Planning to default on Sallie Mae private loan
Posted by a-ndru@reddit | studentloandefaulters | View on Reddit | 62 comments
Has anybody gone through the process of defaulting on Sallie Mae?
I owe about 95k and I’m planning to defaulting in the upcoming months but I’d like to do it strategically.
DueGrapefruit5616@reddit
I’ve missed 6 months of payments to Firstmark services so far. My credit took a hit but everything is in my husbands name so I’m still waiting to see what’s going to happen next
Aggravating_Storm493@reddit
Hey there u/duegrapefruit5616
I’m (well, my dad) has a Firstmark loan too, that is going to default at the end of September. I wanted to message and see where you are now with them, if you don’t mind me asking. Thank you regardless of if you can answer or not
-C3rimsoN-@reddit
I know this post is old, but I defaulted 7 years ago. $99k private debt from Sallie Mae. Right around the start of the pandemic. It was fantastic timing with all the chaos going on, I was mostly able to slide under the radar. Helps that I live in a state where private student loans aren't privy to wage garnishment and I didn't have any assets to put a lien on at the time. My credit was hurt for the first year, but started recovering by the second year. I made sure to make any major financial decisions before defaulting (i.e. got an apartment, car, etc.). I got a lot of calls from Sallie Mae for the first year until it was charged off and sold to a collections agency and then they called and sent letters for a year. My plan was to get over my state's 4 years statute of limitations. I made it and as stated, it's been 7 years and the credit is off my report. I still occasionally get communications from collections agency, but it's like once every 8 months or so and it's usually a text message telling me to "call them to sort out the debt". Knowing that they literally can't do shit at this stage, I just ignore it. My credit is now around 750, me and my fiancée live together and we're saving for a home. Best decision I ever made was defaulting, as I really didn't have any hopes of paying on a debt I attained when my brain wasn't even fully developed yet. It's shameful how predatory student loans have been.
Same-Breath-4059@reddit
How long does it take for you to officially default on the loan? My current monthly repayment is $1200 which is absolutely insane and they refuse to lower it. Defaulting seems to be my only option.
-C3rimsoN-@reddit
Yeah story of my life lol
Honestly, it's been so long that I don't really remember, but I think it was around 6-8 months. They really didn't want to see me default, so after the first few months they called to try and set up some sort of payment plan. Basically, they'll only lift a finger to explore options when you start missing payments and that's only to string you along. Even if you contribute $1 to the loan, it's enough to reset the statute of limitations. They'd rather keep you in debt than explore any reasonable options.
Keep in mind, this advice really only pertains to private student loans though. Unfortunately, federal loans don't have a statute of limitations and can run indefinitely (but there are far more options for dealing with them like forgiveness after 10-30 years depending on the repayment plan).
Same-Breath-4059@reddit
Ugh mine are through Sallie Mae. So incredibly predatory, I wish I knew what I was getting into when I was young. I was on a repayment play for around $850 per month but when that ended they said I couldn’t reapply for any other repayment programs for another year. Soooo, they haven’t been paid since. Wondering if it’s worth calling and see how much per month they can lower it.
-C3rimsoN-@reddit
Yep same here! Sallie Mae loans are private loans, so they fall under consumer debt, which means they are are applicable to whatever your state's statute of limitations are on debt. If the servicer doesn't sue you within the time limit of your state's statute of limitations, then they essentially can't sue you at all to collect on it. Some states have outrageous statute of limitation time limits though, but the average tends to be about 6 years. I'm lucky in that my state (Pennsylvania) has a statute of limitations of 4 years and consumer debt cannot be paid through wage garnishment. So the only real hope for Sallie Mae were to put a lien on any assets that I have, which at the time that I defaulted, I didn't have any assets. So there was nothing Sallie Mae could gain by actually taking me to court to sue me for the debt. Aside from that, I'm one victim of their predatory practices out of thousands and I figured they wouldn't bother suing one person when they had nothing to gain. I was right and after a year of default, they ended up charging it off and selling the debt to a collections agency. After 4 years, the debt is past my state's SOL, so I can't be sued for it anymore. It's since been 7 years now and it's fully dropped off my credit. I occasionally still get text messages from the collections agency, but they've mostly given up.
