School loan in collections! Advice?

Posted by admin on May 31st, 2009 at 12:00am

Question:
I just found out about a balance due on a school loan I had about seven years
ago. I owe a University $633.00. They have sent this anount into collection
with an agengy in Arizona.

I want to pay the debt, and can easily do so. I called the collections
agengy, and was greeted with a VERY rude and loud account manager. As I was
trying to speak, this person just raised her voice until she drowned me out,
spouting threats of lawsuits, and bad marks on my credit report.

This debt has never shown up on my credit reports (Experian, Trans Union, nor
Equifax), and I have not recieved a bill for it in over 6 years. I had
totally forgotten about it. I am perfecty willing and able to pay, but I am
afraid of it going on to my credit reports.

I was trying to tell this to the account manager at the collections agengy,
but she was threatening to put it on there even if I DO pay! When I asked
for a letter from her stating that it would not onto my credit reports if I
paid, she said that they can put it on there if they want, that they have
every right to.

She was right of course, but it made the letter they sent to me look like
empty promises. In the letter, they were threatening to put it on my report
if I didn’t pay, but when I called them to make good, they said that it would
go on the report anyway!

At this point, I called to speak to this person’s superior, and have not had
any calls returned. Do these people want any money!?

Answer:
If you pay the school directly, the collection agency won’t get their cut.
Bummer for them. I’d pay the school, and send a letter requesting they
drop the collections activity. Send letters explaining the circumstances
to the school and the collection agency, return receipt requested. Ask
for a written response from both the school and the agency.

If it ever does show up on your report, it should be easy enough to
dispute, or at least mitigate with the 100 word statement you’re allowed.

In any case, I doubt that this is enough to hold up the close on a home
or to cause a loan application to be rejected. Mortgage lenders are pretty
flexible, especially in light of the fact that your credit is otherwise
good. It’s easy to borrow for homes and cars because they’re easy to
repossess. The Visa/MC folks can be tougher, because they often cannot
repossess intangible or consumed goods purchased with that type of credit.

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