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They would say, 'We don't care what happened with your son, you have to pay us'.
June 19, 2012 6:31 PM   Subscribe

A few months after he buried his son, Francisco Reynoso began getting notices in the mail. Then the debt collectors came calling. Now, he's suffering a Kafkaesque ordeal in which he's hounded to repay loans that funded an education his son will never get to use — loans that he has little hope of ever paying off. Despite the help of a lawyer, Reynoso has not been able to determine exactly how much he owes, or even what company holds his loans.
posted by unSane (59 comments total) 9 users marked this as a favorite

 
It seems to me that, if there is no clear owner of the loan, there is no one to pay. Maybe canceling this "homeless" debts will force the banks to actually keep records instead of just declaring that they are owed....
posted by GenjiandProust at 6:49 PM on June 19, 2012 [12 favorites]


Just to make one thing clear: he cosigned the loans.
posted by Chocolate Pickle at 6:52 PM on June 19, 2012 [7 favorites]


Is this something life insurance would've helped avoid?
posted by blaneyphoto at 6:52 PM on June 19, 2012 [2 favorites]


I once had debt collectors chasing me for a phone/internet bill I had disputed. It was fascinating that when I asked them to send me evidence in writing of the exact amount I owed, what it was for, and their chain of title, the calls stopped (but not before the guy on the other end completely lost it, threatened to ding my credit record, and hung up).

A few months later I got a check for $500 from the company I supposedly owed money too. Without any explanation at all.
posted by unSane at 7:00 PM on June 19, 2012 [34 favorites]


Everything else horribly wrong with this aside (the predatory lending practices, the ridiculous college tuition, the byzantine reselling of the loan) the lender should have to eat it from a totally capitalistic point of view - they accepted a co-signatory who obviously had neither the income nor the assets to handle the loan.
posted by Mitrovarr at 7:00 PM on June 19, 2012 [16 favorites]


Yes, when you cosign a loan, you are responsible for it. This is a shitty way for Francisco Reynoso to learn that.
posted by Sternmeyer at 7:07 PM on June 19, 2012 [8 favorites]


Also, if nobody is sure who actually owns the loans, what is stopping him from simply telling the debt collectors to go crawl off and die? They won't be able to take him to court without documentation. They can keep harassing him, but you can sue debt collectors who wantonly violate the laws about debt collection and harassment (it's pretty easy to collect evidence, after all). They might go after his credit, but you can live without that.
posted by Mitrovarr at 7:11 PM on June 19, 2012 [1 favorite]


Is this something life insurance would've helped avoid?

The son died a few months after graduation, still unemployed. Hardly anyone that age carries significant life insurance; in his circumstances he might have had trouble getting it even if he wanted it.
posted by gerryblog at 7:11 PM on June 19, 2012 [2 favorites]


blaneyphoto: it could help, yes - although it wouldn't help track down the chain of ownership (I have a feeling that would be clarified pretty fast if he was saying 'who do I give this money to', though).

even after Reynoso hired an attorney, he said they continued to call him every day, several times a day, for about a year and a half:

That said, I don't understand this scenario exactly, sounds like they are violating several of the federal debt collection laws. If nobody can tell him that they are the ones he owes money to, nobody has the right to chase him for it. Does his lawyer suck? Why doesn't he change his phone number and tell them to get fucked?

Seems like it would be easy enough to dispute this on a credit report, even - nobody is sending validation papers for the debt anywhere, so the agencies have to take it off.
posted by jacalata at 7:15 PM on June 19, 2012


The notion of student loans not being something you can declare bankruptcy on makes plenty of sense for the borrower, when they do at least cancel on death of the person they apply to. That private loans can be non-dischargeable *and* still persist even after the death of the student is just ridiculous.

That said, something doesn't make sense to me, here. Both that they continued calling him so long after he had an attorney, and that he couldn't actually find out who they were? Who was he supposed to write a check to if they wouldn't tell him who they were? The fact that they can't find the chain of assignments is meaningless. That's not the debtor's job to prove.

His attorney seems to have done a pretty sorry job, in that circumstance, of gathering the required information to just make them leave him alone, and it seems like there's a non-zero possibility, given the lack of information and the chain of assignments, that a perfunctory attempt at defense would have yielded a judgment in court that was a lot easier for this guy to pay than whatever they were originally trying to collect, if they were able to actually win a judgment at all.
posted by gracedissolved at 7:15 PM on June 19, 2012 [7 favorites]


Any AskMe that includes the phrase "Should I co-sign a loan for..." should automatically link to this post. Should I make this a MeTa pony request?
posted by TedW at 7:16 PM on June 19, 2012 [1 favorite]


I think it's pretty unfair to blame the father for this nightmarish situation. Student loans through the Department of Education are discharged if the student in question dies or becomes permanently disabled. Apparently, it's loans through private lenders that are impossible to discharge, which is total bullshit. Clearly this man wasn't expecting his son to die, come on. It was a chance for a better life for this kid and his family.

I remember signing my paperwork for student loans at age 18. I had no fucking idea what I was signing, no one took the time to explain any of it to me. All I knew what that I had to sign the papers to go to college. I didn't hear shit about them again until two weeks before graduation when the financial aid office put them in front of me again, showing me my signature from four years earlier and telling me how much I owed. I was lucky, it wasn't too bad, but I was still shocked. This was in 2001 and the amount I owed was nothing like the loans many kids with my financial situation take out today.
posted by Aquifer at 7:20 PM on June 19, 2012 [24 favorites]


"Should I co-sign a loan for..." should automatically link to this post.

