DCS Inc. Collection Agency for Citibank

[Happy]

Geeze.
I owe quite a bit in student loans and just had my final decree entered on my Chapter 7 (@HHM, before you write anything, yes, I know they aren't dischargeable unless.. ).

Anyways, not two days passed since the decree was entered that I was contacted by an agent from someone who identified herself as an agent for DCS Inc. Collection Agency. She identified herself as Leah and came off a bit dim-witted. So, when she told me that I owed $20,000 *immediately* for a Citi student debt I hung up the phone and contacted Citi.

Concerned, I contacted Citi Student Loans and was told that this loan was, indeed, now rightfully being collected on by this agency. They (Citi) told me when your file BK7 the loans are AUTOMATICALLY defaulted on and go to collections. (I was 10 days late with a payment to them when I filed.) I immediately asked for a copy of the original promissory note in order to verify this (which I still have not received).

The Collection agent called again the next day and told me they were having a hearing re: the loan's collection status and they needed some financial info over the phone.

* I still have not received any paperwork from anyone stating a default or letting me know of the assignment to this collection agency (just a phone call)

* Collection Agent made it sound like there was a legal proceeding that was taken place without notice or ability for me to respond.

Anyone have any experience or advice with these a##clowns?

TIA.

[tiiger]

If this is the same dcs ran outta california then yes I have dealt with them. They are a@@holes 4 sure. Since u filled bk, legally they can't collect on ur student loans.....its called the automatic stay. Were u payin on them b4 u filled or were u in collections? I would talk to your lawyer about this.

[frogger]

They (Citi) told me when your file BK7 the loans are AUTOMATICALLY defaulted on and go to collections.

Mine didn't automatically default, however they were not with Citi. I actually had mine paid up a few months ahead, so a payment was never missed, and once discharged, the statements started coming again.

I have web-access to these accounts, still do, and everything is rosy.

[Happy]

@Tiiger. Thanks. Yeah, I'm past the automatic stay, and just received the "final decree" stating that it I've been discharged. So, the ppl that I still owe can come back after me. Yes, I was current (only 10 days late) when I filed. I was told on the phone (from Citi) that it was automatic when they received notice that I filed. Yuck.

@Frogger. Yeah, I have SEVERAL other loans, as does my wife. These loans are "small potatoes" in the total amount. The unfortunate part is that these were at a very low interest rate. I'm still waiting for a copy of the original notes.

I'm curious (and still waiting for the copies of the original note), does anyone know what the standard agreement is on these types of loans as to default? That is, do they tack on an extra percentage to the interest rate, or is it a percentage of the current due? How do they assess these fees, what is a good way to stop it? If I could magically come up with the money that I owe today, and pay in full, would there be a way to stop them from tacking on extra fees?

Strategies, anyone?

TIA.
(I love this forum)

[wonderingrov]

I would be interested in knowing the outcome of this one. I've got a consolidated student loan with The Student Loan Corporation (the student loan arm of Citibank). I actually still had the original promissory note, and pulled it out to read it a couple of weeks ago. On this particular promissory note, it did not state that bankruptcy put it into a default status. Under the section on defaulting, it did discuss the issue of being late could result in it going to default status. I haven't been late on a payment with them so far. I would be interested in seeing how this one turns out. To me, seeking $20,000 immediately seems unreasonable.

[Happy]

@wonderingrov. I'll let you know what mine says when I get a copy. I filed, along with my wife. We BOTH had (seperate) loans from Citi (Student Loan Corporation) - hers is showing as still in deferment. So, apparently, mine has been "automatically" sent to the collection agency of the guarantor, but not hers. I'm going to call again today to make sure those agreements are on their way.

[tiiger]

I would call and speak to a supervisor about a payment plan. There's no way possble 2 come up with 20,000 if u r bankrupt. Dcs is a joke. It all depends on who u speak with 2 get a common sense answer. Good luck.

[wonderingrov]

Hey Happy - I've pulled out my loan origination documents and gone over them with a fine tooth comb tonight. On mine, the only reference made at all to bankruptcy is that the loan can't be discharged in a bankruptcy. The only clause I can see in mine that they might possibly be able to use is one where it would be considered in default 'if I paid late OR if they had another reason to believe I wouldn't pay..."

I think I'm going to run this one by my lawyer - I've got an appointment to see him in a couple of weeks to go over some other questions anyway. I had been planning on trying to pay mine through the bankruptcy to try to keep everything on that current - I don't know if something like a reaffirmation might work. I'll let you know if I find out anything from that meeting that may help you.

