Navient Finally Made Me A Settlement Offer
Posted by tobey-maru@reddit | studentloandefaulters | View on Reddit | 56 comments
Hello Reddit.
Sharing my experience here to see if I can get some feedback and/or advice. I'm sitting at 6 months of not paying my Navient student loans. They've sent me a letter telling me I'm getting close to entering their litigation pipeline. Then, they sent my cosigner a letter offering to settle the debt for 70% of what I owe. I got on the phone with one of their agents to see if that was workable. I made an offer at 55%. They said no but then I said no to 70%, then they said 60%, this went back and forth a little bit until I gave them a number that I could live with. Now, I'm waiting to see if they accept that.
My question is, should I keep holding out? They tell me I still have 2 months before the litigation department starts looking deeper at my situation. I'm not really sure if I'll ever have more bargaining power than I do right now. Also, with the transfer to Mohela, I'm wondering if this is something that they are concerned about because of possible student debt forgiveness. Any input or insight would be appreciated.
dustystar05@reddit
I’ve held out for almost 3 years, and I’ve only gotten one settlement offer (right at beginning) my SOL is 5 years so almost 1.5 years left, so waiting to see if they offer anything the closer I get to the SOL. I would hold off and see if you can get it lower, and just put money aside in saving and wait, if they sue or have a better offer then you have that lump sum, if not it’s just extra cash you have later.
ReturnOfSeq@reddit
Once you hit the SOL they’ll keep sending better and better settlement offers to try to restart the SOL clock/get something out of you. If you ignore it for a few more years it’ll eventually drop off your credit report also
kylenn1222@reddit
What do you mean “reset the SOL clock”? If you settle, it’s over—isn’t it?
brighteyesburn@reddit
Talking to them in any capacity resets the SOL timeline according to a debt negotiator I consulted with
kylenn1222@reddit
What does SOL even mean?
brighteyesburn@reddit
Statute of limitations.
kylenn1222@reddit
Well, doesn’t it become a non-issue when you pay the settlement?
brighteyesburn@reddit
If your end goal is to pay a settlement, sure. If it’s to run out the statute of limitations, no.
kylenn1222@reddit
𝓘 𝓫𝓮𝓵𝓲𝓮𝓿𝓮 𝓘 𝓱𝓪𝓿𝓮 𝓪𝓵𝓻𝓮𝓪𝓭𝔂 𝓹𝓪𝓼𝓼𝓮𝓭 𝓽𝓱𝓮 𝓢𝓞𝓛, 𝓫𝓾𝓽 𝓘 𝓶𝓪𝔂 𝔀𝓪𝓷𝓽 𝓽𝓸 𝓫𝓾𝔂 𝓪 𝓱𝓸𝓾𝓼𝓮 𝓸𝓻 𝓰𝓮𝓽 𝓲𝓷𝓽𝓸 𝓟𝓛𝓢𝓕
SavagePlatypus76@reddit
😓
kylenn1222@reddit
So settling is not legit??
brighteyesburn@reddit
If you’re ready to settle then the SOL doesn’t matter.
AutomaticFeeling5324@reddit
May I ask how much did you owe? I am always under the impression if you owed under a certain amount they won't come after you because it is not cost efficient.
dustystar05@reddit
I believe before I defaulted it was like 23K. Original loan was for 8K and over 15 years of payments.
tobey-maru@reddit (OP)
They are telling me I still have 2 months before they "move it to litigation" but I imagine this just means I would go into the litigation pipeline and be in a similar position to you. I am curious if they get more interested in a lower number the closer I get to that 2 month deadline as well.
Signal_Road@reddit
Also see if you can send them a school misconduct application. It's available online.
AnyAssumption4707@reddit
This isn’t advice, just an fyi. but Navient threatened to sue me for like, five years and never did. I owed them a LARGE six figure debt.
Their offers tend get better and better (for you) the longer you hold out.
The thing is, they KNOW how much money you have, and if you’ve kept a good per trail, you should be able to prove you asked them to be reasonable and they refused. From my understanding, judges take that into consideration.
I never paid. They are past the SOL and off my credit.
Narrow_City1180@reddit
why would a judge even consider siding with you if you have money but wont pay?
AnyAssumption4707@reddit
Depends on the judge. If you have gone out of your way to attempt to pay/make reasonable arrangements to pay, and the lender has refused, the lender is FORCING you into default.
Some judges do think that is trash behavior (and it is). That nugget was straight from the mouth of a lawyer friend way back when I decided to strategically default (bcuz I did try, and the lender refused).
I’m not saying a judge would side with anyone that has the financial means to pay but just decided not to.
Narrow_City1180@reddit
no I meant, if you clearly HAD the money to pay but did not want to because the lender refused, which is what i took away from your earlier comment
AnyAssumption4707@reddit
Ah. I’m assuming that the OP can’t pay.
I’m not sure if you referring to the part where I say they know if you’re broke?
SavagePlatypus76@reddit
How long is the SOL? How does that come into being?
AnyAssumption4707@reddit
Depends on the state in which you live. Google “statute of limitations on private debt” plus the name of your state.
The clock starts from the date you made your last payment/acknowledge the debt.
AutomaticFeeling5324@reddit
I am in the same boat. Thank you for sharing. Congrats on passing the SOL. I don't have a lot of cash on hand either. Borderline becoming total disable, which means my source of income will drop dramatically.
AnyAssumption4707@reddit
Might be worth a consultation with a consumer law/contracts type lawyer just in case you want to know what all you could be in for (even legal aid if you can find it).
