Hundreds of companies charge high fees with the promise of helping struggling borrowers reduce or eliminate their student loan debt. These companies have capitalized on a booming market. Not all companies that collect fees in exchange for student loan debt relief are scams, but more than 130 businesses have histories that give consumers a reason to be skeptical. A recent public records investigation revealed penalties, lawsuits from federal and state authorities, private lawsuits and poor ratings from the Better Business Bureau on these “so called” student loan debt relief companies.
Here are some steps you can take if you are dealing with a fraudulent student loan debt relief company.
End your affiliation with the company: Contact the company to request a refund and cancel your contract, if you signed one. Contact your bank immediately to cancel automatic payments. Tell them that you no longer authorize charges from the company.
Contact your lender or servicer: Call and explain the situation and that you have been paying a third-party company for student loan assistance.
Regain control of your student loan account: Contact your lender or servicer in writing and send a copy of the letter to the debt relief company. Once you regain control of your student loan account, resume making loan payments to your federal loan servicer or lender if you have stopped.
Take a look at your “FREE” options: Everything a “so called” student loan debt relief company can offer you, the Department of Education or your federal loan servicer can provide for free. This includes:
- Federal student loan consolidation, which will not lower your interest rate, but may qualify you for certain repayment plans and forgiveness programs.
- Income-driven repayment plans cap your monthly payment at a percentage of your income and forgive your remaining balance after 20 or 25 years.
- Federal loan forgiveness programs can cancel some or all student debt for borrowers who qualify based on their profession, employer or loan type.
- Deferment and forbearance provides temporary periods of payment relief but grow your balance as interest continues accruing.
Seek legitimate financial help: If you are looking to discuss your financial situation with a professional, a certified student loan counselor trained by the National Foundation for Credit Counseling is a viable option. These advisors work for nonprofit credit counseling agencies and provide one-on-one services, oftentimes free of charge.
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For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
