I'm looking for help or advice in what I can do from here. I know I've severely messed up my credit, but I feel at a loss for what I can even do at this point. I'm sorry for the hugely long post, but I want to make sure to include any details that might be important.
I was doing fairly well managing student loans and credit cards, and was slowly building my credit. (I'm in my mid-20s). Two years ago, I took out a private student loan with Sallie Mae for career training that was $16.8k and my mother co-signed. I ended up not being able to finish school due to personal/medical problems. I started paying on the loan as soon as I dropped out of school (Feb 08) and kept it PAA until I found out I was pregnant 8 months later and wasn't able to work as many hours due to medical problems, yet again. My mother at this point had been unemployed for over six months, (she had been laid off - it took her over a year to find a new job). I applied for a hardship deferment and was denied. I did my best to keep making payments, but wasn't able to pay the full amount due every month. Every time I tried calling SM to try to work something out for the next two months, I was either told they could do nothing or that I could get a hardship deferment only if I paid my past due. I borrowed money from parents, paid the full amount past due, applied for the deferment, and was denied again. I was then told I could do the same thing, but with a forbearance. At a loss as to what the differences were, I borrowed money yet again from relatives (my parents couldn't help at all anymore), paid everything past due, applied, and was denied. At this point, I gave up. In May of 2009, a SM rep called me trying to collect on the past due, warning about defaulting, etc. Being 8 months pregnant, I explained everything I had been through already and told the rep that I had no one else to borrow money from, was unemployed due to the medical complications I had with pregnancy, and couldn't pay anything. The rep told me she was so sorry for the problems and told me she would get it taken care of. SM approved a forbearance and backdated it to Oct of 08 which was the original date of my first attempt, which put it as coming out of forbearance in June (the month my daughter was born...)
I wasn't able to find a job until two months after my daughter was born and even then, couldn't afford the full payments yet again. SM refused to work with me, demanding the entire monthly due amount and stating that I couldn't lower my payments or defer the payments any further. For awhile I made what payments I could, but got frustrated with arguing with them about trying to get lower payments. After fighting with them through my entire pregnancy, I felt like I was being taken advantage of and didn't see the point of making small payments if they were going to continue to report me as late to the CRAs (now I know this was a mistake....) In February, my mom started receiving calls from SM about the loan defaulting. They were not calling me, even though they had my phone number. I tried calling a couple times to, again, try to arrange payment or do something - every time, I got nowhere. The last call she received was a man who hardly spoke English, stating the loan was going to collections unless a payment of $2500 was made, claiming that was what SM was showing as my mom's available credit (which she did not have). When she told the guy that she couldn't do that and how they could reach me because I had been trying to contact them to try to work out payment, the guy hung up on her and we never heard another thing. I found out that SM charged off the loan in February or March. We have not received any written communication from SM regarding the charge off nor have we received anything from a CA....
I've been focusing on getting the rest of my credit in line, but this loan is killing it. All of my open lines of credit have been closed (by the credit card companies) since everything started going downhill with this loan. I have no credit cards anymore. My score is a ridiculously low 522 right now. My husband and I received $2000 as a wedding present recently (very belated...) and we want to try to apply it to this loan and try getting it taken care of. I called SM to try to find out what I could do, and was told they didn't have the loan anymore and couldn't give me any information about who has it. From what I understand, it's very common for creditors to sell loans that they charge off. However, when I log into my SM account, it still shows the loan and says the past due amount is close to $7000 and the total amount on the loan being $23k (and it was originally $16.8k?!) Additionally, the payment history SM reported on this loan showing on my EQ report doesn't add up; how could it have been 60 days late three months in a row while it was supposedly on forbearance? Is it showing as late because SM backdated the forbearance and didn't fix their reporting? It shows some form of late payment during 7 out of the 10 months it was supposedly on forbearance on my credit reports - but when I look at SM, there is no past due or account balance adjustments during the time it was in forbearance that would indicate the forbearance wasn't applied.
I really just want to get this taken care, but I have no clue what to do from here. My husband and I have a daughter, and another on the way - I can't afford to pay $7k past due up front, and can hardly afford more than $200/month in payments. But am holding on to this $2k hoping to make a large upfront payment to show I'm serious about paying this. Or would it be best to save it and use it to make larger monthly payments? Does anyone have any advice on what I can do from here? Does SM still have the loan and I just ended up talking to a bad SM rep yet again? Or has it been sold to another lender? How do I get that information?
