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Im desperately trying to find the best way to get rid of this Student Loan debt, with the least impact to my credit (especially since it currently has 0 effect on my credit....I really don’t want that to change).
+1 on Sabii's recommend to rehab. You could end up with some pretty sweet aged lines.
I'm not sure a collection agency would be willing to settle (I assume you mean settling for less than 100% of the amount owed) because they have federal backing to collect (wages, tax return, social security), but if they would settle and you can pay the settlement in full, I might go for it just to be out of debt and out from under the student loans.
Good luck.
@Anonymous wrote:
For maximum benefit, I would consider rehabbing. After 9-10 months of payments it will put it back on your credit report in good standing. You could then pay it/ them off and have a good tradeline for 10 years.
I have read elsewhere also, that rehabbing is a great option. The reason I am reluctant to rehab, however, is that I am reluctant to volunteer my financial info over to the collection agency. Last year I made a large amount of money and, because of that, I fear that the payments they would ask of me to fullfill the rehab agreement would be way to high for me to actually afford to pay. Also, I have multiple sources of income, and although I am currently being garnished from 1 source, I am not yet being garnished from the others, and I feel like that would just be an invitaion to them to hurry up and do so.
What do you guys think? Help!!!
@calyx wrote:+1 on Sabii's recommend to rehab. You could end up with some pretty sweet aged lines.
I'm not sure a collection agency would be willing to settle (I assume you mean settling for less than 100% of the amount owed) because they have federal backing to collect (wages, tax return, social security), but if they would settle and you can pay the settlement in full, I might go for it just to be out of debt and out from under the student loans.
I've read that they are allowed to settle and often do, particulary in instances where they think they won't get they're money. If I could settle and get them to cancel the collection fees from the debt and possibly lower the amount due, I think that would be fantastic to get this out of the way. But my fear remains that my credit may be hurt by the reemergence of (a) negative trade line(s) on my credit report becasue of settling.
On the other hand, if that is the case, like you said, the aged lines that rehabbing would provide would indeed be very sweet.
@Anonymous wrote:
However if you made the amount that you're saying you make, then it's highly unlikely that you cannot afford the payments. The more you make, the more likely that you can move it around from things that aren't necessities.
I would take a close look at what keeps you from making the payment they ask. If it's necessary financial obligations, then you're better off filling out the income and expense form, submitting your paystubs, etc. and whatever it takes to get the loan back on track. It might be difficult to make the payments with the garnishment, but you only have to make it work for 5 months. It's a one-time deal.
Other than that, you could potentially try to settle the debt. It won't get you anywhere near the benefits of rehab though. I would recommend consolidation without voluntary payments before I would recommend settling.
I can't afford the high payments because of other financial obligations. Mainly huge credit card debt that was paid significantly down and continues to be paid by the income from over the past year. Additionally, things like high cost of living, and other bills and obligations, not to mention the current garnishment that is happening.
I was only aware of the income tax submission, but I wonder with the other option, could I only submit the paystubs from the job they are garnishing, or do they ask you if that is your sole source of income, and if not, list all others?
Why do you think settling should be my last option? You don't think getting rid of the debt, quickly and potentially for a lesser amount than is due is a great benefit of that option? Particularly since the Collections Agency is tacking on fees that are showing a due amount of over $4000 more than what is actually still due on the loans, according to the Federal Government site!
Also, should I rehab, consolidate or settle, do I HAVE to go through the Collections Agency, or can I deal directly with the current lender or current guarantee agency?
I have about $20,000 in very old defaulted Federal Student Loans that are in collections and have also aged off of my credit report ages ago. My wages have recently begun to be garnished and I want to put an end to this for once and for all. Should the Collection Agency be receptive to settle, and I pay them off, will the loans reappear on my credit report after all those years, and negatively impact it and my score with say a “defaulted and paid less than owed” tradeline that would tarnish my report for a new 7 year period?