That's funny, but unfair. For many students ineligible for government loans (often due to a part time job), it's either get a cosign, or don't get an education.
posted by Popular Ethics at 7:24 PM on June 19, 2012 [11 favorites]


Yeah, this can't be the whole story. If the collectors won't give him detailed information--in writing--about how much he owes, then he shouldn't pay them a dime. And if his lawyer is not advising him to do so, that is one shitty lawyer. Any mefite lawyers want to do some pro bono work and help this guy out?
posted by zardoz at 7:24 PM on June 19, 2012 [1 favorite]


I took a Lexus-sized loan to pay for my overpriced private education-- parents co-signed but were smart enough to take out large life insurance on me in case I got hit by a bus. It was super cheap and even still would pay out if I had jumped off a bridge after graduation when I couldn't find a decent job.

Current life goal: pay off debts before I die, even if they would be paid off (with a lot to spare-- apparently life insurance on a healthy, young kid is absurdly inexpensive so they went all out) when I bite the dust. Debt is slavery. I want to die free.
posted by kmay at 7:28 PM on June 19, 2012 [2 favorites]


I'm sure his lawyer is telling him not to pay until it's clear he actually owes (and who). That doesn't stop collectors from calling which is annoying enough when you're not grieving a dead son.
posted by R343L at 7:29 PM on June 19, 2012 [1 favorite]


Who was he supposed to write a check to if they wouldn't tell him who they were?

I believe he'd write the check to ACS, the servicer. They don't own the debt but are authorized to collect the payments. Of course, he's had trouble getting them to respond to inquiries, too, but it's clear at least that they are the entity that deals with the payments.
posted by devinemissk at 7:34 PM on June 19, 2012 [1 favorite]


If the collectorswon't givehim detailed information--in writing--about how much he owes, then he shouldn't pay them a dime

Trust me, as someone who has had to deal with debt collectors, you can be the nicest person alive while writing a check out that includes the past due, and the collectors will still not give a shit about being reasonable. You could probably ask them straight up while giving them cash in hand and I wouldn't doubt they would still try to intimidate you out of habit.
posted by Rocket Surgeon at 7:35 PM on June 19, 2012 [2 favorites]


I suspect the problems are:
1. Debt collectors are notorious for ignoring the laws because they mostly get away with it. If they get caught they can fold their boiler room and start a new company.
2. Figuring out who owns the debt probably is short hand for actually figuring out who can and will negotiate to resolve the debt. I doubt it is bad lawyering, it is just typical stonewalling by banks.
posted by humanfont at 7:40 PM on June 19, 2012 [8 favorites]


That's funny, but unfair. For many students ineligible for government loans (often due to a part time job), it's either get a cosign, or don't get an education.

Well, that's the way cosigning works; the cosigner has to pay the debt if the original borrower can't. I wasn't trying to be funny, but to point out a fact that a lot of people who consider cosigning ignore at their peril. Having said that, I think it's shitty the way this guy has been treated; it wouldn't hurt the bank's bottom line to show a little compassion.
posted by TedW at 7:45 PM on June 19, 2012 [1 favorite]


Well, TedW, think of the moral hazard - if people find out they can get out of student loans if their children die, it'll be anarchy.
posted by gerryblog at 7:51 PM on June 19, 2012 [30 favorites]


And to address the second part of your statement, I agree that it is unfair that for people in certain income brackets, the only way to fund higher education is via the legalized loan sharks that certain parts of the financial industry have become.
posted by TedW at 7:52 PM on June 19, 2012


There MAY have been a time when such practices would have been frowned upon. However, the current mode of operation and common business practice is, "Fuck You! Pay me!"

This reminds me of a recent story in which a girl was set on fire at a gas station. She was in the hospital and didn't remove her car from the property and was charged for towing fees etc.

REALLY? Who is not fucking man or woman enough to simply fucking wave charges in light of situations like these? REALLY? The bottom line is going to be THAT fucked by having some compassion?

Fuck this business model. Fuck what corporations and their attitudes towards individuals have caused in the last 20-30 years.

It isn't civil, it isn't moral and it isn't ethical unless it's done by a business with 110% or more profit margins with 20% of that going to a CEO.

Fuck the corporate models of business.
posted by snsranch at 8:00 PM on June 19, 2012 [51 favorites]


Is this something life insurance would've helped avoid?

The son died a few months after graduation, still unemployed. Hardly anyone that age carries significant life insurance; in his circumstances he might have had trouble getting it even if he wanted it.
posted by gerryblog


Yep, it was just a question... I was quite well insured even at that age, so its not unheard of (although perhaps unusual).
posted by blaneyphoto at 8:07 PM on June 19, 2012


A couple of quick datapoints from the article - the father made $21,000 in 2011. Apparently UBS extended nearly $160,000 in credit to Freddy Reynoso, and projected that if he made all payments as scheduled, the loan for his music education would end up costing him $279,000.

The school - Berklee College of Music in Boston.
posted by ianhattwick at 8:32 PM on June 19, 2012 [1 favorite]


REALLY? Who is not fucking man or woman enough to simply fucking wave charges in light of situations like these? REALLY? The bottom line is going to be THAT fucked by having some compassion? Fuck this business model. Fuck what corporations and their attitudes towards individuals have caused in the last 20-30 years.

It's not a business model It's automation. In the example you gave, chances are that nobody at the towing company understood what had happened; to them it's just another abandoned car. OK, you could call up and explain (and often this works), but on the other hand if you work in towing or repo or some similar area chances are that you hear bizarre and frequently fictional excuses day-in, day-out.
posted by anigbrowl at 8:35 PM on June 19, 2012 [3 favorites]


Apparently UBS extended nearly $160,000 in credit to Freddy Reynoso, and projected that if he made all payments as scheduled, the loan for his music education would end up costing him $279,000.

