AboutTimmy Chou Expertise I am a experienced Mediator and a partner in a management consulting firm. As a mediator I work as a third-party neutral and specialize in partnership/shareholder disputes, management/labor issues, company culture difficulties, and family-owned business problems. I can help describe why alternative dispute resolution may be a good choice for you. As an experienced management consultant I may be able to offer creative ideas to help resolve your organizational and business problems and disputes. "If you say conflict, I say opportunity".
Question My wife over 15 years ago, acquired a student loan in which was neglected on our part due to economic reasons. Since then we have had destroyed credit. We have in every day tried to fix the situation. The place she has the loan wants a considerable amount of money down, and a high monthly payment. we tell them we may be able to try to work a payment out with them to get the loan out of default and move on with our lives, but they will not even talk to us unless we put several thousand dollars down. we try to explain that with the bad credit from this loan we cant even get a loan nor do we have what they want us to find in a rich relative. they have taken our taxes for several years that we see never goes on the payment, when we ask about where our tax money went they just say we will never see it on the balance because it goes towards the interest and fees. is there anything we can do to try and resolve the situation.. thanks randy
Answer Thank you for your question!
As I always mention, Mediators act as neutral third parties to disputes and never "get involved" in judging the merits of conflict, but merely use special techniques to help the parties decide how to negotiate their own settlement.
The case you describe here is far too typical. I am not a lawyer, nor can I mediate this with you alone but I can respond to your question from my business consulting experience.
Note that this issue may have legal ramifications and you may wish to consult an attorney.
As you have likely seen, no one cares about your predicament and they really have no incentive to try to help you. They are dangling the hope of some settlement with you trying to get a few thousand dollars but they have not offered a settlement agreement that you sign BEFORE you pay the money. If you pay it you will likely be right where you are.
If they are intercepting tax refunds they likely have already been given a judgment in court against you. Make sure that you have claimed enough deductions so that you never have a tax refund coming, but owe tax at the end of the year. This way they cannot take this money (but you need to reserve funds for the tax man).
You have to remember that the loan company (and many other large bureaucracies from hospitals to utilities) are just large machines with small people just doing their best to clear their desks and make their quotas. Its not personal.
Nevertheless, there are no incentives in the system for anyone to do anything but continue to try and get money from you. This is especially true for collectors, who are just trying to whine you into a payment.
If you have a court judgment against you, you have little option but to file bankruptcy to get rid of this matter. You could explore this with a bankruptcy attorney. You may already know that it will be impossible to rebuild your credit file unless this judgment is satisfied somehow or charged off in a BK, and any credit you seek (like buying a house) would be dependent on this matter being resolved.
Be sure to obtain a free copy of your credit report and see what is on it.
These are some ideas. Feel free to follow up with additional questions.
For your information, the pros and cons of the types of dispute resolution methods follows.
GOOD LUCK!
Arbitration, Mediation, and Litigation
Arbitration: the referral of a dispute to one or more impartial persons for final and binding determination outside of the judicial system
Benefits of Arbitration:
Confidential, no public record
Limited exchange of documentation, information
Quick, don't have to wait for a court date
Arbitrators have expertise in the subject matter and are trained in conflict resolution
Cheaper than litigation
Preserves business relationships
Negatives of Arbitration
It's a compromise, no %100 winner
Complex arbitration can be costly
If not satisfied, may litigate the arbitration procedure
Poor results with an unskilled arbitrator
Both parties must agree to cooperate in the process
Mediation: the process by which parties submit their dispute to a neutral third party (the mediator) who works with the parties to reach a settlement of their dispute.
Benefits of Mediation:
Neutral mediator can objectively suggest alternatives not considered before
Parties are directly engaged in negotiating the settlement
Can be quicker than litigation
Less costly than litigation
Preserves business relationships
85% of American Arbitration Association cases mediated find successful solutions
Negatives of Mediation
may not reach a binding decision
unskilled mediator
Litigation: using the judicial system to resolve disputes
Benefits of litigation:
a clear winner and loser
uses a prescribed set of procedures
more predictable outcomes
is final
Negatives of Litigation:
waiting for court dates can do more harm
usually more expensive than mediation and arbitration
part of the public record
