Hello everyone! I defaulted on my private student loan through Navient (formerly Sallie Mae) after they refused to work with me to lower my payments or offer a forbearance during a period of time I was unemployed and it is now placed in collections through some weird "Law Firm" (Weltman, Weinberg & Reis Co) / collections agency a year and a half later for the amount of $26,000. The letter stated "they were through with collections efforts and invite me to settle this matter."
After talking to a woman who seemed decent enough, she offered to have this settled for around 13k (I recorded the conversation also). She said I can either pay the entire amount (which I don't have at all) or place a down payment of 2k, and make payments up to 48 months and then proceeded to pressure to pay anything I could that night which I didn't. While settling it for 13k sounds great, I'm obviously a little weary and need advice on how to approach this since I have read horror stories of others who agreed on a settlement repayment plan and have had the balance returned in full after payments have been made. So with that noted I have not yet agreed or have requested validation of the debt. I'm going to list some things that I have questions about to make it easier:
1.Should I request a validation of debt letter to buy some time in regards to deciding to settle the debt? I've read there are pro/cons to this. While I am certain it is my debt, I'm a little confused because a) the balance remains on my Navient profile online b) it is not appearing on my credit report as in collections. It is under a section called "account review inquiries" and then has their name listed. Does anyone know what this means exactly? I looked it up, and it appears to be some kind of review of my credit report on their behalf. Is this legal?
2.I was told I can't release the co-signer after agreeing to settle. She said that with Navient he'd have to agree to pay 30% of the original balance in order to be released. My question is why would it matter what Navient's policies are if this is a collection agency? Doesn't that mean Navient sold the debt to them? So why would it apply at this point. Should I consult with an attorney for advice on a settlement agreement so I don't get screwed over in the long run and I am protected in writing? Or Should I seek bankruptcy (my credit is awful (rating 420's), mostly due to identity theft a couple years back but after somewhat restoring it myself it has plummeted due to unemployment 1 year ago. I have about 4-5k in debt in credit cards and other collections not due to fall off the report until 2023, also getting collection calls/letters from these places; a fresh start doesn't seem like a bad idea! I'm in my late 20's).
3.How would bankruptcy affect my co-signer? He is on social security benefits and is now living another country. From what I've read, a loan can be solely transferred to a co-signer after the other borrower files bankruptcy, however from my understanding private loans are not protected federally therefore potentially being released on bankruptcy and/or unable to garnish social security wages. I'm not sure whether or not him living outside the country is beneficial or not but crossing my fingers it is as I feel totally awful for putting him this position in the first place.
Also, how would bankruptcy affect my federal loans? I know they are nearly impossible to discharge, the majority of my college loans are federal (about 80k: I received an MA also) they are for the most part in good standing, but I missed a couple payments recently and it hit my credit report further damaging it. Will those bad remarks be erased in bankruptcy ch.7? Which is my main concern, because if I do bankruptcy I want a good start! I'm currently on forbearance until the summer and then I will be choosing an income-based repayment plan (which is an entire other conversation in itself, but one stepping stone at a time!). I don't intend to have those loans discharged (I wish) but just wondering if it would cause further issues if I did do a bankruptcy and if negative remarks/reporting would be removed.
Is there anyone who has/or is currently dealing with this? (I know there is but is anyone willing to talk about their stories on how they approached, succeeded or are just flat out worried like me!) I've been feeling extremely stressed out about all of this and seeking some support.
Sorry for the long post, but hopefully I can seek some relief!
Also if it helps: I'm 27, make less than 20k a year, don't own property besides a car that's worth about 7k that I paid in full for.
Submitted March 03, 2017 at 11:46PM by bologna007 http://ift.tt/2mPNC6n
