What are my rights if a collection attorney contacted me regarding a private student loan?

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What are my rights if a collection attorney contacted me regarding a private student loan?

They are advising I need to pay 10% of the loan amount up front before they will negotiate a payment plan. If I cannot pay that amount, they will pursue litigation. Is this true? Do I need to pay that large amount up front? Can I contact the creditor directly?

Asked on December 17, 2014 under Bankruptcy Law, Maryland

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

There is no law saying that you have to pay 10% before they will negotiate; however, there also is no law saying that the creditor or its collections agent can't make that a requirement. After all, negotiations, entering into a payment plan, etc. are voluntary, so the creditor is free to set any terms or conditions it likes on such negotiations or getting a payment plan.

If the collections agent is an attorney, you really can't contract the creditor directly; once a party is represented by a lawyer, you are supposed to talk to the attorney. You could try calling the creditor, but they will almost certainly refer you to the lawyer.

If you can't pay them what they want, they have the right to sue you--anyone not paid an acceptable amount on a debt has the right to sue.


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