Navient Charged Off Private Loan While I Was Paying

[Anonymous]

I have a private loan that was originally $12k but is now $27k due to interest. The loan came out of deferment and I didn't know until they called stating I was already past due 120 days. I told them I could afford to pay $100/mth they said no they wanted $260. I started making $100 payments because I figured if they see I'm at least trying to pay consistently they'll work with me. Not! They charged my loan off and are now saying the balance is due in full. The account shows as CO on all 3 credit bureaus as well as late payments every month for the past year even though I was making payments. The only options they are offering me is to settle for 50% of the balance and they'll update it on my credit report as settled for less than full or to pay $2k past due balance and they'll put me on a payment plan for $135/month with .01% interest but the CO status will remain on my reports until the account is paid in full. I read that if I settled for 50% that they would send me a 1099 for the remaining amount as income and I'd have to pay taxes on it. Is that true? Also considering that private loans have statute of limitations as any other creditor which is 7 years in GA, if l  do the payment plan will it still fall off my report in 7 years even though the full amount won't be paid by then? Navient told me they are not going to take it out of default or charge off status even if I'm on the repayment plan. She said they'll report the lower balance each month but that's it.

And my last question is since I was making payments and I have a record of those payments through Navient's website,  can I dispute the payment history with the credit bureaus to maybe have those lates removed? I have a CO credit card that had the payment history deleted and my score went up 20 points so hoping that by having those lates removed I can get a little credit boost.

Thoughts??

[srloring13]

If you were making payments but not paying the full amount due, the account would be reported late and you dont have any grounds for dispute of payments since you paid less than what was due.  The negative account will fall off your credit report 7 years from the date of first delinquency as long as it was never brought current.

The statute of limitations begins from the date you first became past due as long as you never brought the account current.  

If you do a payment plan, make sure you get it in writing.  Also, if thats the route you intend to go, make sure you dont miss any payments or make any late payments because it may void the payment plan.

If you are sent a 1099-C there is a possibility that you can exclude the amount from income if you qualify for one of the exclusions or exceptions. https://www.irs.gov/taxtopics/tc431.html