What gets me is that yours automatically defaulted, and from what I read it looks like your wife's hasn't defaulted. That seems really odd - especially with it being the same company.

[Amy26]

I had student loans with Sallie Mae, Chase and Loan to Learn. When I went through the bankruptcy the loans DID NOT go into default they went into bankruptcy deferrment. My Chase student loans were in deferment already from still being in school but the bankruptcy caused them to come out of in school deferment.

You should not automatically get defaulted just because you filed. As soon as your discharged, they should come back into status and then you should start making payments on them again.

The bad news is there is no way around getting out of paying. You can make payments on them during the bk but its kind of a cumbersome process because they are technically not supposed to be collecting during the bk.

Citibank is just a nasty company when it comes to BK. But if you were only 10 days late on your payments before you filed I can't see why they would already have sent that into collections.

Were these private or federal loans?

[Happy]

@WonderingGov - Thanks, this gives me some hope, I hope my note is the same. Even if it is and they didn't have reason to do this, this situation might become (even more) unpleasant rather quickly.

@Amy26 - It stinks that we can't get rid of these in BK, but I'm past that. I just don't want to pay their lackeys extra money for defaulting. These were private loans.

[Happy]

You've got to love Citi. Contacted them twice about being sent my original promissory note(s), and they only sent copies of my signatures - without the terms of the agreement!

Have to call again. I'm assuming the agent(s) didn't understand me when I asked for the original agreement. It's making me wonder, though.

[wonderingrov]

You've got to love Citi. Contacted them twice about being sent my original promissory note(s), and they only sent copies of my signatures - without the terms of the agreement!

Have to call again. I'm assuming the agent(s) didn't understand me when I asked for the original agreement. It's making me wonder, though.

Yeah, the folks at Citi don't seem to be the sharpest tools in the shed. When I had tried to sign up for online access, it kept telling me my birthdate wasn't the one they had on file. I pulled out my original application, and I had given them the correct birth date when I applied. I called them up, and their records were 2 days off.

[Happy]

Spoke with Citi, and they blamed the automatic transfer on "United Guaranty Comm. Ins. Co. of North Carolina". They claim that it is in their agreement with this company, that as soon as someone files whose loan is guaranteed by this company, that they "must default" them.

The collection agency for the guaranty company is DCS or "Diversified Collection Services, Inc.". DCS is based out of Livermore, California and the caller identification of the collection calls suggest the same. Their toll-free number is 800-927-7667. Their site is http://www.performantcorp.com/ (I had a hard time finding this info based on the rep telling me that they are simply DCS.)

The representative from DCS whom was demanding payment, before sending out any paperwork in writing, is a "Leah Rhodes" of California. FYI, when I demanded proof of the transferred debt in writing, she claimed "we don't do that". Again, a bit slow. Nevertheless, a little over a week after that conversation, I did receive the paperwork and am now following up.

The 1page letter that I received from them includes the statement:

"Due to your failure to honor your obligation with your institition, the entire unpaid balance of your account has become past due and payable and your original repayment plan is null and void. IF allowable under the laws in your state of residence, your promissory note contains a provision to add the costs of collections to your balance. This may have increased your balance by as much as 20%"

Nice. It appears as if, even though you are not late with your payments, be prepared to have your student loan jump 20% if you file. (I'm still waiting on the arrival of that original promissory note.)

[wonderingrov]

I checked my original paperwork - looks like mine was guaranteed by United Student Aid Funds. From what I have been able to research, it doesn't look like the two companies are connected. It looks like United Student Aid Funds does offer a 'loan rehabilitation' program that will clear the default once completed even if it does default. I didn't check United Guaranty for information on loan rehabilitation - but this might be something you want to look into. $20,000 in one lump sum is a lot to ask - especially for someone who has just went through a bankruptcy. Seriously - the trustee looks at everything - even cash, during the process. If you had that kind of cash lying around, you can bet the trustee would take the vast majority of it.

[Happy]

Luck you! Yeah, I don't have much of a choice in the matter, they have to accept installments. You're right, I definitely don't have the cash on hand to make that kind of a payment.

What troubles me is that I think that they're saying that they automatically tack on that 20%. Sounds like a penalty to me, as opposed to a fair assessment of the damages that they'll incur as a result of my non-immediate payment. Hmm.