Student loan - collection agency (post-discharge)

[Hope2File]

I have a student loan through my school (a public University) that I owed a small amount on prior to filing BK (ch7) last year. About 2 months post-discharge I received a regular statement from the school and responded by paying 1/3 of the total balance. I never heard anything else from the school - no more statements or letters or anything. About a month after making the payment I received a letter from a CA claiming the debt had been referred to them, and listed an amount equal to roughly double the amount listed on the statement from the school (prior to me sending the payment).

The CA did have the loan prior to BK, but I never paid them anything. I was current on payments to the school up until about 9 months before filing BK.

Anyway - my #1 concern/question is whether or not the CA has the same rights as the federal government (these are not federal loans) for collection - ie garnishment without suing first.....

Another question I have is whether or not they can tack on what seems to be a 100% interest/collection fee. (Obviously they can tack it on but can they legally continue to collect it if I pay the student loan part only?) I have read conflicting info on this - but did find a web site that states collection fees may only be added if they were provided for in the original contract (which they were not) on private loans. But would this be considered a private loan since it is through a public school?

I'm a little confused. I know I need to take care of the student loan debt but I'd hate to pay their huge fees and then realize it was unnecessary. Thanks.

[KeithDoxen]

Anyway - my #1 concern/question is whether or not the CA has the same rights as the federal government (these are not federal loans) for collection - ie garnishment without suing first.....

Another question I have is whether or not they can tack on what seems to be a 100% interest/collection fee. (Obviously they can tack it on but can they legally continue to collect it if I pay the student loan part only?) I have read conflicting info on this - but did find a web site that states collection fees may only be added if they were provided for in the original contract (which they were not) on private loans. But would this be considered a private loan since it is through a public school?

If you are certain that these are not federal loans, then no, neither the CA nor anyone else can garnish without first getting a judgment. You've got all the rights that you would have against any other debt with the exception of the fact that you cannot discharge this debt in bankruptcy.

As to the interest and fees, they can pretty much tack on whatever they like. If you believe that the contract that you signed prevents them from doing so, then you should use that as leverage against them in your negotiations with them. If you offer to pay the original balance, they may even agree to knock off all or part of the interest and fees. It would be easier for them to cut a deal with you than to sue you.