This is really about the debt/death issue, but damn that is an expensive education. For that money you might be better off hiring your own personal tutor for 3-4 years.
posted by anigbrowl at 8:37 PM on June 19, 2012 [1 favorite]


Trust me, as someone who has had to deal with debt collectors, you can be the nicest person alive while writing a check out that includes the past due, and the collectors will still not give a shit about being reasonable.

It's not about being nice, it's about showing some documentation. If the agencies can't do that, then why should this guy (or anyone else) pay them a dime? Put it this way, if he defaults on the loan and the company takes him to court, tries to garnish his wages, they have to show the judge documentation. And if they can't do that, then they have no case. This guy can tell 'em to take a long walk off a short pier.

Reminds me of the story of people delinquent with their home mortgages. The bank wants to foreclose, but the owners challenge the bank on who exactly owns the house. The house's mortgage has been bundled up and resold and the true ownership is something the bank can't prove, so the homeowners end up with the house. Doesn't happen often, but it does happen. Companies like this depend on making people really afraid; if they challenge the creditors in a smart manner, they could fold like a house of cards.
posted by zardoz at 8:42 PM on June 19, 2012 [7 favorites]


Thisguy can tell 'em to take a long walk off a short pier.

You kind of missed my point. He could do or say whatever, the collectors could give a shit and will keep bugging him regardless.
posted by Rocket Surgeon at 9:09 PM on June 19, 2012 [2 favorites]


Really though, once you have some experience with collectors this type of story is totally unsurprising in the least.
posted by Rocket Surgeon at 9:12 PM on June 19, 2012


This is obviously a tragedy, and my heart goes out to this man. Nevertheless, I can't help feeling like we're not hearing the entire story.
posted by wolfdreams01 at 9:15 PM on June 19, 2012 [1 favorite]


The house's mortgage has been bundled up and resold and the true ownership is something the bank can't prove, so the homeowners end up with the house. Doesn't happen often, but it does happen.

For those interested, I found Mortgages Lost in the Cloud quite informative:
Titles and mortgages on real property are officially recorded in county clerks' offices, a slow-moving, old-fashioned, deliberate world of ink, paper, and filing cabinets. The process has been perfected over a millennium, going back to the Domesday Book, the survey of English property completed in 1086 for William the Conqueror. This paper-based system, though admirably accurate and permanent, wasn't equipped for the era of rapid-fire refinancing and securitization. When over 8 million new and used homes are sold per year, as at the height of the boom, and most loans are packaged into securities, you need a lot of clerks.

The mortgage industry responded to the scale and speed of the modern housing market by creating an electronic overlay called Mortgage Electronic Registration Systems (MERS) in 1997. MERS, however, lacks the thoroughness and—more important—the legal standing of the old system. Some judges have rejected foreclosures based on MERS when the party claiming to hold the mortgage couldn't produce the note to prove to the court's satisfaction that it was in fact the creditor. The courts want to see paper.
There is more at that link, so read the whole thing.
posted by vidur at 9:21 PM on June 19, 2012 [4 favorites]


Probably time to up my life insurance policy.
posted by CBrachyrhynchos at 9:31 PM on June 19, 2012


That private loans can be non-dischargeable *and* still persist even after the death of the student is just ridiculous.

The only reason it persists is because it wasn't just Freddy Reynoso's debt; his father was jointly and severally liable. If the debt had been Freddy's, and Freddy's alone, there's no way the creditor could have gone after his parents for a single cent.
posted by one more dead town's last parade at 9:32 PM on June 19, 2012


Just so we're all clear, this type of debt and the way you handle and go about paying it is totally a different and separate mutually exclusive type of debt from mortgages.
posted by Rocket Surgeon at 9:36 PM on June 19, 2012


Another example of people being ill-prepared to take on financial responsibilities beyond their means. I truly sympathize with the parents in this case. Navigating the world of student loans is difficult for students and parents alike. Kids are not given proper education about loans, and even if they do vaguely understand the concept, many feel it is their only option to get an education (in order to get that shiny, well-paying dream job everyone keeps promising them). The reality is tough and it absolutely crushes kids who are already trying to find a means to make a living.

The fact that private student loans cannot be discharged in bankruptcy or upon death is ridiculous. The reason why credit scores, co-signers, and interest rates are assessed is because of the inherent risk. If banks issuing private student loans are receiving this 'protection'--what is the risk for them? Why are they allowed to require a co-signer or assess interest rates that far exceed those assessed by the government? If the answer is because they are -private- student loans, then my retort is that they should be treated as any other -private- debt then.

But this goes far beyond just student loans. Predatory lending. Overpriced education. Shady rotation of loans to different lenders. Lack of compassion or reason. There is something seriously wrong with the system---the promises and mantra of the older generations about getting an education to realize the 'American Dream' seems like nothing more than taking advantage of the young and naive to pad retirement accounts. It's sabotaging our future.

The more people come together to end practices like these, the better off we'll be. Every single person who says "not my problem/why do I have to pay" has, at some point, benefited from living in a society. And part of living in a society is contributing to it so that others can succeed. When others succeed as well, then society becomes stronger. The 'me' mentality needs to end--it's destroying us.
posted by stubbehtail at 9:37 PM on June 19, 2012 [13 favorites]


From the link within the article it seems that if Francisco actually manages to get a hearing he would actually have a pretty good chance of getting a hardship exemption for declaring bankruptcy -- not just because of his income, but because "a number of courts have granted discharges in cases where the borrower did not benefit from the education". I hope he gets it. (Of course I'm not a lawyer or a banker - does anyone know more about hardship exemptions?)
posted by en forme de poire at 10:03 PM on June 19, 2012 [1 favorite]


There's almost a trillion dollars out now in student loans. It's easy to say, "Damn, big bad banks, they should just forgive those loans." But it isn't the bank's money. It's their depositers' money. It might be your money.

