Like many people these days, our client was overwhelmed with her student loans after graduating from school. She filed a chapter 13 bankruptcy under the false impression that her loans would be discharged, but student loans are almost impossible to have discharged and there is no real advantage of a Chapter 13 filing. Upon filing for bankruptcy, all of her student loans went into default—though people are often unaware, when you or your co-signer files for bankruptcy, your student loans are automatically entered into default, whether they are included in the filing or not. The creditors aggressively pursued her for a number of loans as discussed below.
First, she had 4 loans with Key Bank totaling $58,800. Key Bank is often a very difficult creditor to deal with, but we were able to negotiate a settlement with them saving our client a significant sum of money. Key Bank agreed to a settlement of $27,000 paid over a payment plan with no interest. This was a savings of $31,000 and a discount of 55% from the total balance.
Next, we handled 3 loans in collections with NCO Financial Systems, Inc. The creditor on these loans was NCT or National Collegiate Trust. The total balance was $66,000 on the three loans and NCO would not budge on any settlements after the client had retained a prior attorney. After we conducted an investigation, we discovered that one $26,000 loan was a duplicate of another loan on the account. NCT and NCO had two different loan numbers on this loan and the one it duplicated, but upon discovery, we were able to have the entire $26,000 loan dismissed. Further, we settled the entire remaining balance with NCO Financial Systems, Inc on behalf of NCT National Collegiate Trust for a payment plan on a total balance of $19,500. This represented a savings of $46,500 off the original balance our client owed and a discount of 70.5% off the loan balance when our office was retained. As well, we saved the client from a fast approaching law suit by National Collegiate Trust. In New York, NCT usually utilizes the law firms of Forest and Garbus or Rubin and Rothman to sue debtors.
Finally, we were able to negotiate a fantastic settlement on our client’s Ally Bank FKA GMAC Bank loans that were being collected by Weltman, Weinberg & Reis Co., LPA. The total balance owed was $49,000. Ally Bank had declined numerous settlement offers from the client and her prior attorney on these loans and WWR refused to partake in further negotiations when we began. After several months, we settled the loans on a payment plan for $12,000. This represented a savings of $36,000 for our client and a discount of 75% off of the total loan balance. Though Ally Bank FKA, GMAC Bank is often unwilling to negotiate with their customers and Weltman, Weinberg & Reis takes a hard stance on these cases, we have successfully negotiated excellent settlements with them for our clients.