Seeking advice as I approach defaulting on private student loans
Posted by Quick-Zebra-4381@reddit | studentloandefaulters | View on Reddit | 24 comments
Seeking advice as I approach defaulting on private student loans. My federal loans were all forgiven with the Biden-Harris forgiveness in May. However, I have a great deal of old private student loan debt through Sallie Mae/Navient from when I made the mistake of going to The Art Institutes for one year back in 2008-2009. I’m not sure of the exact amount as I have moved a few times over the years and cannot locate my original paperwork. I also haven’t logged into my account in years and now that Navient is rebranding to Mohela I can’t seem to access the account to discern the amount. I know that it’s a great deal, even though I only attended about a year at AI.
Originally, my father was the cosigner, but he passed away in 2020 and was released from attachment to this debt. I think my last payment to Navient was in April of 2020, then the following month I went back to college to study computer science. I just finished my degree this past May, and what with the deferments from Covid, being in college, etc, I’m not certain where the timer on my SoL might be or if that timer only starts once you’re in default?
I’ve received several letters from Navient noting that I’m approaching default. I changed my phone number and haven’t responded to them at all. Mostly because I can’t afford to pay them, and really don’t want to give them anything. This past week, Navient started casting a wider net, calling people related to me and a close friend to see if they can get my contact information. My current situation is that I am unemployed and live with my significant other and his mother, and I have no assets beyond a car that I co-own with my significant other. I really don’t care if my credit takes a nosedive and am happy to wait out the timer if it means not giving the sharks a dime.
I figured I’d reach out here and see if anyone might be able to offer some advice or possible answers to my questions.
- Is there any indication of when the statute of limitations timer begins?
- I am also uncertain as to which state’s SoL I should base it on, because the loan paperwork was signed while I was living in Virginia, and the school I went to was in Illinois. However, I now reside in New Jersey.
- I know that there is a school misconduct application floating around and that I could likely use it given the allegations and my experience with AI, but have been fearful as to whether or not this might mess with any plans to strategically default? I also know that many of the applicants for this relief have been denied.
- If I strategically default, are there any dos and don’ts to keep in mind?
- My greatest concern is the possibility of a lawsuit. Given my current living situation with no assets, no income, no job, is it likely at all that I will be sued?
Apologies for the wall of questions. I greatly appreciate any advice on this. Thank you in advance.
capresesalad1985@reddit
I’m in NJ, I defaulted in 2018 (they say my last payment was in the spring of 2019) and two of my loans just got picked up by some bottom feeding company in FL and sued me. I got served on the 13th. I spoke with one lawyer who said my best bet is settling so I plan on getting one more legal opinion and then calling and offering 10% and see if they will take it. I have 5 loans floating out there and they served me for 1 but they know about 2. It just chaos my ass I have to pay a scumbag company like this ANYTHING.
WhoTookMyNameNeyM9M@reddit
How did you get served?
capresesalad1985@reddit
Someone came to my house and my husband was home
WhoTookMyNameNeyM9M@reddit
Oh damn.
capresesalad1985@reddit
I ended up settling for a monthly payment for the next 7 years. Booooo but atleast I don’t have to go to court.
WhoTookMyNameNeyM9M@reddit
As long as you can make it work. I’m trying to figure my stuff out so seeing this post and your responses are helpful. I’m out of USA so wondering how they can notify me lol
capresesalad1985@reddit
Oh absolutely, if they can’t serve you don’t pay them anything
WhoTookMyNameNeyM9M@reddit
Thank you! Appreciate you
Quick-Zebra-4381@reddit (OP)
Wow, I’m sorry to hear you got served. I keep trying to hold out faith that I wont be worth their time and expense in suing since I’m judgement proof with no assets or job/income.
My soul refuses to be chained to paying this, especially when my federal loans were all forgiven because of the school’s misconduct. My private loans should be too by that logic but the federal government doesn’t control those.
burn3r_222@reddit
Sallie mae is the only one I would be slightly worried about. I barely owed anything and they still came after me. The only reason they are getting a dime from me is because my grandmother was the cosigner and I just can't leave her like that after she has done so much for me. I defaulted and now have to pay like 5x what monthly payment used to be. Sallie Mae is heartless and predatory. Unfortunately for me, the SOL in my state is 20 years. So, there was really no avoiding that. Not sure if they sure, but after 4 years they sent it to a 3rd party and that's ultimately when I had to figure something else out to be able to afford the new payments.
