Federal loan defaulted. Now passed to a debt collector. Does it still retain federal loan benefits/qualities?
I have a private loan and federal loan. After some confusion with my parents -- who pay the payments on the private loan -- I realized they were not paying the federal loan. That was my responsibility... But since I always seem to get spam letters from counseling companies, consolidation companies and others etc. I didn't realize ECMC was a legitimate company with current ownership to my federal debt. Then the federal loan defaulted on 6/29/11, and knowing no better, I discarded the letter. In May '12, I received a letter stating that the loan has now been passed to a Debt Collector (Premiere Credit of N. America LLC). and seems I need to contact them within 30 days
Is it all possible to re-contact the last guarantor (ECMC)? And bypass the debt collector to renegotiate? I highly doubt this but figure it wouldn't hurt to ask.
But... what I mean by the title, and correct me if I'm wrong, is what areas can't I negotiate with the DC that I could with ECMC? The DC lists Total Principal, Total Interest on Principal, Total Collection Fees and Total Balance on the letter that was sent. The very least I figure I can negotiate the collection fees and possibly have them lowered/cleared. But is there negotiating room with the Principal and Interest? Is my loan still eligible for certain repayment programs? IBR? ICR? 10/10? Not that I know a whole lot about them at this point.
I am not very familiar with my loans... but like many, I'm trying. I'm brushing up on as much info as I can come across.
Any and all help is appreciated. Thanks!
Student loans are assigned to collection agencies under contract
Student loans are assigned to collection agencies under contract, so no, you cannot work with ECMC. While in default, you are not eligible for much of anything...no deferment, forebearance, IBR/ICR.
Your options.
You can settle...one time payment. They will waive a portion to all of the collection fees. Do not expect any interest and definately not any principal to be waived.
Rehab....9-0 consequitive monthly payments, generally calculated as a 1% payment. So $10k balance would be a $100 monthly payment.
Collection fees reduced to 18.5% and capitalized balance upon rehab...negative information removed from the credit bureaus.
Federal Consolidation...apply thru Direct Loan Consolidation. You will be assigned to either IBR/ICR repayment. Deferment priveleges restored. Negative guarantor information remains. Takes 6-12 weeks to go thru.
Thanks for replying SOAPLADY. It's very appreciated. Kind of wh
Thanks for replying SOAPLADY. It's very appreciated.
Kind of what I anticipated. Being in default is not all good.
But I don't mind losing deferment/forebearance, as I really am trying to own up to everything right now. It was about 5 years ago where my credit looked immaculate, I'd like to get it back there but I'm aware that it will be a long process.
Settling is out of the question. The total balance is ~29K. I don't have nearly enough money to settle, I'd assume. Though I will ask, just to know.
It seems like Rehabilitation is more the avenue for me. What are my chances typically in receiving that option? Would you say 'likely'? Are there general repayment time frames when in Rehab? Would I still be eligible for forgiveness after a period of time? My guess is no. Just so I'm clear, when you type "9-0" you plainly mean "90", correct? I don't want to misinterpret that.
With the negative info removed from my credit report. This helps me in what ways? I can assume rebuilding my credit but help speed the process? I can see my future in my career involving investments of some sorts, obviously along with wanting to buy a home and etc. Is this a more appropriate option in my case?
Looking forward to hearing back from you or others. Thanks again!
Quote:It seems like Rehabilitation is more the avenue for me. Wh
Quote:
It seems like Rehabilitation is more the avenue for me. What are my chances typically in receiving that option? Would you say 'likely'? Are there general repayment time frames when in Rehab? Would I still be eligible for forgiveness after a period of time? My guess is no. Just so I'm clear, when you type "9-0" you plainly mean "90", correct? I don't want to misinterpret that. |
Ooopps...meant 9-10 months. And you can ask to participate. Your monthly standard payment would be about $300 per month to qualify.You could go less with "reasonable and affordable" payments but that will require lots more work and documentation.
Quote:
With the negative info removed from my credit report. This helps me in what ways? I can assume rebuilding my credit but help speed the process? I can see my future in my career involving investments of some sorts, obviously along with wanting to buy a home and etc. Is this a more appropriate option in my case? |
It definately will improve your credit. Then once the rehab has gone thru in about 10 month, you apply to the Direct Loan Program and consolidate. It is a two step process.