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My son has student loans and sends a monthly payment in which

Resolved Question:

My son has student loans and sends a monthly payment in which is suppose to be distributed between all his loans-- per his lender-- they have not done that and have put his last loan in default -- he has gotten 5 different answers from 5 different people- and finally was told nothing could be done and that's that-- and have sent him to collections-- he pays every month

Thank you
Submitted: 5 years ago.
Category: Legal
Expert:  Attorney & Mediator replied 5 years ago.
1) What evidence does your son have reflecting the arrangements he made with the lender?

2) What kind of lender is this? Was this a consolidation program?

3) How long has our son been making payments before he discovered this error? Does your son have access to his accounts online?


Thanks



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My answer or reply is also limited to your facts presented and additional information you post may not come in after my reply or answer has posted, if this has occurred please let me know and I will answer further. Due to site tech reasons, oftentimes I am initially only able to see the first part of your post, so this may result in more interactions between us. There might also be a delay in my reply or answers, as I may be helping other customers, or called away from my office or have logged off. Please be assured your question(s) will be answered promptly.

Customer: replied 5 years ago.

He had phone conversations with 5 people with names and dates--every call is documented on the lenders end also.

 

Citiassist-- no consolidation

 

Been making payment quite some time now-- has online access-- this just came out of the blue-- got a call 01/27/11- stating it was a collection agency and 01/31/11 was his dead line-- Citibank did state they saw the note in the computer as how the money was to distributed-- but for some reason it wasn't

Expert:  Attorney & Mediator replied 5 years ago.
Thank you for your reply.

It would be great if he actually had a copy of that writing agreement since the other party has the ability to edit such information. However since there has been a history of such payments, your son can show a pattern of the agreement.

What to do? Since it is now in the hands of collections, your son needs to make contact with the collection agency and demand validation (demand in writing that he now owes collections the money). Under the Fair Debt Collection Practice Act, your son has no written contract with the collector and therefore does not owe them anything without proof. If the collection agency does not verify and proceeds with a lawsuit your son can raise defends to deny them collecting the money.

As to Citibank, your son can legally sue them for breach of agreement. It would requiring filing law suit for breach of contract and negligence. In the alternative he can file a complaint with the FTC and the NY consumer protection board which regulates banking, but please note these options may be slow in processing.

http://www.nysconsumer.gov/contactus.htm


The fact however remains that since the matter is now sent to collections, your son needs to resolve that issue first. Below is a layman's guide on how to dispute collections. It should buy him sometime while he tries to work out the problems with the lender.


http://www.creditinfocenter.com/rebuild/debt_validation.shtml







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