The problem with the payment plans are that they keep the debt from ever going over your state's statute of limitations. So you're stuck with it forever. Sallie Mae are a bunch of greedy, predatory fucks, so they'd be more than happy to get you on a payment plan the moment you stop paying to keep you stuck on the debt indefinitely.
nfjfnfkdndnd@reddit
I had over 100K with Sallie Mae. For high balances they usually don’t keep them with their internal debt collections once defaulted. They will most likely sell them to a debt collector. They sold my loans to Southwood Financial who is represented by one of the most aggressive debt collection law firms in the east coast Weltman, Weinberg, and Reis. I started getting letters this spring. I defaulted in January. SOL in my state is 4 years.
dannydelco@reddit
They will sue. Which is Not the end of the world. Have handled quite a few in PA.
nfjfnfkdndnd@reddit
Can you elaborate please?
dannydelco@reddit
Being sued is not the worst thing that can happen because often you will still wind up paying less - sometimes much less - than has you addressed it earlier. Much better to be sued by Southwood than by Sallie Mae. In some states these lawsuits can be defended and sometimes beaten by a good debt defense lawyer. Or settled for a pretty substantial discount.
nfjfnfkdndnd@reddit
Random update, I recently received letters from a new law firm Abrahamsen Gindin LLC. Does this mean that the debt already been sold/passed along?
dannydelco@reddit
Passed along, yes. Sold again, can’t tell. It is fairly common for accounts to be transferred to different collectors or law firms. The firm you mentioned is another PA law firm, in the same geographic region as the other. Save the letters.
nfjfnfkdndnd@reddit
Thank you 🙏I’m saving everything
nfjfnfkdndnd@reddit
Thank you
Putrid_Factor_2660@reddit
My Sallie Mae loans were sold to Southwood, too, and with WWR as their collector. I owe about 26,000 dollars. I have no income, no house, or a car. She has SSDI, and her home is exempt from having to pay taxes. I'm trying to apply for SSI. My mom's home is a 1970s trailer on 3.2 acres of land, which serves as a primary home in Mississippi. She has two cars that are over 25 to 35 years old.
shuttheduckup123@reddit
I default end of this month in PA too
dannydelco@reddit
Feel free to reach out if you are in PA. CreditLawyers.com.
shuttheduckup123@reddit
Messaged you
justbeaunicorn@reddit
Yes back in 2017/2018. I specifically had tuition answer through Sallie Mae. They sent many letters. Threatened litigation. Called my job. Eventually they offered to settle the debt for half. I still did not respond. It was very stressful. But I’m glad I did it. Last year the loans were removed from my credit report and my score increased to over 60 points. No more calls, no more letter.
Easy-Passenger-7864@reddit
I also made it through the gauntlet. Congrats to you!
nfjfnfkdndnd@reddit
How often were you contacted by any attorneys? I’m so curious. Good for you though!!
Easy-Passenger-7864@reddit
When a new collection company or law firm contacted me I would let them send about 3-4 letters (about 3-4 months) before I sent my letter asking for validation of debt via promissory note and all other legally binding documents. At that point, they responded with “ thank you for your time, your account has been returned to Navient. Please contact them going forward.” It would then take about 2-3 months before another law firm or company sent me a letter and I would repeat the process.
I would never talk them over the phone.
justbeaunicorn@reddit
Thank you! Cheers to you too.
a-ndru@reddit (OP)
You never got sued?
Misslieness@reddit
If southwood financial trust ends up involved after you default, they will definitely sue. But other companies tend not to be do aggressive. Currently being sued by them for less than your principal.
nfjfnfkdndnd@reddit
How long did it take them to sue you after defaulting? I’m dealing with them currently
Misslieness@reddit
just over a year. currently trying to reach a settlement before the court does
miranlopez11@reddit
Did you reach a settlement?
justbeaunicorn@reddit
My only regret is not doing it sooner. I was listening and reading online how bad it is to default. I came across a blog of a guy who strategically defaulted. I remember his blog being very detailed on his journey. He was offered many settlements which encouraged me to default. I was initially hoping to settle. The collection agency offered more half to settle. But my SOL was only 3 years and I realized that I just don’t have the money. I have federal loans.
a-ndru@reddit (OP)
I’m going to to try and look for that blog. Thank you!
pennnygal@reddit
Please let me know when you find that blog I am miserable paying my monthly for them I can barely afford to freaking eat at this point.
a-ndru@reddit (OP)
I did look for it but wasn’t able to find it. I will be defaulting on it by the end of the year.
justbeaunicorn@reddit
No I did not. It was somewhere in the 80s.
Burningfields74@reddit
This is exactly what I’m planning to do. I borrowed $9K. I’ve paid $13K. I STILL owe $14K. I’m at the end of my rope w/ this company.
a-ndru@reddit (OP)
I wouldnt default for 14k, try to refinance that.
Burningfields74@reddit
👍
CharacterFuzzy3398@reddit
Defaulting on a loan like Sallie Mae can have serious consequences, including damage to your credit score and collection efforts, so it's good to think it through. If you're considering it, it might be worth talking to a financial advisor or at least exploring options like income-driven repayment plans or loan consolidation first. Btw, I found this Comparison Chart of Student Loans Companies helpful.
