’installments’ and ’rehabilitation’

After reading through Dealing With Collection Agencies I'm left with some unanswered questions.  One of which is about the implications of paying a collection agency in installments.  The other is about loan rehabilitation.


I was asked to pay-up by a collection agency (Alliance One) for the first time ever, this morning.  All attempts by me to get a handle on the situation though talking with the collector have failed.  I want to know what will happen if I dictate to them what I'll pay and a schedule for the payments.  Whenever I try to find out if that 'would be ok', I get an earful of admonitions about how my credit will be affected, and how 'if you try to get a mortgage...' bla bla bla, and that I should pay it all within a month.  They haven't said that I have to, just that I should.

So, I am left wondering about the implications of paying a collection agency in installments, even after considering the section about this in the document (linked-to above), some of which is quoted below.

... Essentially, collectors are NOT allowed to refuse requests for installment arrangements. Also, collectors are REQUIRED to convey that the HRDC considers installment plans ACCEPTABLE and MUST therefore be ACCEPTED b the 3rd party agency - based on the return of a completed "Financial Questionnaire". ...

If the HRDC considers installment plans 'acceptable', does that simply mean that they will not commence legal action?  I don't know the answer.  I imagine (hope) that someone registered with this site already knows.  Anyone?


Another issue is load rehabilitation.  I understand that a loan can be rehabilitated if 6 consecutive monthly payments are made, and the accrued interest paid in full.  Rehabilitation consists of the government removing the loan from the collection agency.  The A1 collector that I spoke with told me that such rehabilitation is only for students that are currently full time (??).  That makes no sense at all.  She also told me that my chances of getting the loan rehabilitated were zero.  Is she right?  I can't find information about this online, and I've been unsuccessful trying to find out over the phone.

There is a chance that I will go back to school, eventually, perhaps for a MSc or some such nonsense.  Does the fact that I am not currently applying for more education come into play when loans are considered for rehabilitation?

Thanks for the reply, lime.  This follow up starts off a bit off topic, but does eventually end up being on topic (the impatient might like to skip to the last paragraph).

I just got an automated message on my machine which sounds like something the Terminator would leave...  So I called back.  Apparently it was a message left for no reason.  When I managed to talk with the woman who has my account, I was told that it was 'just done', and such messages had no purpose other than to remind me that they're still waiting for money.

So, while I had her on the phone, I asked about getting correspondence through the post instead of by phone.  She said that I had "to inquire about that".  I said "I am", to which she replied "inquire to someone else", and hung up.  Instead of phoning her back, I called the A1 general line, and ending up talking to her supervisor (by chance).  He was quite helpful, telling me about the implications of paying monthly.  He also told me that I could get a loan to pay off my debt to them.  I understand that to pressure people into getting a loan to pay off debts is a 'no-no', not that he pressured me!  He just suggested it.

In any case, if anything goes sour, or I find that I've been out-and-out lied to, I have a recording of every single phone conversation with A1, except for that fateful first call.  I'm thinking it might be nice to put up the interesting conversations on line, with names and numbers edited out, or course.  I'll have to check with my legal team (google) on that one.


Sorry about all that.  Here's what I know, so far.  By paying in monthly installments, my credit will remain unaffected.  Aside from the irritating calls and mail, the only real adverse affect of paying A1 instead of the government is that they (A1) will do a credit inquiry every 6 months until the debt is payed.  So, when it's all paid up, my credit history will show several credit inquiries, which are bad, no doubt about it, but they will only show up for 3 years, and there'll be something saying "paid in full" after all is said and done.

P.S. Still no word on rehabilitation.  I'll post to this thread once I've found out.

Rehabiliation is for loans that are with HRDC when a person is still full time or wants to take out more sutdent loans. A recall is for "when they admit they goofed".