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[arts_and_sciences]

129K student loan debt
part-time grad student taking out more loans for a 2nd Masters Degree
learning valuable computer skills (I think)
approx. 25-35K in credit card debt, spread over 5 cards: 2 from capital one, 2 from BofA, 1 Chase/MBNA

Just received my first summons for just over 5000  (county civil not small claims) lawsuit, from debt-buyer-of-BofA's lawyers. 

They served my process papers at my parents house, while my cousin and aunt were visiting..depressing
Unfortunately for me its within the statute of limitations for my state.

I moved back in with my parents to save up money, and now I'm a distance learning student.

I'd like to quash the credit card debt somehow--but all I have is small grant (500-1000 per semester) tiny residual income from freelance writing, and a really good chunk of change of leftover student loan money (21k).

I'm thinking of offering a lump sum to this awful debt collector or their lawyers, but I get the feeling they're going for an easy default judgement or summary judgement for the entire amount---plus another debt they bought from BofA.

It might take awhile for me to start making some real dough.  How should I handle this?  Jeez, I was going to buy a fixer upper house and declare a homestead exemption--isn't student financial aid exempt from garnishment,lien or account freeze?  I ABSOLUTELY don't want them to levy my bank account.

I'm a poor working class dude, my parents didn't save for my college, hence my huge debt.  But college/graduate school was the best 7-10 yrs of my life by far.  I carefully budgeted and was able to graduate undergrad and grad while living below poverty level and rent (housing) was my biggest expense. 

I'm trying to get to the next level (middle class or at least poverty level and on my own again)

Any pointers?  Day trading?  Buy a fixer upper house on ebay or craigslist and flip it?  Hire an attorney?  Declare Ch 7 bankruptcy?

[prytania3]

Dude...

The student debt will not go away with bankruptcy; although there might be exceptions--I'm not sure.

As for the credit card debt, make them prove you owe it. There's a letter on here somewhere that tells you all the pertinent questions to ask (I'll try to find it and post it separately). Do not give them any information (like your social security number, etc.It is not your responsibility to provide them with information). Send the letter to the yahoo who sent the summons. It's probably a lawyer. Also, if it doesn't have a court date, they maybe trying to scare you--though the debt hounds are getting pretty aggressive.

But who the hell is willing to give you more loans? Your credit rating must be in shambles. I can't believe anyone is going to lend you more money.

[prytania3]

In the letter, you are not saying the debt is not yours (althoygh you could), you are just attemptin to validate that it is yours. If they can't validate it's yours, they can't collect and rarely can they validate. Make sure you send the letter registered and certified because they have to respond to you in 30 days. They will respond asking for your social. Don't give it to them. Just send a copy of this letter again and tell them it is the second time you've sent it. 30 days. They have to respond, but they may respond with more questions. Send the letter again.

Attempt to Validate Debt.

Under the Federal Debt Collection Practices Act, you are allowed to challenge the validity of a debt that a collection agency states you owe to them. Use this letter and the following form to make the agency verify that the debt is actually yours and owed by you. Keep a copy for your files and send the letter registered mail.

Your Name
123 Your Street Address
Your City, ST 01234

ABC Collections
123 NotOnYourLife Ave
Chicago, IL

Date:

Re: Acct # XXXX-XXXX-XXXX-XXXX

To Whom It May Concern:

This letter is being sent to you in response to a notice sent to me on September 30, 2002). Be advised that this is not a refusal to pay, but a notice sent pursuant to the Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 (b) that your claim is disputed and validation is requested.

This is NOT a request for “verification” or proof of my mailing address, but a request for VALIDATION made pursuant to the above named Title and Section. I respectfully request that your offices provide me with competent evidence that I have any legal obligation to pay you.

