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Advice on dealing with Collections

New Visitor

Advice on dealing with Collections

ok this might take a bit. currently i have a credit score hovering around 750. i recently received a letter from a Debt Collection agency (Pioneer) attempting to collect a $1200 debt from over 10 years ago. It’s listed as a FFEL student loan. A couple years back I had some student loans in default that fell off my report and are no longer there. i havent been back to school since about 2007. everything on all 3 of my reports is clean. Could they put that account back onto my report. I guess my question is should i negotiate a settlement, request a validation letter and try to contest it. what should i do? and if i do pay it does that go back on my report as a paid off collection account? What would be my best course of action? I have until the 21st of January to respond according to the letter. thank you.
Message 1 of 2
Legendary Contributor

Re: Advice on dealing with Collections

Federal Family Education Loans (FFEL) are not subject to the normal credit report exclusion provisions of FCRA 605(a) until they are repaid.

The fact that everything in your current credit report is clean does not mean that the loan has been repaid.

If the federal loan has not be paid, then they can report delinquencies until it has been paid.


After you pay, the normal 7 years plus 180 days exclusion period from date of initial delinquency, as set under the FCRA for normal collections, will apply.

If the debt is legit, I would pay the loan, either in full or by way of offering a settlement for less.

However, since federal student loans are also exempt from state SOL for bringing civil action seeking a judgment for the entire debt, a settlement for less may be more difficult.

You can always offer......


Message 2 of 2
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