Navient Private Student loan Charged off- Need clarification and advice

[Anonymous]

Hello Everyone,  new member and first post so bear with me if I ramble but will try to make it as clear and concise as I can.  Sorry if this has been asked before but Ive been searching online doing research and through the forums but see many different opinions.

I recently tried to apply for a credit card and was declined due to a recent past due.  I pulled my Transunion report as Ive had other accounts approved over the last 2 years and CreditKarma shows a 100% payment history.  When I looked at my CR from Transunion, I have several graduate student loans with Sallie Mae (now Navient) that were charged off in June 2014 that are being reported monthly as past due (total 64k, past due 22k).  At that time I was having personal issues and wasnt working so I contacted a debt settlement company and began paying them to sort out my credit.  However it turned out to be a scam company (Omni Management Partners) and was shut down by the Florida State Attorney Generals Office in 2017.  

Now my question: 

I understand that Navient has every right to report these loans as late every month on my CR until the 7+ year (till 2021) limitation allows them to, at which point it would be deleted from my CR's.  Pennsylvania's SOL is 4 years which would have been June of 2018 to which they could sue (which I havent had any contact from them for years).   I had two other debts that were sent to collections I went to court for and settled and have paid off. 

My question is how I should proceed with this?  Since these will fall off my credit report in 2 years, should I wait it out until then?  Since the SOL has expired and I have had no contact from them, Can they still attempt to collect on these past dues?  Should I attempt to contact them and make an offer to pay to delete (a pecentage of what I owe)?  I know thats alot of information and question but any help, clarification etc would be greatly appreciated.  Thanks

[calyx]

If these really are private, and not federal, student loans, as you've indicated, then yes, you can treat them like any other debt.

While they can no longer sue because the SOL has passed, they can continue to attempt to collect the debt (including assigning authority or selling the debt to a collections agency).   The SOL just bars them from court action, not actual collection attempts.
If you would like to clear the debt, then I would contact them to discuss a settlement.  It will not reset the SOL or anything, so you can see what they will offer or what you can bargain down to as a settlement.

You can wait the debt out, but it will continue to severely depress your scores.

Just FYI: these accounts aren't truly deleted from your credit profile.  They stop reporting after 7 years, but if you request credit (think mortgage) of $150,000 or more, the lender can pull your lifetime report which would show these debts (if that's important to you, you may want to settle).

Quote from RobertEG:

"The fact that the exclusion provisions are imposed on the CRAs and not furnishers reporting to a CRA is further evidenced by FCRA 605(b), which exempts all of the normal exclusion provisions of section 605(a) in very limited situations, such as when a potential creditor makes an inquiry relating to a consumer-initiated request for credit in an amount of $150,000 or more.

In such circumstances, the reqesting credtor can receive a full report of any and all reported information irrespective of when reported."

You can ignore CK's "100% payment history" because that's just front end fluff that doesn't mean anything as far as your credit report is concerned.

You mention CK and TU, have you pulled all three reports from annualcreditreport.com?  You get a free consumer report once/year, and these reports have additional information that you wont' see from sites (not even Experian, Equifax, etc).  It might be worth it to you just to make sure you aren't missing anything, and you have the correct Date of First Delinquency (which sets the 7 year or 7y +180d, in case of collections, exclusion time frame)

[Anonymous]

Thanks for the advice calyx.  Yes they are private loans and not Federal.  I have my federal loans consolidated with Fedloan and am currently in my 3rd year of repayment (also was approved for the PSLF so have another 7 years to pay).  Ive been trying to see where to start off at negotiating.  Seen some suggest to let them make the first offer while others say to offer 25% to start as a lump sum and counter etc.  I did pull my other credit reports from Equifax and Experian and they all put the first date of deliquency the same 7/14, however on both of these its being reported as a charge-off and not past due like Transunion.  Also besides the two other accounts that I settled and paid (one will fall off 10/19, the other 5/21) my CRs are good.

[calyx]

I suppose the upside to you contacting them first is that they would know you're interested in settling and that might help get the ball rolling.

[Anonymous]

Before you do anything, I recommend you read up on the SOL. You still owe the debt and always will, but they have no ability to collect on it. However of you contact them, it's my understanding that you might reset the SOL. Personally I would just ignore it and focus on other things like retirement funds, emergency funds, etc.

[Anonymous]

Thanks Sabii. I will definitely read up more on the SOL. The only concern I have with not paying at all is that I read even though it will fall off my CRs after the 7 1/2 year period is that if I ever apply for a mortgage or anything 150k + that those loans will show unpaid (leading to declines or high interest rates)

[Anonymous]

To my knowledge, all the real collection abilty comes from having a judgement against you which they would need from a lawsuit against you. To use wage garnishments, levies, etc all requires a judgement. Otherwise, they're just trying to pester you into paying. The debt is no longer legally enforceable.
However acknowledgement of a debt will restart the SOL. Additionally, if you settle you the debt will likey still showed up as not being paid in full. After it comes off you credit report I don't think they will show up anywhere unpaid. You'll get a clean slate, and even sooner if you are granted early exclusions.

[calyx]

To speak to Sabii's point - if you do contact them with regards to the debt, you can let them know that you aren't acknowledging the debt, but you're willing to discuss terms.    Also, many debtors don't like to put things in writing, and while it might be legally questionable (or not, not a lawyer!), I would record any phone calls with them.  Definitely let them know you're recording.  Of course, it's only fair, they keep call logs, too.

And whatever you do, don't let them talk you into a 'promise' payment (I know some debtors will ask you to pay small sums just as a proof that you're serious about settling), that will definitely rest your SOL.

[Anonymous]

It varies by state. Pennsylvania is a two party state. You must get their consent to record them. If you don't, it violates federal law (Wiretapping laws). 7 years in jail, $15,000 and a possible civil suit.
If they don't let you record them, then they can lie. Who's to say you didn't enter into a repayment agreement = resetting the SOL.
I would really recommend taking to the mortgage thread. That's pretty much all we're taking about it possibly affecting after it falls off approx next Dec (early exclusions). There's a couple home loan experts on there that can tell you whether it's probably worth settling or not.
As far as a settlement, I did a few. They started off sending me settlement offers, usually 50% in 2 payments. The longer it went on, there lower the percentage and the more payments I could make. However they always needed the payments in a certain number of days. Imo it was a lot of money to fork over for the account to possibly stay on my report and be marked as settled. So I ended up making good faith payments until I paid off all the debt. Like Calyx said, feel free to negotiate and it doesn't have it one sitting. The less financially stable they think you are, the better terms they'll give you imo. 😁

[Brian_Earl_Spilner]

There's no guarantee they will drop after 7 years. Navient is still reporting on my reports and it just hit 20 years. They're the reason my AAoA is so high. Student loans play by their own rules.