Sarah has $40k+ in student debt that went into default after she got sick and had to spend a lot of money on medical care. She’s been paying it off, but one of the companies that owns one of her loans, NCO Financial, has told her that unless she signs a legal document that says she can pay $260 a month, they’re going to place her account back in collections and start harassing her even more than they are now (they’re already calling her daily at home and work)…
Now, she can’t pay $260 a month and doesn’t want to sign this document, but is looking for advice about whether she should or not. I haven’t heard about this kind of affidavit so I’m just going to throw that part out to the readers, but I do know that collection agencies are not allowed to just keep calling you at your home and work to get you to pay. That’s a violation of the Fair Debt Collection Practices Act. Inside, Sarah’s story and what she can say to NCO to get them to stop calling.
I’m 27 and graduated with about $40k in student debt. Around the time my loans went into repayment, I got very sick and had to pay a lot of medical bills and ended up going into default on my student loans. Since then I’ve been trying to dig my way out of the hole. I recently rehabilitated my Sallie Mae loan. I’m in a rehabilitation program with collection agency Windham Professionals– I’m paying $335 a month for nine months, not a small amount on $38k a year. I’ve got one other loan with a collection agency, NCO Financial.
I’ve been making payments on time to NCO for 27 months, long enough that my debt should have been rehabilitated months ago. Here’s the thing. They want me to sign a statement that says I am able to afford to pay $260 a month should my loans be rehabilitated, triple my current payment. I can’t afford that. I sent them a letter three months ago explaining that I have a chronic medical condition that requires me to pay hundreds of dollars in prescription copays each month, and therefore I cannot afford another $260 a month. It’s on record. Now they’re telling me that if I don’t sign this (false) legal document, they will never rehabilitate my loan. In fact, they told me that if I keep paying the amount I’m currently paying, they’ll place me back into collections and step up their harassment. Repeat: I’ve been making my payments on time for 27 months! One representative told me that they’re doing this to all of their victims– er, customers– because the company is in trouble. Guess they took on too many toxic debts… seems to be an epidemic!
I’m concerned that if I sign the document, I’ll be held liable for the $260. Furthermore, I’ll be signing a legal document that is (a) false, and (b) contradicts a statement I’ve already put on record. If I don’t sign the document, though, I’ll continue to be in default and may be subject to further penalties. Meanwhile, NCO is harassing me with daily phone calls to my work and home numbers.
My questions for you and your readers:
1. Is this legal? If not, do I have any recourse?
2. What happens if the company goes out of business?
3. What should I do? I could:
(a) sign the document, pay the triple amount, and stop taking my medicine and paying my rent;
(b) continue to pay the current amount, in the hopes that external circumstances (the election, the company going under) intervene; or
(c) stop paying anything, since they’re telling me that the consequences will be the same whether I pay the current amount or nothing at all.
I’m at a loss here… has anyone faced a similar situation?
Next time they call, say this:
“I am requesting that you not contact me by phone in the future. I do not want to receive any more calls from you at home or at work and am asking you to communicate with me only in writing.”
If they give you static, say this:
“The Fair Debt Collection Practices Act requires that you stop phoning me at home and at work once I request that you do so. I intend to send you a certified letter tomorrow putting my no contact request in writing. If you continue to phone me, then I will file a complaint with the FTC and the attorney general.”
Then send them this letter by certified mail:
City, State Zip
Debt Collector’s Name
City, State Zip
Re: Account Number
Dear Debt Collector:
Pursuant to my rights under federal debt collection laws, I am requesting that you cease and desist communication with me, as well as my family and friends, in relation to this and all other alleged debts you claim I owe.
You are hereby notified that if you do not comply with this request, I will immediately file a complaint with the Federal Trade Commission and the [your state here] Attorney General’s office. Civil and criminal claims will be pursued.
Any advice about the affidavit?