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Elizabeth Prentice
Elizabeth Prentice, Attorney
Category: Bankruptcy Law
Satisfied Customers: 174
Experience:  Managing Attorney for one of the largest consumer bankruptcy firms in America.
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Hi- I have private student loans, original creditor was TERI

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Hi- I have private student loans, original creditor was TERI . I filed for bankruptcy in 2001- when I finished the plan, TERI received a judgment requiring payments of $400 a month until paid in full, unless there was a default. I just filed a second Chapter 13 B/R, and finished the plan in 2011. I received a letter this week from Weltman, Weinberg and Reis, demanding the entire balance. My question: Does WWR have to provide proof that they are an assignee of this debt? And since I filed B/R, and did not default, can I just resume payments of $400 per month as agreed to in the prior judgment?
I am a bankruptcy attorney and I would be happy to assist you. First, WWR does have to provide evidence that they are an assignee of the debt under the FDCPA. Second, since you filed Chapter 13, the debt should have been listed in your bankruptcy and you should check what the current balance is, who filed the original claim in your chapter 13 and the documentation which should be attached to the claim. You can get a copy of that claim with documentation from the court clerk, on with an account or from an attorney. While you were in bankruptcy, the debt was stayed. Therefore, you have not defaulted. You should be able to continue to make payments per your past payment schedule. However, if the debt was sold, the new assignee (WWR) has the option to create a new payment plan. Their terms may be better than the old terms and you may even be able to get a smaller monthly payment. You should confirm that they are the proper assignee though before you give them money. I hope my answer has assisted you and that you will leave me a positive rating!
Customer: replied 3 years ago.

Thanks Elizabeth. I did send WWR a letter requesting verification, and they sent me the agreement filed with the court in 2004, with the amount owed. I have made payments since 2004. In addition, they sent several pages from the previous assignee, showing payments I've made since 2004. They did not send me anything to show how they ended up with the loan, and the amount they claim is a lot higher than the amount listed in the B/R. Do they have to send me the agreement between them and TERI or the previous attorney's office that was collecting for TERI? Also, I'm sure they won't reduce my payments from $400, but am I entitled to the same payment and interest rate as outlined in the 2004 judgment? Thanks!

Your payment and interest rate will depend on the prime rate. As you probably heard, everyone's student loan rates just went up this month because of congress. So your interest rate and the payment amount may be increased a little. Sometimes private lenders offer income based repayment and/or financial hardship repayment plans. You should at least ask if this is an option.
Next, under the FDCPA a debt collector must verify the debt in one of the following ways: 1) Proof the debt collector owns the debt/or has been assigned the debt in the form of a direct contract;
2) A copy of a statement from the original creditor with complete payment history, starting with the original creditor, including evidence of how this debt was calculated. See, Fields v. Wilber Law Firm, Donald L. Wilber and Kenneth Wilber, USCA-02-C-0072, 7th Circuit Court, Sept 2004.; or
3) A copy of the original signed loan agreement.
It sounds like they verified the debt by sending your the agreement and the payments you have made. The next step is determining if they are claiming the debt was assigned directly to them. Under the FDCPA, if a debt is assigned, they have to provide you a copy of the contract which provides for such an assignment and contains your signature. Most contracts do permit assignment somewhere in the fine print. So as long as they gave you the original or subsequent contract that says the original lender can assign the loan, that is all they need to provide. If you are disputing the amount owed, you should contact them with a copy of the Bankruptcy claim they (or the previous lender) filed in your case and ask why the amount is different. It may have merely been that interest was accumulating. Don't forget that anytime you send a creditor or debt collector a letter, make a copy for your file and send them by certified mail, return receipt requested.

Customer: replied 3 years ago.

Thanks. I haven't heard very good things about WWR, so if they get to decide the terms, I'm sure they will demand payment in full. The judgment set my interest rate at 5% and $400 a month payments. Is WWR bound by that unless I refuse to pay and default? I know it's complicated since TERI already assigned the loan once to a law firm for collection in 2004, but there is nothing in the pleading/agreement that states the previous law firm can re-assign or sell this debt. Won't WWR have to prove both the original contract I entered into with TERI and the subsequent agreement I made in 2004 are assignable? I took these student loans out in 1999, and TERI has since filed bankruptcy, so I'm not sure WWR can come up with the original contract.

The judgment can be amended by the creditor. However, if they change the rate, they need to send you notice explaining why the rate has increased. For example, they need to send you how the rate is calculated - 1% + prime and then state what prime is.
There does not have to be anything in agreement that says the first law firm can assign it to another law firm. The original contract merely has to state it can be assigned. Therefore, the debt can keep getting reassigned over and over again. However, they must provide you with documentation as I mentioned previously, per the FDCPA. As long as they can provide you with a copy of the original contract with your signature, they have the right to collect on the debt. If you request in writing that exact document, they will not be able to collect on the debt until they provide it. See, FDCPA Section 809. Validation of debts [15 USC 1692g]. If you request the original contract and they still attempt to collect on the debt, then you have the right to file a Complaint in your local court claiming they have breached the FDCPA. You are entitled to $1,000 in statutory damages per violation and your attorneys fees and costs. Therefore, make sure to send a certified letter requesting that the company provide you the contract permitting assignment. If they do not and continue collections, you should consult with an attorney in your area who does FDCPA breach cases. Most attorneys in that field of law will work on a contingency fee basis, so it should not cost you anything to retain an attorney. I hope my answer has assisted you and that you will leave me a positive rating!
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