topic Re: Defaulted Wells Fargo Private Loans in Student Loans

Defaulted Wells Fargo Private Loans

egypt04 — Sat, 19 Mar 2016 00:55:25 GMT

Wonderfully helpful FICO community,

I recently found out that 5 out of my 11 private loans through Wells Fargo had been removed from my online account summary page and were now considered to be in default and listed as charged off on my credit report. I am working hard to keep the 4 remaining loans in good standing and can afford the monthly payments on those.

I called to inquire about the 5 defaulted ones and they sent me the paperwork with the balances of each listed. I then talked to someone else on the phone and received the amount they'd accept to "settle" each loan- only about a 35% discount offered on each loan. (example: they want $946 on a $1456 loan)

-Could I counter back with a 60% discount or would I be laughed at?

They also said I could work on paying so much a month on them.

WHAT TO DO???

I do NOT have the money to even settle the smallest amount owed but could save up and try to tackle each 1 at a time. Since I can't get any marked as "paid off" on my credit report should I pay monthly to get them to start reporting favorably again or should I ignore them and wait for the SOL to happen- which I honestly am not sure the date of???

I currently have 1 Perkins in deferement due to hardship and my federal student loans are in month 2 of the rehabbing process, so my financial picture is in a bit of a mess.

I'm motivated to start building up my credit again as my score currently sits at a dismal 564.

ANY AND ALL ADVICE WELCOMED!!!!!!

Re: Defaulted Wells Fargo Private Loans

SCF — Sat, 19 Mar 2016 03:29:18 GMT

If these loans are recently defaulted, there's a fair amount of time left on the SOL, which means that Wells Fargo has plenty of time to take legal action against you and use tools like garnishment, or seizing bank accounts to get these loans paid back. Fortunately, those things cost time and money, which is why they are already willing to settle for less than the full balance - but if they have plenty of time, they may prefer some legal expenses to settling for a small portion of the original balance.

You can always counter-offer, and part of your negotiation should involve how the loan will be reported once the settlement is complete. Ideally, WF will agree to remove all of the negative information about the loan in return for your payment.

Since you say you can't afford to settle the accounts right now, you might want to consider the option of monthly payments. This won't neccesarily help your credit, but it will keep WF from suing you and garnishing your wages, etc. which can be a really painful setback.

You might want to read some threads in the Rebuilding Your Credit forum for other ideas and perspectives. In a situation like this, private student loans are very similar to other unsecured debt - the only difference is that they are very hard to discharge in bankruptcy.

Re: Defaulted Wells Fargo Private Loans

egypt04 — Sat, 19 Mar 2016 03:54:34 GMT

Should I start with the largest loan and draft up a settlement of debt with payment plan letter to send or start with the smallest loan and draft a settlement with lump sum letter? Does it matter?

Thanks, I will look into the other forums for more advice as well!