Author Topic: Doh! Made a boo-boo, need some input  (Read 5806 times)

PeachFuzzInVA

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Doh! Made a boo-boo, need some input
« on: July 25, 2014, 06:00:45 PM »
Long story short, I had a student loan that I accidentally let go into default about 2 years ago due to the loan coming off auto-payment and me not having my head in the right place to realize it until it was already defaulted on. I've been religiously paying $300 a month to the collections agency for a pretty good while now and have the outstanding balance down to $12,611. I've tried several times to get them to take a low ball offer to settle the account, but they haven't bit on an amount that is to my satisfaction yet and since it's now at 0% interest, I've just continued to pay on it rather than paying it off. So to cut to the chase, the collections agency called today to let me know that they would no longer be servicing the account as of July 31st and offered to settle the account for $6,000. That would be a "return on investment of over 100%" so-to-speak, so it seems like a no brainer to settle. I can easily afford the $6,000, but I would have to sell stock, which as you know already would take several days to settle and then several more to transfer over into my checking account to make the payment. By then, the deadline will have passed. They won't accept a payment on a credit card, so that leaves me scratching my head wondering, "how the heck do I get them the $6,000 by the 31st when I have it but can't access it?"

SummerLovin

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Re: Doh! Made a boo-boo, need some input
« Reply #1 on: July 25, 2014, 06:07:54 PM »
Can you transfer money from your credit card to your checking account, ie are they at the same bank? Ff so, write the collection agency a cashiers check, and pay off the credit card when the stock money clears. 

labrat

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Re: Doh! Made a boo-boo, need some input
« Reply #2 on: July 25, 2014, 06:18:35 PM »
Tricky. 

Don't know if this is legit or not: http://www.ehow.com/how_7510189_use-credit-card-cashiers-check.html

You'd probably get hit with a cash advance fee but since half of your debt will be erased, it would be worth it - as long as you can pay the statement balance in full!

TeresaB

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Re: Doh! Made a boo-boo, need some input
« Reply #3 on: July 25, 2014, 07:07:18 PM »
Do you have a friend or family member that could loan you the money? I generally don't advise lending between friends and family, but a very short-term loan to solve a cash-flow problem seems different to me.

Hotstreak

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Re: Doh! Made a boo-boo, need some input
« Reply #4 on: July 25, 2014, 09:29:49 PM »
There are a few options through the financial services industry:

Each of your credit cards have a Cash Advance limit, which is separate than your purchase limit.  Call your card companies and ask what that limit is on each card.  Go in to your bank and request that exact amount to be advanced.  They will run it on a machine, you sign, they give you the cash (or put it in your account so you can write a check for your student loan).  It is a simple transaction they are familiar with.  You will probably pay 5% of the amount advanced and charge you typically 24% APR - The fee is all that matters here, as you will only have the balance for a few days & won't accrue much interest.

There is also a limit for how much you can overdraw your checking account without the item being returned.  Your bank is highly unlikely to tell you this, as it represents the maximum amount you could potentially fraud them for.  However, they may, or may give you some indication if you tell them you need to rely on this for a small amount, and give them proof of your upcoming transfer.  An OD will cost you $35 or so.

You can also get a payday loan, which is probably the most expensive option.  You will get a check to deposit in your bank that day, and should have access to those funds soon, depending how large the check is (again, ask them, you can negotiate this).  Call a couple places to see what they charge.  They should be competitive with each other.


Other than that.. the things others have mentioned.  Borrow money from friends, family, ask for a draw from your employer, sell something on craigslist.  Those are probably the best ideas!  Good luck!

lakemom

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Re: Doh! Made a boo-boo, need some input
« Reply #5 on: July 26, 2014, 05:51:42 AM »
More importantly than HOW to get the money.  WHY are they no loger servicing it?  ARe they selling it to someone else?  Will that 6k reduce the amount owed to 6+k OR make the account Settled in Full (ie you no longer owe ANY monies for THIS student loan)?  If they are offering settled in full make sure you have that IN WRITING before you mail the check.  Then if everything looks right going forward, ask your bank for a personal loan with the stocks as surety for the loan.  Much better interest rate and a lot less risk than cash advancing a credit card.  Then you can choose to either sell the stock and pay the loan off asap or make the monthly payments and keep the stock invested.