The problem with a student loan is that there isn't any collateral. From the point of view of the lenders, the nightmare scenario is that the student borrows a pile of money, goes to school, and then the day after graduation he goes and files bankrupcy. Why would anyone be willing to make loans like that?

They wouldn't. That's the reason Congress (in its less-than-infinite wisdom) made it so that student loans can't be discharged in bankrupcy. But that leads to the opposite problem: there are now millions of people in this country who are effectively bankrupt but who can't escape from their debt.

The problem could have been, and should have been, solved a long time ago. But it wasn't, and now we are between the horns of a dilemma. Three horns, basically. There are only three ways out that I see:

1. Stay with the status quo. That means millions of people caught in a financial trap. Mostly young people, who won't be able to buy homes or start families. The long term financial and demographic consequences of this will be catastrophic, but that won't happen before the next election.

2. Permit everyone to get out from under through bankrupcy. The banks take a bath. A lot of them become unstable. A few fail. Bank runs. A new recession. Maybe an outright depression. Lots of people (mostly older) become impoverished because their savings are gone.

3. The US government pays for it all. A trillion dollars is added to the national debt. Which is already much too great, and it could lead to a tipping point where the interest on T-bills starts rising rapidly. This one is even more impressive: it could lead to the Fed financing it by running the printing presses, leading to hyperinflation and the destruction of the currency. The last time a major world power's currency was destroyed this way, well, it was Weimar Germany...

It's a hell of a mess, and I sure don't know what the solution is. No matter how it's resolved, someone is going to get the shaft. A whole lot of someones. You and me.
posted by Chocolate Pickle at 10:59 PM on June 19, 2012 [7 favorites]


I don't think your three extreme scenarios need be the only options, Chocolate Pickle. For one thing, it would hardly dent the overall situation if the few rare deaths of student loan recipients meant their debt was cancelled.

Nor does bankruptcy always mean the creditor loses the entire stake. Very often lenders take a "haircut" and still get the bulk of what they are owed from either the sale of a debtor's assets or a Chapter 13 repayment plan. There is an elaborate and proven process by which classes of lenders jointly agree to take, for example, 60 cents on the dollar to permit a bankruptcy. Creditors are not without tools during this period and while the judge has the ultimate say, lenders can refuse to endorse a plan they don't like.

Finally, there are other ways in which bankruptcy rules could be tweaked to eliminate those gaming the system by running up debt and walking away. Current bankruptcy rules prevent repeat filing by default, although case law varies across the country and many judges are deferential to the rights of debtors to at least try to repay. Similar lockout rules for student loans -- say, seven years from the date repayment begins -- would certainly allow a handful of determined people to eke out a minimum-wage existence and then walk away, but would be a long enough stretch that the great majority would remain "in the system".

To speak to a few comments up above: once a bankruptcy is filed an "automatic stay" kicks in, which puts creditors under the scrutiny of a federal judge should they violate no-contact rules. It is also a requirement that lenders submit to the court paperwork proving the money they are claiming is valid and they are entitled to get it back. For Reynoso, at least, those two provisions would ease his stress and remove the burden of proof from his shoulders.
posted by dhartung at 11:21 PM on June 19, 2012 [4 favorites]


Permit everyone to get out from under through bankrupcy. The banks take a bath. A lot of them become unstable. A few fail. Bank runs. A new recession. Maybe an outright depression. Lots of people (mostly older) become impoverished because their savings are gone.

Corrected for unfounded speculation, and I am also levying a 60 point penalty for the starving old people imagery. Also, we're still in a recession, it seems to me, by any rational, non 1%-er measure.
posted by maxwelton at 12:16 AM on June 20, 2012 [4 favorites]


How about making private loans dischargeable through bankruptcy, but federal ones not dischargeable*? That way, the onus is on the banks to do due diligence before lending.

*still retaining the income based repayment plan, etc.
posted by oceano at 12:51 AM on June 20, 2012


"This is really about the debt/death issue, but damn that is an expensive education. For that money you might be better off hiring your own personal tutor for 3-4 years."

What baffles me is that Berklee's tuition is about 35K a year (at two semesters a year, not three). Housing looks to be about another 15K. So, let's say a total of 60K a year with other costs included. So the private loans for the child of a man who makes only 21K a year accounted for two-thirds of his educational costs (assuming he completed his degree in four years, which perhaps he didn't).

That's some really shitty financial aid there. I don't understand it. If this is correct, Berklee should be ashamed.

But with regard to your main point, I have to at least partly disagree.

I do agree that educational costs have risen far too high, and too rapidly. I went to St. John's College twenty years ago when it was among the most expensive liberal arts colleges (but not in the top ten, I think) and it was 28K a year for tuition then. Now, I think it's 44K, which is considerably more than Berklee's. And there's still quite a few liberal arts colleges that are more expensive.

I think that SJC is worth it, but I can see why someone would disagree. It's not a vocational school and to the degree to which you think college is vocational preparation will make a big difference in how you judge on that matter.

But I think maybe most people here aren't aware that Berklee is pretty much one of the two best, or most prestigious, music schools in the US. I guarantee that students there are getting the equivalent and much more to the hiring of a private music tutor for four years. Much, much more. They're getting instruction that is as individualized as a private tutor's, as well as everything else a top music school can offer in terms of the top teachers and collaborators.