WhoTookMyNameNeyM9M@reddit
F damn. I have sallie mae and was thinking of defaulting. Maybe I should take a personal loan to cover SallieMae? and default them instead if it comes down to it ?
burn3r_222@reddit
So I ended up settling with Sally May. My grandma actually just passed a week and a half ago but I settled with them back in March or April. I owed 22,000 and they took 5000 to close the account out as paid un full. Honestly defaulting was the best thing I could’ve ever did and now my credit score is back up to 700 so it was worth it all in the end. F SALLIE MAE!!!!!
WhoTookMyNameNeyM9M@reddit
Thank you! Appreciate the response!
justbeaunicorn@reddit
Your private loans won’t be with Mohela. It is possibly under aid advantage. Just don’t contact them. If they call, hang up the phone.
I stopped paying fall of 2017. It was rough because they called and sent letters. Called my job. My credit took a nose dive. Well, I’m happy to report that the SOL has passed. The loans came off my credit report and there are no loans when I log into my aidadvantage account. My credit skyrocketed to over 50 points. You’ll be fine. Stay the course.
Longjumping-Syrup278@reddit
Approximately how bad was the nosedive? That’s my main worry…and in the period where your credit took the hit, were you able to be approved for anything or were you denied due to the default? Trying to figure out how bad this will be. I defaulted over 10 years ago, so I cannot remember. Thank you.
justbeaunicorn@reddit
I don’t remember the amount of points. But it was bad. Some of my credit limits reduced. I was able to apply for a personal loan 4 years later. I wasn’t really concerned about applying and getting approved for anything. I wanted to lease a car which I did the month before I defaulted. The hit to my credit was worth it.
davebone6195@reddit
Not necessarily will they be with Aidvantage. Mohela took over all of Navient’s private loan debt.
If you want a number to call, 866.963.1599 - M-F 8am-9pm EST.
Good luck. I am 6 months into a strategic default. If you do call them, just make sure not to mention anything about promise to pay any money. That could potentially restart any SOL clock you may already have going.
justbeaunicorn@reddit
I told them it will “possibly” be with Aidadvantage. Mohela did not take care over all of Navient private student loans. I had Sallie Mae loans which transferred to Navient which eventually went to Aidadvantage.
davebone6195@reddit
Actually, yes, all private loans from Navient went to Mohela.
Federal Loans went to Aidvantage.
Navient Private Loan Transfer
justbeaunicorn@reddit
How could you tell someone who has government and private loans where their loans went? You are wrong. My federal loans went to Mohela and my private loans were handled through Aidadvantage.
If it is true, that’s recent.
Quick-Zebra-4381@reddit (OP)
My federal loans definitely went to Aidvantage and were all forgiven this past May when the president forgave the federal debt of those who went to the Art Institutes.
Mohela now has my private loans. All my threatening letters have their letter stamp on it and come from the same address as Navient in Wilkes Barre, PA.
justbeaunicorn@reddit
Ok, so you are aware of who your lender is. So you can figure out what your next step should be. I personally would not call them.
My federal and private loans were with Aidadvantage. My federal loans transferred from Aidadvantage to Mohela a few years ago. It’s now with Edfinancial. My former private loans were with Aidadvantage. Even when defaulted, it was on their website. Thankfully, everything is now removed from my credit report and their website. No more letters. Credit increased by 69 points.
Good luck!
Quick-Zebra-4381@reddit (OP)
Thank you for the advice! Your story gives me hope and clarity on this ^_^
vsandrei@reddit
Virginia is five years from the date of last payment.
New Jersey is six years.
New Jersey might have a borrowing statute that allows you to "borrow" the Virginia SOL.
There may also be a choice of law provision in the original contract that allows for another state's SOL to be used.
Pull your EDR from Equifax The Work Number, your CR from Lexis Nexis, and your ChexSystems report. Review the New Jersey exemptions from execution.
Whether a lawsuit will be filed is likely a function of the loan amount, whether the plaintiff is an original creditor or a subsequent assignee, and whether they think they can actually collect from you.
You sound almost entirely collection proof. Retitle the car entirely in your significant other's name only if you are super paranoid.
Adverse credit reporting is up to 7 1/2 years from the Date of First Delinquency, indefinite if you ever apply for a job paying > $75K/year in salary or credit with a principal > $150K.
Beware that judgments may live for longer times and do not show up on your standard three bureau credit reports.
Good luck, and I am rooting for you.
P.S. IANAL. I just read a lot about debt collections because I have my own issues and do not want to go into a Chapter 13 debtor's prison while assholes like Giuliani openly abuse the bankruptcy system.