Disability rights attorney might have some useful info too.
Good luck, fellow defaulter. Navient can eat a bag of 🍆
AutomaticFeeling5324@reddit
I have a bankruptcy lawyer on hand. They charged 15% of the total loan amount.
Signal_Road@reddit
You should also look into if your school was part of the sweets vs cardona case. You may be eligible for borrower defense and a school misconduct discharge.
justbeaunicorn@reddit
Don’t speak to them on the phone. Apparently it resets the SOL.
I defaulted in 2017. They offered me many settlements. Never paid. It was charged off. This month it came off my credit report. My credit went up 64 points.
SavagePlatypus76@reddit
Damn it.
tobey-maru@reddit (OP)
New Update: I got a call from a new department today. Now they are threatening what they are calling a "Charge Off". I reiterated my 30% offer. They scoffed. The lady was extremely rude to me. They seem to only care about getting some type of payment from me without understanding that I refuse to be trapped in this perpetual cycle with them of financial re-evaluations every 6 months and needing to do financial reviews constantly. I ended up getting off the phone with her because of her way of speaking to me.
aFrothyMix@reddit
get strapped. practice. let them FAFO. Hot Lead is negotiable. be brave.
Nurse-Riyana@reddit
Hi can I please ask how much did your credit drop for not paying for 6 months?? I'm a bit worried about that since I would like to buy a house in the future
brighteyesburn@reddit
I went from 680s to 640s
Nurse-Riyana@reddit
That's not bad at all! Thanks!
tobey-maru@reddit (OP)
I can't remember exactly what it was before this, but I want to say 100-150 pts so far.
LisaInSF@reddit
Flare reflects a private loan but the question refers to Mohela… the loan servicer? Assuming it’s a private loan, if you offer a lump sum that shows them that you have cash, and maybe no significant hardship, so not sure where the bargaining power comes from. If you can pay the current offer (plus you are intimidated by possible litigation) then what is your argument for a lower number?
tobey-maru@reddit (OP)
Mohela is taking over Navient loan servicing.
brighteyesburn@reddit
They’re taking over servicing but not ownership. You’re still indebted to Navient.
tobey-maru@reddit (OP)
Yes, that is correct.
tobey-maru@reddit (OP)
Update: they accepted my offer at 56%. I decided to roll the dice and tell them that my source fell through but I was able to scramble and come up with something closer to 30%. They declined, but now I'm just going to wait it out a little longer. They said I will now move into their next level of delinquency. Wish me luck.
DisembarkEmbargo@reddit
I think you should wait out longer at least until December. They will give you a new handler every month. So you can roll the dice at least twice more to get that 1099C. The 1099C option ends January 6th 2025!! If you settle in 2025 you would get a 1048C (I might have the wrong form number) I believe - meaning you would have to pay taxes on the forgiven portion.
However, if your debts are more than your assets at the time of settlement than you can claim insolvency which is better than paying the taxes! I kept rolling the dice for a year or so and I got 32% lump sum.
Last thought: even if they take you to court or even send you a document calling you to court - you could settle during that time!
CromRex@reddit
Why do things change Jan 6, 2025? I thought student loan forgiveness was not taxable through the end of 2025?
DisembarkEmbargo@reddit
You are correct. It is 2026. My bad. I just checked Read IRS publication 17 page 68 Again.
brighteyesburn@reddit
Please update your comment to reflect the error so people aren’t confused when looking for resources
tobey-maru@reddit (OP)
Thank you. This helps me feel more confident. They were big mad when I retracted my 56% offer. They immediately called my cosigner and left a scary vmail about litigation.
DisembarkEmbargo@reddit
I love when they do that. If they wanted to sue you they would! They just don't want to spend that money yet.
Fyi my loans were charged off when I settled. I don't want to be misleading but your credit will tank for a bit. But mine is now only 40 points lower than before the default.
Good luck to you and your consignor!!
ReturnOfSeq@reddit
Eventually 30% is on the table, IIRC.
Also FYI: the forgiven amount is considered income for tax purposes, so get yourself ready for that.
Example: if you settle for 70% of 100k, you’ve effectively ‘made’ 30k
RevolutionaryEbb2522@reddit
Isn't that paused due to American rescue act
ReturnOfSeq@reddit
Dunno? My info may be out of date
DisembarkEmbargo@reddit
It's on pause until January 6th 2025 so only a couple months left of this.
brighteyesburn@reddit
It’s through tax year 2025
tobey-maru@reddit (OP)
They told me on the phone that they were not 1099-C'ing people currently.
justbeaunicorn@reddit
Don’t pay it.
jonsonmac@reddit
What’s the employment status of you and your co-signer? Can you afford a lump-sum settlement?
tobey-maru@reddit (OP)
Yes, we can.
jonsonmac@reddit
I have a suspicion that they have an idea of what you and your co-signer are worth. I don’t know this for fact, but there are resources like LexisNexis, the work number, and credit reports that can give them an idea. The reason I believe this is because my private loan lender was pretty quick to accept my 30% offer shortly after they were charged off. At the time, I had just finished with Chapter 7 bankruptcy, and my co-signer didn’t work. So that makes me think they were trying to get as much money out of me as possible.
If I were you, I’d probably hold off a little longer and see what they offer. The legal threats are likely just threats, but they should continue to accept settlements up until they file the actual lawsuit.
I’m not a lawyer, I’m just stating my thoughts on the situation.