Please provide me with the following:


•What the money you say I owe is for;
•Explain and show me how you calculated what you say I owe;
•Provide me with copies of any papers that show I agreed to pay what you say I owe;
•Provide a verification or copy of any judgment if applicable;
•Identify the original creditor;
•Prove the Statute of Limitations has not expired on this account
•Show me that you are licensed to collect in my state
•Provide me with your license numbers and Registered Agent

At this time I will also inform you that if your offices have reported invalidated information to any of the 3 major Credit Bureau’s (Equifax, Experian or TransUnion) this action might constitute fraud under both Federal and State Laws. Due to this fact, if any negative mark is found on any of my credit reports by your company or the company that you represent I will not hesitate in bringing legal action against you for the following:

•Violation of the Fair Credit Reporting Act
•Violation of the Fair Debt Collection Practices Act
•Defamation of Character
If your offices are able to provide the proper documentation as requested in the following Declaration, I will require at least 30 days to investigate this information and during such time all collection activity must cease and desist.

Also during this validation period, if any action is taken which could be considered detrimental to any of my credit reports, I will consult with my legal counsel for suit. This includes any listing any information to a credit reporting repository that could be inaccurate or invalidated or verifying an account as accurate when in fact there is no provided proof that it is.

If your offices fail to respond to this validation request within 30 days from the date of your receipt, all references to this account must be deleted and completely removed from my credit file and a copy of such deletion request shall be sent to me immediately.

I would also like to request, in writing, that no telephone contact be made by your offices to my home or to my place of employment. If your offices attempt telephone communication with me, including but not limited to computer generated calls and calls or correspondence sent to or with any third parties, it will be considered harassment and I will have no choice but to file suit. All future communications with me MUST be done in writing and sent to the address noted in this letter by USPS.

It would be advisable that you assure that your records are in order before I am forced to take legal action. This is an attempt to correct your records, any information obtained shall be used for that purpose.

Best Regards,

Your Signature
Your Name
http://www.creditinfocenter.com/forms/sampleletter9.shtml

[arts_and_sciences]

I have drafted an abbreviated version of this letter, though it's probably recognizable as a pro se cut-and-paste job from the interwebz.  My guess is this won't prompt these guys to back off, as I have been through the dockets and they seem to get either default judgments from no-shows or summary judgments.  I saw one guy countersue these ********s over a matter of $800 for FDCPA violations and eventually won but it ended up in six-figure attorney fees.  I had an attorney offer to represent me "for free" but it seemed he just wanted to showboat on the off chance that he might win at the state and federal level, though couldn't guarantee as much in his "free" retainer contract.  Guess who would have to pay if I went against deep-pocket debt-buyer ******** lawyers and lost? 

[prytania3]

I have drafted an abbreviated version of this letter, though it's probably recognizable as a pro se cut-and-paste job from the interwebz.  My guess is this won't prompt these guys to back off, as I have been through the dockets and they seem to get either default judgments from no-shows or summary judgments.  I saw one guy countersue these ********s over a matter of $800 for FDCPA violations and eventually won but it ended up in six-figure attorney fees.  I had an attorney offer to represent me "for free" but it seemed he just wanted to showboat on the off chance that he might win at the state and federal level, though couldn't guarantee as much in his "free" retainer contract.  Guess who would have to pay if I went against deep-pocket debt-buyer ******** lawyers and lost? 

If they won't prove it's your debt, tell it to the judge. You don't recall it being yours and they can't prove it. Also, if you are pro se, then you are allowed to see what they have against you, so you'll know beforehand if they have the goods or not.

Dude, if you are going to rack up that much debt, you better learn how to be slick. And anyone who spends 6 figures for $800 is just a moron. I wouldn't use him as example of anything but abject stupidity.

As for the letter--it doesn't matter if it's cut and paste off the webz. It has all the necessary information.

But hey, if you know a better way--knock yourself out.

[arts_and_sciences]

I'm on Income Based Repayment with the student loans so I think I'll be ok.  It's the snowballing fees, interest and collection costs on the 5 credit cards that concern me.  It seems like Ch 7 might be an option.

[hegemony]

Is this a real post?