If you don't see the primary value of education as being necessarily vocational and measured in dollar amounts, then such a high quality education is very convincingly worth that much money, assuming that one values music and musicianship that highly.

And, in contrast, if one does think in terms of vocational educations, well, the thing is this: a music education almost anywhere has little vocational value. I can say this as someone who was (briefly) a music major right out of high school. You don't need a music degree to get most kinds of work in music (though there are a few notable exceptions). But a Berklee education? Most of their graduates will get jobs somewhere, somehow, in music. They may not make much money, but then most musicians don't. And they may not get the jobs they want. But that education does mean something unusual. And if I were the caliber of musician, or the parent of someone who was that caliber of musician, to be accepted to Berklee, then I wouldn't hesitate going to school there or sending my child there. I mean, I believe passionately in my education at St. John's and think it's unequaled and basically unique in the US. But I'm inclined to think the case for a talented musician going to Berklee is a considerably stronger case, even given its high cost.
posted by Ivan Fyodorovich at 12:56 AM on June 20, 2012 [2 favorites]


Ideally, we should make private student loans dischargeable through bankruptcy, forbid cosigners on student loans, and void existing cosign arrangements. All this helps squeeze the exploitive for-profit degree mills, like University of Phoenix.
posted by jeffburdges at 1:20 AM on June 20, 2012 [1 favorite]


I remember reading an article a while back about a fellow who made a decent living out of running up small debts, waiting until debt collectors contacted him, then suing those debt collectors for their many and varied breaches of law (and getting his credit record cleaned in the process, so that he could continue the practice). Francisco needs to meet that guy, or any of numerous others who have turned messing with debt collectors into a business model.
posted by aeschenkarnos at 1:21 AM on June 20, 2012


One of my best friends works for a collections organization, he sells debt collection services to various people; he's sold a lot of doctors, and dentists practices, and oil change places, and people who would sell to doctors, dentists, mechanics, and anyone else, from the smallest companies to the largest, and he'll sell them varying different levels of service -- do his clients want him to go all the way, ALL facets of their collections, or just part way; you'd be surprised how much there is to this. It's a good gig, and it's not a bad thing, really; people do get stiffed, each and every day, and they want a way -- need a way -- to get the money which they are owed, and he gives them this. Um, no -- he *sells* them this.

It's been interesting, over the years, to hear his stories of how it works, from the inside. One thing that I find particularly interesting is how the collections guys/gals work, the methods they use, how close they come to the line of the law, how intimidating it can be even if they stay right on the good side of the law, right on the edge. And they do, his company anyways; it's a large company and can't be playing around, they run to the edge and live there but they don't go over it.

But just like cops get you to give up your privileges -- in fact, get you to waive your *rights*, a whole different animal from privileges -- just like cops get you to do what they want by asking all kinds of questions in such a way that they sound like orders, because they're leaning into you and yelling and mad and you're all "Okay, yeah, search my bag!" "Okay, yeah, come into my home!" -- well, just like those cops and their methods, these collection guys have similar methods. And they get very, very good at it.

They're paid to be pricks, it's part of their job, same as cops.

They are not going to quit calling you until you tell them to do so, and that dependent upon what state you live in. (US centric but I'd bet it's similar in Canada or OZ or England, though probably it's metric or something, and upside down in OZ.) It might be that you need to send them a letter to make it stop, might be that a call isn't enough. To cover your butt you'd maybe send it registered mail -- people often pay more attn to that. There are so many things that you can tell them to do, and they must do them. Still, they can't call after 9PM maybe but they'll call at 8:55, for sure; they can't call before 8AM but they'll call at 8:01.

If you live in Texas, after a few calls from them it'll stop, and it'll just be letters from then on, but it's up to you to make that happen. Texas isn't the only state like this; it's up to you to find out what your state will give you, what it will give them.

What's really comical is that they play good cop / bad cop, and they play it well: A collector will *really* wind someone up (um, someone who is unwise enough to speak with them for more than a minute, someone unwise enough to allow their emotions to get caught up, because if you are fool enough to allow your emotions into it then you will lose, you might not lose the war but you've lost that battle, no way round it -- these people are master fuck-face psychologists, they're trained to be master fuck-face psychologists, and they are), then finally the person might insist upon talking to someone else, or maybe the collector will say "Hey look -- Forget it. Here's my supervisor. Talk to him." and the fool will be on hold for however long, stewing, the collector goes and gets a coke maybe, and a snickers bar, or freshens up his coffee, and then that same collector gets back on the line using a bit different voice, and he'll do good-cop, agree that "I'm so sorry; that guy is so often wrong, and I'm looking into taking steps here to resolve that, and blah blah blah but let's make this work now." and offers the guy the same deal, or worse -- isn't that just the best?!? A real knee-slapper, or was to me anyways.

These people are not all of them hemorrhoids, any more than all musicians are broke bums trying to marry your kid or all shrinks insane; over time, yeah, they probably become more their job, same as a carpenter would have rough hands, a barkeep have knowing eyes, but still. They follow sports maybe, or knit, they joke around between calls, drink coffee or cokes, the old-timers give the newbs advice, same like real people would, at night they go home to the same shitty marriages as everyone else does -- it's just another job. But still, to me, outside, it's very interesting to hear about.

Some of the privileges -- not rights, which are granted, but privileges -- some of the privileges that we have, we just don't know what they are, and we don't use them. This guy does not and is not. I do not know what his local laws are but this jive, he can likely bust this jive down, esp since he's got an attorney on his side, provided the attorney is awake at all. This guy might be on the hook for the debt but can likely make the harassment go away.

