not have to be in your original contract, but usually is anyway. Read it again.

One of the questions I sent to US dept of ed over the years, concerned a fee that was listed on one of my applications. The fee was for insurance. What insurance, and who was the benificary of said insurance? I never got an answer from US Dept of Ed concerning this. It makes me believe that someone is involved in an insurance fraud, and it might be the US Dept of Ed.
>>You should have gotten clarification on this when you got the loan, not years later. Especially if it was after your default on the loan.

But back on topic, Selling our contracts and debt to 3rd party collections agencies, that then tack on another 5 to 30 percent for collections fees.
>>The only legitimate problem here is the alleged collections fees. A collection agency and/or junk debt buyer can ONLY charge the actual amount of default along with interest as regulated by law. "Collections fees" are ILLEGAL. An agency can charge a creditor a collection fee, but that fee comes out of their end and can never be passed on to the debtor/consumer.

Why should any of us, who are experiancing financial hardship have to deal with parasitic personages like NCO?
>>You don't. Just send a CEASE COMMUNICATIONS request as per your rights under the FDCPA. Send it by certified mail/RRR.

Under the Fair credit and collections act, We are required to deal with the original creditor, NOT a 3rd party parasite like NCO.
>>No such act. It is the Fair Debt Collections Practices Act [FDCPA].

I also found out that some of these loans are growing at a HIGHER rate than some people can afford to pay them back. Monies sent in,even if a small amount is NEVER paid on the principal, so one can get the amount of interest being accrued to be lower. Instead, they first apply the amount to cost of collection, then interest, THEN principal. So if you make 48 payments of 50 dollars a month and that doesn't even cover the cost of collection and interest, then all you end up paying over that 4 year period is interest! WHEN DOES IT END?! If you cannot discharge these in bankruptcy, you have become a FINANCIAL SLAVE to the government, who will hound you until you either disappear or die! How UN-American can this get?
>>There is NO cost of collection. You have bad information. If they are charging a "collection fee", you need to file a written complaint with the FTC, and the consumer protection office in your state. It is illegal. Even the interest rate is regulated and last time I checked, I believe it was 8% APR.

If US Dept of Ed refuses to deal with us, it is the same (I believe) as refusing payment, and that invalidates their claim.
>>Wrong again.

Its time we the people stop dancing to US Dept of Ed's sloppy Fox Trot, and make them start dancing to OUR Tune. After all, they work for us, and get their paychecks from OUR tax dollars.
>>If Dept of Ed actually sold the debt, they are no longer involved. Keep in mind that very few Dept of Ed loans get sold. This is because they have no SOL and are collectable indefinitely. You WILL see a garnishment on this. Guaranteed.

>>I hope this information was helpful in clearing up your misunderstandings.

Wizardofsnog
Grand Rapids, Michigan
U.S.A.