How to evade the debt is one issue.  How you came to have so much debt is another.  $129K is a huge amount for a BA and a master's, especially if you were living at poverty level, even if it was a fabulous time of your life. (You spent 7-10 years to get a BA and a master's?) You will be paying for that fabulous time for many, many years. And you've added some $25-35,000 in credit card debt since then?  And incurring more debt for a second master's?  You do know that scarcely any master's degrees will pay for themselves?  And you have $21,000 in unspent loans right now?  And your plan is to buy a house?  You know you won't get a mortgage with this financial history, don't you?  Not to mention that taking on more debt is just digging yourself deeper into the hole?

I think the larger issue is that you need to stop living beyond your means.  Maybe, just maybe, $129K in undergraduate loans is worth it.  Whether or no, that's water under the bridge.  But you need to halt the credit card spending right away.  Declaring bankruptcy, even if you manage it, won't erase your spending habits.  The relation of income to spending is the most crucial thing to tackle.  I suggest reading a stack of basic, reliable books on debt and personal finance, and following some personal finance blogs, e.g. Get Rich Slowly.  The problem is bigger than just how to get rid of your credit card debt. 

[arts_and_sciences]

Yes it's a real post, and I'm a real person.

I haven't used any credit cards since 2007.

And the basic food, rent and iiving expenses over 7 years does add up--even on a below poverty level budget. 

Going to college (and graduating) was a major accomplishment for me, especially for someone who is working class.

You have no idea how frugal I am and how carefully I budgeted, "spending habits" pfffft. 

I guess college is only for the rich?

[zharkov]

Yes it's a real post, and I'm a real person.

I haven't used any credit cards since 2007.

And the basic food, rent and iiving expenses over 7 years does add up--even on a below poverty level budget. 

Going to college (and graduating) was a major accomplishment for me, especially for someone who is working class.

You have no idea how frugal I am and how carefully I budgeted, "spending habits" pfffft. 

I guess college is only for the rich?

I grew up in the projects and drove a truck throughout most of my college years.  So 20/20 hindsight, it is not just about being frugal, but that we working class types also -- work.  Public universities are also often the best bet for working class types, as tuition is more reasonable and there are often work-study options.    Not that I'm blaming you, since all this jazz is not usually spelled out that well to students planning for college.

[prytania3]

Yes it's a real post, and I'm a real person.

I haven't used any credit cards since 2007.

And the basic food, rent and iiving expenses over 7 years does add up--even on a below poverty level budget. 

Going to college (and graduating) was a major accomplishment for me, especially for someone who is working class.

You have no idea how frugal I am and how carefully I budgeted, "spending habits" pfffft. 

I guess college is only for the rich?

I grew up in the projects and drove a truck throughout most of my college years.  So 20/20 hindsight, it is not just about being frugal, but that we working class types also -- work.  Public universities are also often the best bet for working class types, as tuition is more reasonable and there are often work-study options.    Not that I'm blaming you, since all this jazz is not usually spelled out that well to students planning for college.

2 years of community college also sweetens the pie.  I can't think of an undergrad degree worth 129K. I hope your master's is in accounting from Wharton.

I was also suspicious of this post. I thought--how is this possible someone is going to give this dude more money?

[arts_and_sciences]

I'm not asking for more money, even though I'm still eligible for limited student loans.  And if you mean a mortgage, I don't need one.  Some houses can be bought for cash, yes they are project (meaning DIY) houses, sometimes in not the best neighborhoods, and they require some hard work, but some of us aren't scared of this.  Remember I grew up in a rough neighborhood, and have done my sure of construction cleanup, demo, and all sorts of labor, only this time I would be working for myself as an entrepreneur and owner-occupant. 

Anyone think that debt validation letter will work as is?  It seems heavy handed and I don't know how the other possibly litigious party will react to specific threats of federal countersuit. 

And my education was worth every penny.  It was priceless really.  I studied at a public university, made use of every resource available, library, computer lab, and financial aid.   

And I'm a hispanic male to boot.  Though I test at an above average white or Asian level. (Yes it's politically incorrect humor--I already brought class into it, so why not gender, race and ethnicity?)

My college experience was priceless, I don't care what anyone says.
And I didn't ask for a snarky scolding did I?  Or disparagements regarding my creditworthiness, (though admittedly my credit now sucks).

