@lastchapter_AM wrote:
It was dismissed. I had fallen behind on payments and long story short, didn't actually need to continue it any longer (my car was the majority of the debt included and it got paid off in a settlement), so it was advised to just let it get dismissed.
I had read some things about applying for loan rehabilitation with the current servicer, getting a track record of 9 payments and once it's no longer in default status, figure out a payment plan that works with the new lender / servicer. Is rehab the better option than just making random payments?
It's promising to hear someone in a similar position as me. I would LOVE to have acceptable credit next year at this time. This has been dragging me down for so long (my own fault) and need to make changes!
Making random payments will do nothing for your situations with the SLs. The will still remain defaulted, you will still have an enormous collections fees there (which if they are in fact with the US Dept of ED will be reversed likely or if not possibly reduced significantly) and they will still take your tax returns, etc. They will haunt you forever. Thise payments will only be covering the collection costs and not even touch the principle.
*trust me*
I have MANY SLs, some 20 years old, that I let spiral out of control and rehabing them is your best option. I honestly wouldn't even suggest paying them off if you could because all of the derogatory accounts will remain (meaning not only the original TLs, but also the CAs). Just do the rehab programs and when you finish at least the CAs will come off. Right now, they dont even expect the rehab payments if they are in fact direct loans or through the US Dept of ED!
I had only FFEL loans, no direct loans since they are so old. Currently 11 (6+ were consolidated into 1, plus the additional 10 SLs), so only 4 SLs are with the US dept of ED and the rest are with private servicers. Fact is the ones with the US Dept of ED require no payments if in a rehab program through Sept!
If you dont make a lot of money, that will actually benefit you. Payments are as low as $5/mo for rehab and you need to make those 9 payments (and possibly $0 through September and that is 4 months right there to get back on track!).
Just keep tabs when the rehab payments are done where your loans go and be ready to immediately set up some sort of IBR plan so you don't get caught with payments larger than you can handle and spiral with late payments again and such.
Good luck!
