Hi! I'm new here and after lurking here and reading through some great information, I am seeking some feedback!
After years and years of bad credit habits (and a divorce), I am finally serious about cleaning up my credit. I have changed careers and love the change ( I needed it). During the stressful time, I let my student loan go into default and soon my wages were being garnished after a year of employment. I paid of NYS loan in less than a year. It was around $4000. My taxes were also taken and applied to this debt.
Since then I have learned that I don't have to file taxes if I don't owe the IRS any money. I have staggered out my filings. To make a long story short: I was sent a letter from US Dept of Ed stating that I was able to make voluntary payments and that I needed to call them. The US Dept of Ed had been garnishing my wages for some time. The amount they take seems to be a percentage that adjusts as my income adjusts (due to overtime, etc). I took the bait and called them. Needless to say I was redirected to the collection agency. The collection agency told me this is what I needed to do in order to rehab my loan and get out of default status:
pay $900 up front, when I told them I could not do that, they said $450 that they wanted my checking account information to assure them that I was serious about paying. After that, I would have to make payments of $98 dollars a month for 10 months on top of the garnishment. After 10 months, my loan would be rehabbed and I would continue paying the $98 per month until it's paid off.
This all sounded like they wanted me to pay their fees, even though they said they would waive them. I am not too keen on giving them my checking account information when I can just mail a money order issued by the postal service as guaranteed payment. I am tempted to let them continue garnishing my wages as the money they take out still leaves me with enough money to live ok off of. I am also considering sending additional money directly to the US Dept of Ed. I know it is bad to have a garnishment on my account but I am not trusting this collection agency.
Any thoughts or ideas on what I should do? I really want to pay this off and start rebuilding my credit. This student loan is my most expensive debt.
Thanks!