Should I really fax over a customized version of Prytania's debt validation letter to the debt-buying attorneys?

[prytania3]

No, you shouldn't fax it.

You should mail it registered AND certified. Maybe overkill, but so what.

[clean]

You have 21000 in unspent student loan money?

Get it out of the bank.  (more later)


Here are some life steps...
1 make a list of everything you owe.  (get a copy of your credit report from annualcreditreport.com).  You are not even sure how much you owe.  Is it 25 or 35k?
2.  Take say 10k and be ready to use it to get rid of these debts. 
3.  Divide the 10K by the amount you owe... let's say it is 30K.  Start making calls to the ones that are calling you and tell them that all you have is 1/3 of what you owe and that you want a settlement in full.  When you get a letter indicating that they will accept that as settlment if full, you will send a cashiers check.  They will try to negotiate.  Tell them, "You dont seem to understand.  I am not negotiating.  This is all there is.  IF you dont want this deal, then I am going to call another creditor and offer them the money.  Do you want this deal or do I make my next call?"

4.  Now we need to get the money out of the bank so that they can not get it.  Here are the option for the 11K left (to get you through school... and you'd better just finish!):
a.  Traveler's checks.  They are insured if you lose them.
b. Safe Deposit box. 
c.  Cash ... get a small safe from a big box store.  They are heavy and fireproof.  (not the best option).

d.  Just repay some of the unsubsidised student loans.  As others said, they are not dischargable in bankruptcy.

5. Live on less than you make.  Stop borrowing.  You already are deep enough in debt.

[arts_and_sciences]

You have 21000 in unspent student loan money?

Get it out of the bank.  (more later)


Here are some life steps...
1 make a list of everything you owe.  (get a copy of your credit report from annualcreditreport.com).  You are not even sure how much you owe.  Is it 25 or 35k?

   Did that.  I got Equifax and Transunion.  The Transunion seems to list some debts twice (Bofa/Midland) which is why I'm confused.

2.  Take say 10k and be ready to use it to get rid of these debts. 

That's what I was thinking. 

3.  Divide the 10K by the amount you owe... let's say it is 30K.  Start making calls to the ones that are calling you and tell them that all you have is 1/3 of what you owe and that you want a settlement in full.  When you get a letter indicating that they will accept that as settlment if full, you will send a cashiers check.  They will try to negotiate.  Tell them, "You dont seem to understand.  I am not negotiating.  This is all there is.  IF you dont want this deal, then I am going to call another creditor and offer them the money.  Do you want this deal or do I make my next call?"

This gets me motivated to do something now, today even. This makes me want to take care of this today, or this week.

4.  Now we need to get the money out of the bank so that they can not get it.  Here are the option for the 11K left (to get you through school... and you'd better just finish!):

Ah, I'm have 18 credits completed (3.7gpa woo hoo), out of 30-36 to graduate.

a.  Traveler's checks.  They are insured if you lose them.

I've never bought  traveler's checks before.  This might be the ticket. Then I would want to travel, and I don't even have a passport yet.  I'll definitely look into this.

b. Safe Deposit box. 
c.  Cash ... get a small safe from a big box store.  They are heavy and fireproof.  (not the best option).

yeah, maybe not such a good idea, though I like the way you think.

d.  Just repay some of the unsubsidised student loans.  As others said, they are not dischargable in bankruptcy.

  I'd like to.  That's going to require some work.

5. Live on less than you make.  Stop borrowing.  You already are deep enough in debt.

I appreciate the advice, really thanks all!  I'm guessing I'm probably not the only one who took on massive debt to get through school.

Still confused and scared, and stressed out about the pending summons/lawsuit.  I was thinking to hunker down in an old house to fix up in Michigan (there's a fire sale up there on houses right now) either that or move to Europe.

[clean]

So you are 12 hours from finishing?  You have 21K?  FINISH  NOW.  Are the 12 hours available this semester?  Quit your job, move on campus, suck it up and GRADUATE!  21 K will more than pay for that. 

Get the money out of the traceable account and get on with life! 

Graduate!