PFD for Private Student Loans?

[Anonymous]

My wife has a few private student loans that are showing up as charged off.  They are not in collection (as far as I know).  If I can PIF any of them, can I try a PFD?  Should I offer anything less than the current balance?  Thanks!

[Anonymous]

So after reading some threads on the subject, it looks like government student loans, at least, cannot be PFD'd as they mey be required to report everything as it actually happens.  I'm not sure if this is true with private loans and I'm not sure they would actually agree to a PFD anyway; however, would it be possible to off essentially a Pay for Good Will?

The account is currently reporting as charged off.  I understand that paying it would change the status to "Paid Charge Off".  Would it be possible to ask them to change the status to "Paid As Agreed" in return for payment in full?

My DW actually has 5 accounts with that bank: two for about $10k each and 3 for about $3k each.  Can we just tackle one account at a time with no ill effects?  For example, if they mark one account "paid as agreed" but then get unhappy that the larger loans aren't being paid at all, could they change the "paid as agreed" account back to a negative status?

Thanks!

Message Edited by Mike14 on 11-08-2008 12:31 PM

[Anonymous]

Bump...

Is this a good idea, or a very bad one that could make things worse?  Can an improved status be later changed back to a bad one because of activity (or lack thereof) on other accounts with the same creditor?  Thanks!

[Anonymous]

Any thoughts?

[Anonymous]

Lynn, can you comment on this?  Thanks!

[LynnInMN]

For the most part, privates wont do paid for delete either.  These loans are defaulted, not just late. Once they hit the default stage, there is no going back for this type of loan.  At this point in time, get it resolved before they file for a judgement, which privates do as a regular course of business even if you are paying.

[Anonymous]

A few questions:

Might they be willing to do a Pay for Good Will and have them change the Defaulted/Charged Off status to "Paid as Agreed" in return for PIF?  Should we bother at all to negotiate for less than PIF?  Or would trying either of these possibly precipitate a lawsuit?

Can we just tackle one account at a time with no ill effects?  For example, if we pay one of the smaller accounts and they change it to "Paid as Agreed" but then get unhappy that the larger loans aren't being paid at all, could they change the "paid as agreed" account back to a negative status, and possible trigger a lawsuit for the unpaid ones? 

[LynnInMN]

Defaulted private loans will settle but only when you settle on the entire balance at one time.

When you default, even though there may be multiple accounts, incoming payments are spread across the board, to any fees first, then interest and finally principal.

Lenders really dont care about good will.  For the most part they would have no reason to do business with you again in the future and that is the logic behind goodwill. Also, a lot of private lenders also handle FFELP loans and it is usually there policy not to change any status.

[Anonymous]

So I can't send them payment in full for one loan and pay it off completely, leaving the other 4 untouched?  She's going to end up getting a judgement on her CR, and we still won't be able to pay what they want.

Would sending a goodwill letter make them more likely to sue?  Or will they just ignore it? 

Message Edited by Mike14 on 11-24-2008 03:10 PM

Message Edited by Mike14 on 11-26-2008 09:27 PM

[Anonymous]

Which lenders will consolidate defaulted private student loans?  The original lender no longer does consolidation loans and the only provate consolidations loan programs I've found state that the loans must be in good standing.