I'd bet ... hang on a second, brb. Okay, back. I've got 640 bucks right here (cash from vacation, gotta get to the bank) and I'm pretty sure I've got 41 dollars in my wallet over there (I'm not going to go look; take my word), I've probably got 15 bucks in quarters in my pickup (quarter-car-wash, buy sodas, etc and etc) and probably another ten bucks here and there in change. Plus I've a card in my wallet that I use at a local coffee shop -- each time you (I) buy a drink they punch it, get ten holes in it and you get a free drink; I've got one that's all punched up and another one about halfway there. I'll bet all of that, and more, at whatever odds you want, that Matthew could help this guy, and would help this guy, would tell this guy exactly what he can do, and how to stop this harassment. And I'd win, in a walk.

But here's the news -- this guy doesn't need to talk to Matthew to find out what Matthew could and would tell him. It's all as close as an internet connection, close as a search engine. It's all there. He might -- might -- need/want that attorney to help him understand it, and to respond to it; likely he does not, unless he chooses to take action(s) against these people harassing him, which he can do if they are stepping over the line(s). Though of course anyone who reads here at Metafilter knows he doesn't need an attorney for that, we've all seen the stories of people making a living at suing these people, the ones who step over the line. But maybe this guy doesn't read Metafilter; a sad life.

Regardless Metafilter or not, I really can't get my head around how anyone could not get the idea of a new phone number -- that's a piece of cake. And if you don't want your old number to die just dump it into a vonage acct, the cheapest they've got, check that voicemail when you want, tell your family/friends your new number and -- BING BING BING !!! -- all better. So maybe this guy is not a man of the (our) world but if that attorney can't tell him this, and how to do this, then he's brain-dead.


Since watching what's happened these past five years or eight maybe, how our govt and the banks give each other anything and everything every day all day long while we're out in the cold -- I've finally opened my eyes. Also opening my eyes is seeing good people losing pensions they've worked long years for, and people who can't see a damn doctor or a dentist, and people who will literally friggin' die because they can't see a damn doc and get help and treatment that is right there -- hey, I have an entirely different take on most all matters financial, now. I now see it as it really is, not how I thought it was, not how I'd not seen it for many years, all of my life, really -- that I'm supposed to play ball while I'm getting hosed, that you're supposed to play ball while you're getting hosed, that we're all supposed to feel bad if we don't go along with vile, disgusting laws written by vile, disgusting people.
Um, vile disgusting people who always seem to have plenty of laws -- and plenty of money, too -- to bomb poor brown people, to destroy their culture and kill them and steal their oil; I just somehow always remember that part, too.

The blinders have dropped though, now. Guess what -- these are just contracts. All this trash with banks, all of it? Contracts. Pieces of paper. That's all. Business agreements. Our job is to take care of ourselves. Period. Screw banks. They will certainly beat on us, any time of the night or day, they'll do so with a smile on their face, a song in their hearts. Fuck. Them.

If there is any way at all, bail out. Bail. Out. Not for ten bucks, and not on A Real Person who you owe, and not on the phone or utility company, goods and services they've provided, blah blah blah. But someone really hosing you, the way this guy is getting hosed? Bail. Out. Oh, it's going to ruin your credit? Pffft -- buy a new car, then bail. All of this credit crap is designed to keep us good little citizens, ready and willing to jump through any hoop held out to us. You know what it is, what it really is? Numbers on a piece of paper. That's it. Little bits of ink splattered on flattened, bleached bits of trees. In fact, today it's not even that -- it's zeros and ones on some server somewhere, it's bits and bytes flipped this way or that and showing up on the screen of some clerk somewhere and talking to you on the phone. They might be a glorified clerk, they might have a title -- do you have any idea how many vice presidents there are at any bank? I've worked at a bank, and so have friends of mine, you can't fart loud in any dept at any bank without at least two vice-presidents hearing it, straightening their tie, standing up (in their cubicle -- duh) and looking around, trembly and frightened -- was it something they did, are they going to get A Bad Box checked on their next review? Christ. So anyways, you might be talking to A Glorified Clerk but if they're talking to you on the phone about your credit numbers they're just a mope, same as you are, Vice President or not.

You don't think anyone with real wealth is worried any time any of his/her ventures go south -- not at all. Whoops, a bad business decision, let's cut that company out, gut it then bankrupt it. Do you think they will ever -- ever -- worry about being harassed like this poor guy? Not in a billion years. It's a fixed game, and it's our job to take care of ourselves.

It's our job to take care of ourselves.


Student load organizations are the worst. Okay, not the worst -- hello Chase et all -- but they blow. In the late 90's, when I was suffering under that debt, I'd call them, again and again, I was persistent as hell, I held through all their goddamned menus and waits on the phone, sometimes to be hung up on before getting to a person and start again. Then, finally, get to a person -- but that person would not give their name, or anything else, absolutely would not give an email address -- nobody, but nobody, would give an email address, because then you had an easy way to show that they are fuck-faces playing horses-ass games -- these people flat would not give any way to substantiate the conversation we were having, the agreement we've just come to.

And so then the letters kept coming from those sick pieces of shit, and every one had new fees and different amounts and on and on. All of this regardless TONS of registered letters -- whirlwinds of them; I can be awfully determined when I get angry -- and tons of phone calls, and demands, and pleas, and on and on.

None of it mattered, none of it, they do what they want. And I'm persistent. Man.

One of the very best things about saving the world from Y2K was that it gave me the bread to pay those sack of shit bastards off -- sending that check in late 1999 with Paid In Full in the memo line was the best.