LemonVisualx_0@reddit
honestly, i've been in default for about a year now and while it's scary at first, it gets easier. the constant calls and threats eventually become background noise, and you start to realize they have limited options to actually collect. just make sure you're mentally prepared for the stress and have someone to talk to about it when it gets overwhelming. also, i found this comparison chart of student loans companies pretty helpful when weighing my options.
LemonVisualx_0@reddit
Defaulting on Sallie Mae might seem risky, but if you're thinking outside the box, consider trying to leverage the situation—like offering a settlement, or maybe even using creative legal strategies to delay collections or negotiate a better deal. Sometimes, if you get lucky or think unconventionally, you might find a loophole or a way to turn the system in your favor, especially if you stay persistent and resourceful. Remember, lots of folks have gone through this and come out the other side with some unexpected wins. I found this Comparison Chart of Student Loans Companies helpful.
a-ndru@reddit (OP)
Word salad.
lf1216@reddit
I defaulted, got sued, ended up in mediation… I have to pay the full balance but no interest and they settled for a low monthly payment.
Odd_Investigator_736@reddit
What is mediation?
lf1216@reddit
When both parties agree to meet outside of court to try to come to an agreement
Odd_Investigator_736@reddit
Oh, so in other words, you were served court papers, but this was settled before coming to the point of both sides talking to a judge about it, correct? Out of curiosity, are you happy with the result?
lf1216@reddit
Yes, I was served and there was a trial date but since we settled in mediation we didn’t go to trial. I honestly thought I would at least get to pay a percentage of what I owed but they did not budge on the total amount owed. That was a little disappointing but, at very least I got a manageable monthly payment and no interest. I’ll just be paying it for like 20 years 🫠
oandlomom@reddit
I’ve already been paying for 20 years and I owe only $5,000 less that what I took out 😥
Odd_Investigator_736@reddit
Damn, I'm sorry. I mean, I guess it's better than wage garnishment, like way better, but still essentially something you gotta live with. The last thing I received from them in the mail was an intent to litigate letter around the time of Easter. Whether that's a scare tactic/bluff, I don't know, but they succeeded in the scare part. I haven't contacted them or anything, God forbid I reset my SOL and give them all the more opportunity to sue, but I'm definitely sitting on the edge of my seat dreading what could go wrong.
CVXLOVE@reddit
What about when u want to get a mortgage? I am dealing with trying to. I was paying the minimum amount on my student loans until Covid. Payments weren’t required and never initiated again. I just applied for a home mortgage and found out that 2 weeks ago it was sent to collections. I didn’t get any notice . Now I am not sure I will be pre qualified for a home I want. Any advice very much appreciated.
oandlomom@reddit
Only federal loan payments were paused during Covid, not private.
CVXLOVE@reddit
Is there a place anyone can direct me to to try and navigate getting a home loan with my student loans just sent to collections?
Safe-Education-8175@reddit
Why? Have you considered other options? DM sent.
mizmaclean@reddit
No one asked for your dms. This isn’t cool.
TechnicianIcy1644@reddit
Just dont pay and then change your cell phone for 7 years./s they can only force you to pay federal loans.
a-ndru@reddit (OP)
Well, I just put my apartment up for sale and I’m moving overseas and my family is going with me, so they’ll have a hard time contacting me.
Odd_Investigator_736@reddit
I'm currently in the process. Utilize a free consultation with a lawyer who handles this stuff if you can. Might get some invaluable legal advice and strategies for this that we redditers fall short on knowing. Don't ever again talk to Sallie Mae/Navient/Mohela/whatever the hell they're calling themselves these days because you'll otherwise probably reset your SOL. It's possible they may eventually offer you a good settlement deal (after many crappy ones to begin with), so if there's a settlement you can afford, that would be better than running out the SOL because the debt doesn't actually go away with that route (you just can't be sued, but you might also never be able to buy a home either or the like).
Training-Tree8467@reddit
About to officially default end of this month, be prepared for a lot of calls before you default and a MASSIVE hit to your credit score. Mine dropped from a 735 to a 495. Family members who I’ve never lived with called and even my ex bf who I lived with. But I will say- I spoke to a family friend who was a debt collector and attempted to negotiate a lower monthly payment with them and they would not budge. So I had no other real options.
nfjfnfkdndnd@reddit
My credit score only dropped 100 points surprisingly it was 700 and is now around 600 and has been increasing a tiny amount since. I have no idea why. I do pay all of my other bills on time but I really expected it to hit the 400s
porygon766@reddit
Im planning on doing the same or leaving the country
a-ndru@reddit (OP)
This is exactly what’s I’m doing lol
eyesoflazarus@reddit
I will probably have to at this point. I’ll be back on this thread to see what ppl have to say. Good luck <3
StudentLoanShutdown@reddit
Yes, many already have. Check out r/studentloanshutdown