What % settlement can I expect with Performant Recovery for a defaulted private student loan?

[Anonymous]

Hi forum,

I have a defaulted private student loan currently being serviced by Performant Recovery. 

The original student loan was with National Collegiate Trust and serviced through ACS.

What % settlment amount can I expect?  Is there a best approach to settle?   

I am currently in an agreement to make small regular payments each month.  This seems like it just helps them to reage the debt, but also keeps them from suing me I guess.

When I talk to them I feel they aren't honest, when I first contacted them they said they could settle for 50% but when I called back they said "oh now we can only settle for 65% because of the type and origination of the loan.  He said they don't own it and just service for the original loan company.  Is he pulling my chain?  Now I feel like I was too forthcoming being honest with him and telling him that I had a steady job now and was saving up to pay it off.

Is it advantageous to hire someone that can help negotiate on my behalf?  I feel like I might be able to do the negotiating on my own if I knew where their bottom line was on private student loans, but maybe it really does differ on the type and original provider of the loan?  Is it helpful to play hardball by offering a settlement % amount and then canceling my monthly payment if they refuse to negotiate?

Comments and help on understanding the commision that a credit counselor may usually charge to work on my behalf are appreciated.

Thanks in advance!

adastra2852

[Anonymous]

Are you in a loan rehabilitation plan with Performant (the 9-payment thing)? If so, once you make the 9 agreed payments, your loan is taken out of default and is sold to a new servicer. You then make new payments to the new servicer, notations of default are removed from your credit report (in many cases the TLs are completely removed), and you should see a good bump in your FICO score.

All of this can be handled on your own - no need for a thrid party counselor - but you have to know exactly what your position with Performant is.

[Anonymous]

Hi, Thanks for the reply.  I am not in a rehabilitation program, I just pay a set amount per month on a student loan that went into default a few years ago.  I am not aware of a loan rehabilitation program for private loans offered through Performant, have you done this with one of your loans?

[Anonymous]

Got it! The loan rehab program is available for FFEL and direct loans provided by the Dept. of Education. Sounds like that's not an option for you.

I have no experience with Performant on private loans, but my dealings with them have been fair. If they are willing to negotiate a reduced balance in exchange for deletion of the TLs, I would certainly purse that, especially if the default is still reporting. If the default is no longer reporting and the Performant TLs show that you are paying as agreed, that's probably helping your score.

[Anonymous]

Yes, that sounds right, luckily I never got behind on my federal loans, although those would have been easier to rehabilitate.

For the defaulted private loan with performant, I have a trade-line for the original loan that will drop off in a few years time, and then there is another "Collections" trade-line for performant which says "paying as agreed".  I want to settle on that one as soon as I can so that it shows "payed settled".  'Since I'm making monthly payments, I presume I'm reaging the debt each month, and the 7 year clock will start once I complete a settlement with them, so I'm a-bit worried about the "collection" trade line being on my report for another 7 years.  Maybe it will drop off with the original tradeline though, I've heard of that happening on collections accounts where the debtor never contacts the debt collector.

I will push on them to do a pay-for-delete on the collections TL.

On another note, I called up bank-of-america regarding a charged off credit card that went delinquent around the same time in 2011 and they would not do a pay for delete.  Which gives me very little incentive to settle with them.  Come'on BofA help me help you