Another of my best friends is in debt -- student loans -- over a hundred grand. I don't ask her how much over a hundred grand, it's painful for her, it's a millstone 'round her neck and no way out and we're not kids, either. At least she's able to use it, the education -- having that damn PhD opened up so many doors so fast, made our heads spin, pretty amazing -- at least she's able to use it to help pay for it, and pay for a life that is pretty damn good, some of the externals I mean -- nice little house, almost new car, lives in a town she loves, pets her dogs and cat, etc and etc. But -- there is no taking a year to travel, or even two weeks, really, there is no taking any time for anything; it's got her by the throat.

She did agree to it all, and she knows it, and cops to it when we talk about it, which we mostly don't. Getting that degree was the only way she could get into the position she is now in; she's been in the helping professions for years, but now placed highly enough to effect deeper change, to bring about her vision, which is a damn good one. She loves to help people, she does help people, she's awfully good at it; having not come from piles of bread, the only way to get the education she needed to get where she is -- student loans.
ROCK -- > Tina is here < -- HARD PLACE


Did you know that in Denmark the govt will pay for your education, just as far as your brain and your determinations will carry you? And so let's say that you start off and don't like the field, it's not a fit for you -- the govt in Denmark will foot the bill for you to try FIVE TIMES! Isn't that just just the best? If only those wacky socialists had Freedom Fries...
posted by dancestoblue at 2:42 AM on June 20, 2012 [18 favorites]


His attorney seems to have done a pretty sorry job, in that circumstance, of gathering the required information to just make them leave him alone, and it seems like there's a non-zero possibility, given the lack of information and the chain of assignments, that a perfunctory attempt at defense would have yielded a judgment in court that was a lot easier for this guy to pay than whatever they were originally trying to collect, if they were able to actually win a judgment at all.

Yeah, I don't really understand what's going on. He's not only hired an attorney, he's filed for bankruptcy. The debt collection agencies shouldn't be contacting him. There are facts here we aren't getting.

It occurs to me that his lawyer may well be working pro bono, which would explain some of the seeming lack of vigorous representation. But still. Something's funny.
posted by valkyryn at 3:37 AM on June 20, 2012 [1 favorite]


> That said, something doesn't make sense to me, here. Both that they continued calling him so long after he had an attorney, and that he couldn't actually find out who they were?

[...]

> Yeah, I don't really understand what's going on. He's not only hired an attorney, he's filed for bankruptcy. The debt collection agencies shouldn't be contacting him. There are facts here we aren't getting.

It's like the last four years of financial crash never happened.

It's like the dozens of stories on Metafilter on similar subjects never appeared.

This is the same industry that invented the NINJA loan, that overstated its value by over a trillion dollars; the same banks that regularly try to get people evicted from houses that they don't actually have title to.

And this is an industry that did not make any real attempt to rehabilitate itself after all this criminality and unethical and unprofessional behavior was revealed.

Of course they are going to do illegal things, particularly small illegal things like harassing mortgage holders, that they can't get in trouble for. (Their reasoning, "If we didn't get in trouble for looting the US Treasury, we're not going to get in trouble for harassing people, particularly not some weepy old wetback.")

The manufactured disbelief that this, the most corrupt of industries, could somehow be doing something unethical! "Something's funny"! At this point, I'd be surprised if we had a news story about a loan firm that wasn't doing something illegal.
posted by lupus_yonderboy at 4:16 AM on June 20, 2012 [4 favorites]


For me the real story here isn't the debt. It's the complete fucking insanity of healthcare and education costs in the US. But even that isn't the real problem.

The real problem is this: the system isn't broken; the system is working perfectly.

It's designed from top to bottom, in every conceivable avenue of life, to transfer wealth from ordinary people to corporations.
posted by unSane at 4:44 AM on June 20, 2012 [8 favorites]


dancestoblue: "Did you know that in Denmark the govt will pay for your education, just as far as your brain and your determinations will carry you? And so let's say that you start off and don't like the field, it's not a fit for you -- the govt in Denmark will foot the bill for you to try FIVE TIMES!"
Er, what? Where do you get the "five times" figure from?

There's no tuition fees in Danish universities for EU citizens and Danish citizens (plus some other groups, mostly EU nationals who have been resident and working in Denmark for a period, or their children) are eligible to receive student support to the tune of 1000 USD less tax per month for 70 months. On top of this you may loan a further 500 USD/month from the state while you're receiving student support. The interest rate while you're still in university is 4% with no compound interest. There is no limit to how many university programs you can enroll in (well, only one at a time) but if you already have a degree you will be put at the back of the line, and you will only ever get a maximum of 70 months of student support.

Social democracy. It works.
posted by brokkr at 5:14 AM on June 20, 2012 [2 favorites]


From the link within the article it seems that if Francisco actually manages to get a hearing he would actually have a pretty good chance of getting a hardship exemption for declaring bankruptcy -- not just because of his income, but because "a number of courts have granted discharges in cases where the borrower did not benefit from the education". I hope he gets it. (Of course I'm not a lawyer or a banker - does anyone know more about hardship exemptions?

IANAL, but my understanding is that the so-called "undue hardship" plea hardly ever works in practical terms. Someone who knows the law can correct me if I'm wrong, but you'd have to be practically in a coma or days away from dying (with proof) before any bankruptcy judge would discharge a student loan debt due to undue hardship. The 2005 bankruptcy law (co-sponsored by Iowa senator Chuck Grassley and Wisconsin representative James Sensenbrenner) made sure that it would be practically impossible to discharge any student loan in bankruptcy proceedings, private or not, for any reason.
posted by blucevalo at 6:10 AM on June 20, 2012


"Something's funny"! At this point, I'd be surprised if we had a news story about a loan firm that wasn't doing something illegal.

