Okay, so I will try to keep this brief. I am looking at options for what to do with my currently past due Fed SL balance. I put in a lot of hard work in the last year to restore my credit. Only to have a major life event happen that put a big screeching stop on my progress. Not an excuse but it is what it is. I have late payments since February from my SL provider. I am rapidly approaching default and want to know what best option to take. We haven't given up dreams of home ownership ( FHA loan), so that is the end goal eventually...within the next year or two for time reference. The way I see it, I have a couple of options.
A) Go into default, then to rehab, make the required monthly payments to have the lates removed from my report in 9 months (Is that still possible?)
B) Pay my past due balance (<3k) and start making monthly payments on time on IBR
My current balance is 114K in SL. My IBR would be $417. I was on IBR before but was switched to REPAYE (I've just learned today), at $1286, during this period of nonpayment.
Thoughts or advice appreciated.
Just wanted to update on the outcome of my original post. I contacted Great Lakes within a couple of days of my original post and was granted a forbearance on the spot. It was granted through 04/19 but not yet retroactively. I don't need that long and already have been discussing with the rep about pulling it out of forbearance early. My IDR needed to recertify, hence the huge jump in monthly payments. Easy peasy and done.
Yesterday, I sent a goodwill letter through the "contact us" option on their website. There was a specific dropdown for credit bureau questions. I copied and pasted my goodwill letter contents into that box and hit submit. Within 5 minutes, a lady emailed me back to let me know they have granted a retroactive forbearance on the late payments and have instructed 4 bureaus (EX, EQ, TU, and Innovis) to remove the information for those months. I don't know when I will see this reflected on my reports. My Myfico subscription updates on the 13th and I'm hopeful it has updated by then. Fingers crossed!
Thanks Sabii! Yes, I am considering myself quite lucky in this moment. For IBR > Repaye, I found out that it was an auto switch from IBR to REPAYE alternative because I failed to get my IBR paperwork resubmitted. The rep said I just need to resubmit and can switch back over with no issues. I am not necessarily aiming for forgiveness, but that will likely be the scenario that I end up in...25 years from now.