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Defaulted Student Loan 2009

New Member

Defaulted Student Loan 2009

Hi All,

I have a small Stafford loan that defaulted in 2009. This TL is no longer on any credit report but I want to avoid future wage garnishments.

If I pay the full balance to Alltran, who now owns my debt, will the past nine years re appear on my credit report?

Alternatively, what will appear on my credit report if I rehab? I understand that the charge off will fall off (even though it already did in 2016, which makes me want to just pay the full balance).

IN SHORT, I am asking what effect rehab will have on my CL, my current number of derogs, and my AAoA.

Will I suddenly have a 9 year old TL reappear on my credit report with 7 years of derogs?

Will I have a TL on my credit report that dates back to 2009 with no derogs at all, effectively adding my AAoA?

Will my CR look the same as it does now, with no evidence of a SL, except with a new TL on my CR for the nine month rehab period?

Thank you in advance. I have searched tirelessly and could not find an answer for this specific rehab question.
Message 1 of 3
2 REPLIES
Community Leader
Legendary Contributor

Re: Defaulted Student Loan 2009

Some federal student loans are exempted from the normal credit report exclusion provisions of the FCRA, such as Perkins and FFEL loans. See sections 453 and 430A of the Higher Education Act.

 

However, if I recall correctly, Stafford loans are not exempted under the Higher Education Act from the normal FCRA exclusion provisions, which would apply.  Neither of the exclusion periods of the FCRA for account derogs, such as 7 years from delinquency for monthly delinquencies and 7 years plus 180 days from DOFD for charge-offs and collections, are exempted, and would thus still apply.

Neither is reset based on payments, and thus they should not be reinserted.

Message 2 of 3
Contributor

Re: Defaulted Student Loan 2009

Robert, sorry I'm being a bit dense. My FFEL STAFFORD SUBSIDIZED  just fell off my report, and went to a new collection agency. Are they NOT going to reappear on the report? 

Message 3 of 3