If so, are there are pitfalls to watch out for?
I just completed rehab and saw that my new loan servicer is the one who I have a defaulted private loan with. That loan is beyond the SOL and nearly beyond the reporting limits (it's 6w from falling off the last bureau). I absolutely can not afford to repay that loan at this time.
I am now worried that every time I make contact with this loan servicer for the next ten years that they will be hounding me to make a payment on this old debt, or trip me up into saying something about it to allow reporting or resetting the SOL. This is also a shady servicer so I am paranoid they will do something like "accidentally" apply a payment to the wrong debt and reset that way. I suppose there is nothing I can except be hypervigilant, but I was hoping others may have been in this situation and can tell me if it caused a problem or not.
Resetting the SOL is possible, but highly unlikely in most states unless you positively remit payment.
If they "inadvertently" post a payment to the private loan, you can address that should they bring legal action.
That would not be a big concern.
They cannot, even if you were to make payments, get the account back into your credit report after it has been excluded by the CRA.
CRA exclusion of derogs on an OC account is based only on the date of first delinquency, and payments dont affect the exclusion.
Deletion of the entire account is done by the CRA if the account is delinquent when derogs are excluded, and also cannot be undone by any future payments.
Reinsertion into your credit report should not be an issue, period, if it has been excluded by the CRA.
Yes, knowledge of both loans could result in their later demands to still pay the private loan even after SOL has expired and credit report exclusion has occured. It might, for example, by a condition on their part for acceptance of a PFD on the other pending loan.