TomTX

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Re: Doh! Made a boo-boo, need some input
« Reply #6 on: July 26, 2014, 06:06:51 AM »
You MUST have the offer of FULL SETTLEMENT in WRITING before you do anything.

Phone conversations are worthless.

You may need to go through a couple of iterations before you get non-bullshit offer with a non-bullshit deadline in writing.

Often, collections companies do something like this to get $6,000 out of you - then keep hounding you for the rest of the money.

snickers

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Re: Doh! Made a boo-boo, need some input
« Reply #7 on: July 26, 2014, 08:41:02 AM »
You MUST have the offer of FULL SETTLEMENT in WRITING before you do anything.
Phone conversations are worthless.
You may need to go through a couple of iterations before you get non-bullshit offer with a non-bullshit deadline in writing.
Often, collections companies do something like this to get $6,000 out of you - then keep hounding you for the rest of the money.

Listen to TomTX..   Get it in writing..    Save copies of everything forever!   

If you do nothing else listen to TomTX..   Nothing over the phone, all snail mail.  Keep all correspondence forever.    One more time listen to TomTX  Never under any circumstance give them access to your bank accounts.   Ive played this game..
« Last Edit: July 26, 2014, 08:42:39 AM by snickers »

Greg

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Re: Doh! Made a boo-boo, need some input
« Reply #8 on: July 26, 2014, 10:09:38 AM »
If I were in your shoes I'd first contact the original loan provider to see if they'll "buy back" the loan to remove it from collections.  After that I'd want to know what the "no longer servicing" thing is about.

PeachFuzzInVA

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Re: Doh! Made a boo-boo, need some input
« Reply #9 on: July 27, 2014, 09:13:47 AM »
Good advice here, thanks guys. I'll do some more digging and ask for some things in writing on Monday before I make any commitments.

arebelspy

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Re: Doh! Made a boo-boo, need some input
« Reply #10 on: August 14, 2014, 09:43:27 AM »
More importantly than HOW to get the money.  WHY are they no loger servicing it?  ARe they selling it to someone else?  Will that 6k reduce the amount owed to 6+k OR make the account Settled in Full (ie you no longer owe ANY monies for THIS student loan)?  If they are offering settled in full make sure you have that IN WRITING before you mail the check. 

This immediately threw up a red flag to me too.  Why are they so eager to settle, and what's going to happen to the debt?

How did you research turn out?
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
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PeachFuzzInVA

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Re: Doh! Made a boo-boo, need some input
« Reply #11 on: August 18, 2014, 08:23:49 PM »
Sorry for the late response. Been out of town for a little while. I too took their desperation to settle as a sign that I was in a position of negotiating power. I drug the negotiation out to the last day, and the offer magically dropped from $6,000 to $4,500. I told them I would see what I could do and they agreed to extend the "deadline" out a few more days. A day later, I told them I could only come up with $4,000 on such short notice and they took it. I got the settlement agreement in the mail last week and promptly paid the $4,000 in 4 installments of $1000 on consecutive days. As mush as I hate the idea of not owning up to a debt I agreed to, it sure feels good to save $8600 off the loan balance and drop my monthly obligations by $300.

G-dog

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Re: Doh! Made a boo-boo, need some input
« Reply #12 on: August 18, 2014, 08:34:46 PM »
Congratulations!  Sounds like you got it in writing, and are clear. Worst case scenario - You still have to watch out for later demands for money.  Keep that paperwork in a safe place.  I hope this is it though, and that you are done! Great feeling!

arebelspy

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Re: Doh! Made a boo-boo, need some input
« Reply #13 on: August 19, 2014, 10:42:32 AM »
Awesome, glad it worked out.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.