You misunderstand me. I fully expect them to act like scumbags. But even scumbags tend to change their tune when the target is represented by counsel, and an attorney who is vigorously working the case has significant power here. You can totally bring an action against these guys. A really aggressive attorney would file a FDCPA action for $1,000 for each and every communication. If you win, you get attorneys fees too, so it's not like this is going to cost the plaintiff-debtor anything. The courts are pretty good about this sort of action, as it turns out.

So yes, there is something funny going on here. The way I figure it, all of this happened before he hired an attorney, and the bankruptcy filing is mentioned only in the last paragraph of the article. Way to bury the lede. So the real message here is not so much "Debt collectors are scummy" as it is "You need to get a lawyer sooner rather than later."
posted by valkyryn at 6:15 AM on June 20, 2012


The senators sucking up to Merrill-Lynch's CEO shows how disconnected our political leaders are with the frustration of ordinary Americans. We need Warren in the Senate. Paul Krugman at Treasury.
posted by humanfont at 6:52 AM on June 20, 2012


these people flat would not give any way to substantiate the conversation we were having, the agreement we've just come to

That's why you record the call.
posted by one more dead town's last parade at 6:59 AM on June 20, 2012


You know what it is, what it really is? Numbers on a piece of paper. That's it.

Um, no, your credit score affects your ability to get a loan, your interest rates on that loan, your ability to rent an apartment, sometimes your ability to get a particular job. It's not something you can just blithely ignore unless you don't care about any of those things. The vast vast vast majority of us do.
posted by desjardins at 7:20 AM on June 20, 2012 [1 favorite]


Early on memorial day Monday, a brilliant former teacher and friend of mine posted to facebook that he'd hit his breaking point, because his student loan company was going to start garnishing wages from his (small, food service) paycheck. This after several months of previous traumas, medical bills, periods of unemployment and depression. He wrote that he was afraid of having to live in a homeless shelter.

He intentionally overdosed later that night. Died three weeks ago Friday.

I've talked to lots of his other friends over the past few weeks now. (In fact, I saw this article for the first time when one of those friends posted it on facebook.) As a group, I'd say we're all pretty well-informed about mental illness. We know that depression can happen even to people with seemingly awesome lives, that one person's suicide is far beyond our individual control.

That said, existing depression can sure as hell be aggravated by shitty life circumstances, and massive student loan debt sure counts as shitty life circumstances.

I read some of the writings of Paul Farmer for the first time in this particular friend/teacher's class, and was totally blown away. One of the major threads that runs through Farmer's work is the idea of a preferential option for the poor. Why should only the very wealthiest people have access to the best medical care, housing, education, says Farmer. Why have we as a society internalized the idea that poor people don't deserve or wouldn't know what to do with these things? Give people who can't pay and who are oppressed along multiple axes access to the very best care and resources we as a society can provide. They need it most.

I can see, on some level, how student loans may have started as an attempt at providing that preferential option. Give people access to better education, which in turn leads to better jobs. The jobs will pay enough to pay back the debt. Sounds fine on paper.

But that was before the cost of education skyrocketed. Before private lenders started selling loans off left and right. Before the housing bubble and recession.

Now there's almost no way you can argue that loans give you a preferential option. They're just another burden that people take up out of a desperate hope for more opportunities. Another thing that conservative pundits can point to in their endless "poor people don't make smart choices, bootstraps bootstraps bootstraps" tirades.

My heart goes out to the Reynosos, so hard.
posted by ActionPopulated at 8:16 AM on June 20, 2012 [7 favorites]


Um, no, your credit score affects your ability to get a loan, your interest rates on that loan, your ability to rent an apartment, sometimes your ability to get a particular job. It's not something you can just blithely ignore unless you don't care about any of those things. The vast vast vast majority of us do.

At the point at which multiple debt collectors are pursuing you for $300k in non-dischargeable student loan debt that your dead son took out (and that you co-signed on), good credit is likely the least of your worries. Blithely ignoring it is not the issue. The issue is plain straight-out surviving.

I don't disagree, though, that in this day and age, there's a dilemma: a hell of a lot of straight-out surviving depends on a good credit score.
posted by blucevalo at 8:55 AM on June 20, 2012


that is one shitty lawyer

That was my take as well. What's going on here?

I mean, we have $23,000 accepted by Berklee ... and nothing else? Why does it matter if his son was extended a $160,000 credit line if no one got the money? I'm so confused.

Apparently UBS extended nearly $160,000 in credit to Freddy Reynoso, and projected that if he made all payments as scheduled, the loan for his music education would end up costing him $279,000.

This is really about the debt/death issue, but damn that is an expensive education. For that money you might be better off hiring your own personal tutor for 3-4 years.


Berklee tuition looks to be ~$30K/year. At the most, he would have paid for one year, right? I still don't get what's going on ...

That's some really shitty financial aid there. I don't understand it. If this is correct, Berklee should be ashamed.

"Berklee awards some need-based institutional aid, but it is very limited. Most institutional money is used for merit-based scholarships.."

So yeah, that's always been the reputation.
posted by mrgrimm at 10:39 AM on June 20, 2012


At the most, he would have paid for one year, right?

No, the kid went there for at least 4 years and graduated. Tuition plus living expenses, $45k per year. The $23,000 figure is kickbacks the school is alleged to have accepted from the loan company for steering students to them.

The way I figure it, all of this happened before he hired an attorney

No, the article says 'even after Reynoso hired an attorney, he said they continued to call him every day, several times a day, for about a year and a half'.
posted by jacalata at 11:00 AM on June 20, 2012


Ah, thanks for the clarification. I was clearly confused.
posted by mrgrimm at 11:34 AM on June 20, 2012


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