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AscensionPoint Recovery Solutions is Refusing to Talk to Our Representative

Written by Steve Rhode


Dear Steve,

Daughters private student loan & my husband co-signed for. Five years ago my daughter had her student loan in forbearance due to she was still in school, however my husband and I filed chapter 13 bankruptcy making payments to the trustee for five years.

Bankruptcy was just completed and successfully disclosed 3/22/16. During this 5 yr time my daughter attempted to contact Citibank however they would not allow any contact with her due to the bankruptcy.

We thought it was going to be written off due to the courts made payments to it during this time. After the bankruptcy the attorney and trustees office said we needed to contact the student loan place to continue the payments for the student loan.

I called the phone numbers the trustee gave I also left messages and was not able to get any response fm them. Then Later in May we received a letter from AscensionPoint collection agency on behalf of the student loan.

We sent a validation request to have them verify it was truly for the student loan. They sent info validating the loan and a payment coupon requesting payment in full.

My daughter currently is not working however because my husband co-signed we are afraid of a garnishment of wages.

We contacted a financial advisor to help with negotiating either a settlement agreement or reasonable payment arrangement. We had a 3 way call with the financial advisor, myself, & my daughter on the line, the financial advisor put us on hold and called AscensionPoint to ask if they would talk to him on my daughters behalf. They said No.

The advisor said what if I bring her on the line right now and she gives a verbal authorization for you to speak with me. They said no. Then the advisor asked ok will you speak to me if I get Power of Attorney so you can speak to me. They said No my daughter had to call with out anyone else on the line, her and only her.

My question is; Can they Legally refuse if she gives POA to the financial advisor? We do not know our rights. What are our options? What would you suggest we do next?



Dear Dorothy,

If you present them with a valid Power of Attorney (POA) they should acknowledge it. But it is certainly not the first time I’ve either had the experience or heard of a collector losing or refusing a POA.

However if that’s the game they want to play then you can always hire an attorney who is licensed in your state to act as your legal representative. The collection company would then have to go through the attorney once they know they represent you.

I’m not quite certain what they sent to validate the loan. Did they send a copy of the original loan agreement and a detailed accounting on how the current balance was calculated? If not, read this and this.

I can understand why they seem to have accelerated the private student loan. When co-signers file for bankruptcy the not on the loan you signed generally says the note is now due and payable in full upon you bankruptcy.

However, your question is similar to another I just answered and attorney Greg Fitzgerald added a comment to that Q&A. The daughter in that question was Elizabeth.

Greg is a California based attorney and said, “Unfortunately Elizabeth is/was caught in that space between a lender’s “policy & procedure” and the lender’s interpretation of the law (both bankruptcy law and contract interpretation). For example, the automatic stay did not apply to Elizabeth, and the lender could have pursued her for non-payment without violating the stay. They instead elected to take the more conservative approach and trigger the bankruptcy clause in the loan. I would like to see the contract language for this however, as I’m not sure I would agree the clause applied to her. If it does not and if she attempted to make her payment, she may not actually be in default. This distinction can certainly have ramifications in terms of what the amount they are now alleging is due because of the “default”.

That all said, I generally advise clients that unless: 1) they can pay off the private student loan today or 2) can afford the payments AND know when it will be paid off (the AND is very important), they are better off defaulting. A lower payoff can usually be negotiated after default. If not, and they file suit, a better resolution can usually be obtained in court. Borrowers should not be afraid of court (so long as they get a good lawyer who knows these cases). In fact, many times we get better results in court. As a final point regarding litigation: if they do sue Elizabeth, she may have the defense that she did not actually default. It is only in this forum that her accurate assessment of “absurdity” can be determined (keep in mind that the law and court rulings are not immune from absurdity!).

As to the statute, it is tolled during the bankruptcy proceeding, which means it does not run during that time. It is an interesting question that, since she did not file BK, was it tolled as to her? I think many courts would say it was tolled, but again, I’d love to make the argument that is was not tolled because she did not file.

My suggest approach for her is if she can obtain a lump sum settlement she can afford, great. If not, wait and see if she gets sued and then defend it asserting (among other defenses) that she did not default and that the statute of limitation was not tolled as to her. Interesting case.”

Another possibility here is Citibank charged off the loan and sold it to an outside debt buyer. In that case, getting the appropriate validation is going to be critical. Just sending you a statement of how much you owe isn’t going to meet the validation standards in many states.

One place you can go to look for a consumer attorney is NACA.


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About the author

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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