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Can U.S Hardship Group Really Eliminate My Private Student Loan Debt?

By on February 26, 2016

Question:

Dear Steve,

I have a question. I have defaulted on many of my private student loans. I had been making payments but the payments were so high I wasn’t able to make as much they wanted so they defaulted. I came across a company called US Hardship Group.

They seem very reputable through BBB (A+ rating) and I have not found anything bad about them yet online. They are claiming that my lender sold the loan to collection agency. The lender was already paid by the insurance they’ve taken out on the loan. So the collection agency will try to collect and possibly sue if cant.

They state the collection agency must validate the debt. He say its very rare that the collection agency can validate the debt because they bought it and don’t have the “promissory notes” or contracts as your contract was with the lender. Since the collection agency cant validate the debt they must remove from your credit.

The cost for them to do the debt validation and follow through with it month to month and get it removed from credit is $665 mo for 48 months. They keep working the files just in case its resold and shows back up again then use the statute of limitations on limit to collect the debt in my state. My question is, does this seem legit? www.ushardship.com is the website

Answer:

I always hate the question about something being legit. I have no idea what legit means to you or anyone else.

Here is what I can share with you.

Why don’t you just validate them yourself? You can read this, this, and this.

I’m not sure how they would be able to know if a third-party collection company bought your debt or is acting as an agent of the original lender. That seems it has yet to be determined.

The statement about insurance is laughable. It’s an old urban myth which is not true. Lenders don’t get paid “insurance” on a bad debt. The cost of bad debt is built into the price of the debt in the interest rate. Interest rates are determined by factoring in profit margins, cost of money, defaults, and charge offs. Actually when you study all the many factors that go into an interest rate calculation it gets very interesting for us debt wonky types.

Any current debt owner can pursue collection and/or sue you over an old debt. They can even sue you after the statute of limitations has expired but you would have to defend yourself and raise that as an argument. There are some good defenses to being sued but they all best involve a legal opinion from a lawyer who is licensed in your state and representing you.

As far as appearing on your credit report, the account should be reported for up to 7 years and 180 days from the time the account last started being delinquent. It’s not the old debts that really hurt people, it’s the fact they don’t have new good credit being reported about them.

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The statement that an unvalidated debt “HAS” to be removed from your credit report seems a bit foggy as well. The process of validating the debt for legal efforts and validating the debt for the credit bureaus is not a joined process. Once you identify the current debt owner and let’s say they can’t validate your debt, then they would have to update the information with the credit bureaus or you can dispute the debt with the credit bureaus by just sending them a letter or doing it online.

You can dispute your credit report information for free online at:

As TransUnion says, “When TransUnion receives your dispute request, we will contact the data provider or information source. That source has 30 days – in some cases, up to 45 days – to investigate whether the information reported is accurate. If the data provider or source does not respond within the required timeframe, TransUnion will remove the information from your credit report. If the company that provided the information to us verifies the record, it will remain on your credit report.”

So you can see that while the collector might not respond to your debt validation requests, they could still tell the credit bureau the information is verified and it would not be removed from your credit report. In that case you would want to talk to a lawyer who is licensed in your state to represent you in a potential legal action or you can “escalate your complaint because you believe the dispute was not properly investigated, and you demonstrate a strong basis for your belief, the furnisher is likely to respond,” as Nolo says. The NOLO website also gives some good advice on further resources to complain to if the credit bureau fails to update unverified debts.

Debt relief companies need to be very careful of running afoul of the Credit Repair Organizations Act when promising credit repair services and collecting money in advance of providing those services. As the Federal Trade Commission says, “This Act, Pub. L. No. 104-208, § 2451, 110 Stat. 3009-455 (Sept. 30, 1996), amending title IV of the Consumer Credit Protection Act, prohibits untrue or misleading representations and requires certain affirmative disclosures in the offering or sale of “credit repair” services. The Act bars “credit repair” companies from demanding advance payment, requires that “credit repair” contracts be in writing, and gives consumers certain contract cancellation rights.”

If you like the service that U.S. Hardship Group is selling you and feel good about their help, then go for it. You have the right to choose who you want to work with. I am a firm believer in the right of anyone to hire professional assistance to assist them with matters they may not be familiar with.

But to make an informed decision, why don’t you find a consumer attorney who is licensed in your state and talk to them about your legal rights. One place to look for such an attorney is through the National Association of Consumer Advocates. The attorney could evaluate your debts to figure out when the statute of limitations would expire, and could act as your attorney to request validation. I would imagine the service would be $500 or so, total. Most importantly you need legal advice about what not to do to start the clock over on the statute of limitations.

If the debt collector went on to violate the Fair Debt Collections Practices Act, then you’d already have an attorney who could represent you and sue them.

If you want to checkout the U.S. Hardship Group further yourself, you can use my general guides below.

  1. The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line
  2. 10 Must Do Steps to Find the Best Credit Counseling or Debt Settlement Company for You
  3. How to Check Out a Business or Company to Avoid Getting Scammed or Ripped Off

And by the way, the BBB does report the company has an A+ rating and the president is Kevin Miller. – Source

Kevin Miller is the registered owner of ushardship.com.

U.S. Hardship Group, LLC says they are located at two addresses in California:

The domain name is registered at 1024 Bayside Drive, Suite 516, Newport Beach, California 92660. Which appears to be the address of a UPS Store mail drop.

The website for U.S. Hardship Group says they are located at 260 Newport Center Drive, Suite 100, Newport Beach, CA 92660. This address is for a virtual office space.

Screen Shot 2016-02-26 at 11.46.53 AM

But the State of California has no record of the company being registered to do business in California.

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The company appears to actually be a Nevada registered corporation and was registered on October 12, 2012.

I’ve presented you with a lot of information here and I invite you to call your U.S. Hardship Group representative back and ask them whatever questions you might have from my information above. They should welcome your questions and provide you with courteous answers.

Please come back and comment and let me know what you eventually do. I’ll ask U.S. Hardship Group to come and comment on this post to provide their feedback as well.

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About Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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