Promissory Notes (questions)
I want to demand promissory notes from two different collectors. A sample
letter would be appreciated on how to demand for the promissory notes in
writing. How should the format be written?
I had a lawyer write demanding verification of the loans a few years ago
but there was no respose back. My loan is frm 1980. Perhaps the notes are
lost and only on computer. If the Board of Education has no copy of my
original contract but only data on a computer is that in my favor? What
scares me is they really do have copies but they are too "lazy" to verify
and mail copies of the promissory notes to me.
What do I do if they don't send the copes within 30 days? The collectors
are trying to get me to consolidate on loans or just make large payments
for 12-13 months. (rehabilitate) They claim I can only go through them
and not the Department of Education because they no longer hold my loans,
Thanks
RE: Promissory Notes
I demanded my promissory notes in writing and I got them back really
quick. These were from 1980. If I don't make up my mind what to do,
I will have a lawsuit. They insist I pay a certain amount a month.
I have no income other than child support. I don't have a leg to stand
on. 3 lawyers claim they cannot help me.
A few things to consider...
First, all student loan borrowers considering consolidation should review the copies of all promissory notes carefully. Verify that they are not other types of documents such as loan applications or other documents submitted by the borrowers. The document must be specifically identified on the face of the document as a "promissory note." Lenders and servicers have been known to provide photocopies of documents to borrowers (in response to demands for copies of promissory notes) that are NOT copies of notes, but rather are copies of other documents provided in an apparent attempt to mislead the borrower into believing promissory notes exist to support the loans.
Second, students should consider the impact that a court judgment against them for nonpayment of their debt will have with regard to their credit rating. If a student's credit rating has already been "trashed" by student loan lenders, servicers, and collection agencies, these industry players may have left that borrower with little incentive to protect his/her credit rating. Also, while the court judgment will remain enforceable for at least 20 years, there is no statute of limitations applicable to the enforcement and collection of student loan debts, so the federal government has again created a landscape where it may not benefit the debtor to avoid a court judgment for nonpayment of the debt. On the other hand, if a student loan borrower has managed to maintain a good credit rating, the negative impact of a court judgment could be a significant consideration. In general, if a borrower with a "trashed" credit record intends to rehabilitate that credit history in the future, it will generally be easier without a court judgment appearing in your credit report.
Third, know that student loan lenders and servicers cannot demand in excess of 20% of a borrower's "income" for loan payments related to federally guaranteed student loans under particular circumstances. Although this may not apply to your circumstances, student loan borrowers need to be mindful of this limitation on the ability of lenders, servicers, and collection agencies to demand excessive monthly payments. Two specific federal statutory provisions related to this 20% limit that might be of interest to our members appear below. Read the language carefully, as the definition of "hardship" under the FFELP requires full-time employment. Note that the federal bankruptcy courts have established their own definition of "hardship" in apparent contravention of Congressional intent regarding what constitutes "hardship." Does anyone else find this fascinating?
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TITLE 20--EDUCATION
CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
SUBCHAPTER IV--STUDENT ASSISTANCE
Part B--Federal Family Education Loan Program
Sec. 1085. Definitions for student loan insurance program
As used in this part:
...
(o) Economic hardship
(1) In general
For purposes of this part and part D of this subchapter, a
borrower shall be considered to have an economic hardship if--
(A) such borrower is working full-time and is earning an
amount which does not exceed the greater of--
(i) the minimum wage rate described in section 206 of
title 29; or
(ii) an amount equal to 100 percent of the poverty line
for a family of 2 as determined in accordance with section
9902(2) of title 42;
(B) such borrower is working full-time and has a Federal
educational debt burden that equals or exceeds 20 percent of
such borrower's adjusted gross income, and the difference
between such borrower's adjusted gross income minus such burden
is less than 220 percent of the greater of--
(i) the annual earnings of an individual earning the
minimum wage under section 206 of title 29; or
(ii) the income official poverty line (as defined by the
Office of Management and Budget, and revised annually in
accordance with section 9902(2) of title 42) applicable to a
family of two; or
(C) such borrower meets such other criteria as are
established by the Secretary by regulation in accordance with
paragraph (2).
(2) Considerations
In establishing criteria for purposes of paragraph (1)(C), the
Secretary shall consider the borrower's income and debt-to-income
ratio as primary factors.
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TITLE 20 > CHAPTER 28 > SUBCHAPTER IV > Part B > § 1078
§ 1078. Federal payments to reduce student interest costs
...
(3) Forbearance
A guaranty agreement under this subsection—
(A) shall contain provisions providing that—
(i) upon request, a lender shall grant a borrower forbearance, renewable at 12-month intervals, on terms agreed to in writing by the parties to the loan with the approval of the insurer, and otherwise consistent with the regulations of the Secretary, if the borrower—
...
(II) has a debt burden under this subchapter and part C of subchapter I of chapter 34 of title 42 that equals or exceeds 20 percent of income;
...
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Economic Hardship
sjohnson, your apple will never be an orange.
The citations you are citing pertain to deferment and forbearance, not discharge.
To prevent default, they allow a borrower to postpone payments for a limited period of time, not to exceed 36 months. The maximum repayment period for the loan is extended by the number or deferment or forbearance months used. Once a borrower has used 36 months of Economic Hardship Deferment and 36 months of Mandatory Forbearance for Excessive Student Loan debt burden they are not eligible for additional time, even if their circumstances have not changed. Why? Because congress intends them to repay...improving their circumstances so they can repay is still their responsibility.
The very clear intent was to give non-defaulted borrowers time to obtain better employment and improve their situation so they could repay their debt in full, not create or modify any provisions under which a debt could be discharged.
Fake electronic signature on consolidation Promissory Note
Susan, SM Borrower
Sallie Mae fabricated a fake electronic signature on the consolidation Promissory Note.
I have the same issue: Sallie Mae entered me into a consolidation without having me sing the promissory note for the consolidation. SM has never received the original copy of the promissory note signed by me. Now, SM claims that I have signed the promissory note on the internet with an electronic signature and that is that. In fact, I only used the internet application but never even completed it: SM never provided a genuine electronic signagure on this internet application form. Then, SM faked an electronic signature on the application, claining the electronic application is the same as the promissory note and the electronic signature is sufficient enough to legally bind me with this consolodiation. On the other hand, on the promissory note, it reads: "Never sign an incomplete promissory even though you may be forced to do so so" "Sign the promissory note in ink, send the original to the lender and keep the copy with you." I have never signed it with a pen in ink and send the original copy to SM. I have complained to all state agencies and Department of Education, but to no avail. Is there anyone who can be helpul on this issue?
similar experieence
The ombudsman at Education actually helped me out on something similar (it was said I had signed onto a Loan Rehabilitation program--never did. The collectors said I had "accidentally sent" the form back to Education. After ombudsman intervention, out of the program AND the collectors have been removed from the case. I agree that an attorney will probably work better, but on THIS issue they did OK by me. (The experience of being lied to, that's another story...)
Posting forms under consideration...
We can't provide any advice potentially falling within the realm of legal advice to individual borrowers due to potential liabilities related to the unauthorized practice of law across state lines. However, your post has initiated a discussion regarding the possibility of posting a library of documents, including demand letters, that could be of value to student loan borrowers. The development of a forms download library may take some time to create, so in the short term you may need to either "wing it," pay an attorney to prepare and send a demand letter on your behalf, or (and this may be your best short-term option) search for demand letter forms that may be available for download from other websites and modify one or more of them to meet your needs. We will keep you posted regarding any future availability of documents for download.