Consumer complaint received 2016-11-02
Product: Student loan — Non-federal student loan
Issue: Dealing with my lender or servicer — Trouble with how payments are handled
Company: WELLS FARGO & COMPANY (OR)

I was going through a bankruptcy and was told by my lawyer that all loan payments were to be put on hold during the proceeding. After the period ended, I was contacted by Wells Fargo that my loans would all be payable in full within 3 days. I scrambled to make the minimum payments to keep my loans from defaulting. Because I was not current, they would not enter into payment arrangements or issue a forbearance because I had n't shown that I was willing to repay, even though prior to the bankruptcy all of my loans were up to date with only occasional late payments. I set up monthly auto payments and was making the minimum allowable for 5 months. In the 6th month, one of my loans changed amounts because of interest rates and as a result, the auto payment for the loan was kicked out of the system. I was not able to immediately return messages from the bank ( just prior to the payment ), and did n't realize until the first of the next month that the payment was not made. Upon contacting Wells Fargo to make the payment, I was informed that as the payment was not made by the last day of the month ( because I could n't catch up in payments ), that they loan had defaulted and was due in full. They were unwilling to allow me to pay it even one day past the end of the month, and my appeal was denied because " they had tried to call '' me. I focused on getting my other loans up to date and was finally able to get a forbearance approved to cover the time I was in bankruptcy and after I had made 6 months of payments on time. The loan that was defaulted was a different type of loan than the other four that I have with Wells Fargo, and even though I had a consistent payment record for 5 months, they would not work with me. In the mean time, I have been unemployed until recently and could barely pay the loans that were not in default. I finally am employed and getting back on my feet and now they have taken 50 % of my monthly income in an automatic offset to cover the defaulted loan. I appealed to the executive office, but they state that because I have no past record of need ( bills coming out of my personal Wells Fargo checking account - they were paid by family ) and the truck payment that I made was not in my name ( it is in my husband 's name ) that they will not return any of the funds or work with me in any way to rectify this. When I asked why I was n't contacted in writing prior to the offset, they indicated that they had tried to call, and " of course not '' that they would not be notifying me in writing. I had, however, received two letters stating that the loan was in collections and offering a settlement amount. When I questioned the legality of offsetting money from my personal checking and reviewing my statement history without my consent, I was informed that it was one of the provisions in the terms of use I signed when I opened my checking account with Wells Fargo. That was certainly not something that was shared with me when I asked questions about my student loans when opening the account - on the contrary, I was informed that branched/banks do n't deal with the student loans. Short of bringing a lawyer with to understand the fine print, I would never have thought to check if my student loan account could draw from my checking without permission. When I appealed to the executive office of the student loans, they did not even address the facts behind the loan being in default to begin with.