Defaulting Navient/Earnest
Posted by RevolutionaryEbb2522@reddit | studentloandefaulters | View on Reddit | 17 comments
I owe about 190k in loans total and I've been paying 2k a month since 2022 and my loan balance has only decreased about 3k. I've reached out to Earnest multiple times to lower the monthly payment. I make a decent amount but that 2k a month is a big part of my check and I honestly will spend the rest of my life paying those loans and I don't see it to be worth it when that money could go towards a house, car, childcare etc. It's really hard to plan my life because it's revolves around these loans. I don't mind paying 900 and under a month but 2k is ridiculous. I've been considering defaulting and reaching out to a lawyer to offer a settle amount. I was curious once I settle would my credit score go back up and the default be removed from my credit? How would that impact me filing taxes? I'm looking to settle for 70% or more on the loan.
Elk_Dramatic@reddit
Similar spot. 100k of debt, 1k a month. I have a wife who doesn’t work and two kids. 1k a month is a lot to us. I just defaulted and the calls are coming in. I haven’t answered yet but the tone of the voicemails is, “ you’re in trouble and we have some options” I’ll let you know what the options are at this point.
Elk_Dramatic@reddit
I spoke with a lawyer and he told me that if I have a judgement after getting taken to court by my lenders, there are high fees associated and my response was “okay, so they take everything I have to satisfy that, but then I’m free and it won’t cost me 100k.” This lawyers answer was that they will take everything they can get and then in 6 months, come back and take everything, again and again, until the 100k PLUS the fees and fines associated with defaulting on that loan. Now they would need to take me to court, etc., for that to happen but still a possibility. I haven’t looked at the fine print on my loans yet, but he told me it can sometimes triple the original loan amount. Aka totally fucked.
So I called Navient and told them I’m not paying unless they bring my payment down. Was able to negotiate halving my interest rate for 6 months. I’m using this time to gather more info and probably speak with another lawyer and see if there is a differing opinion.
sher_love@reddit
Any update?
Sometraveler85@reddit
Have you tried to settle yet??
Elk_Dramatic@reddit
Ended up not defaulting due to legal advice so didn’t get to that point.
RevolutionaryEbb2522@reddit (OP)
Pls do
Moneycome2me@reddit
Similar situation. Had 210k in private student with Earnest that I refinanced with them to get out of a Sallie Mae loan with my mother as a co signer. The 90 day late just hit my account this week and tanked my score to about 580. I don’t really care about the fico because I am not paying 1900 a month. Waiting to either settle or see if they ever sue me. Either way they will never get that much from me again.
arixsafariii@reddit
HI there! Did Earnest ever sue you? Thinking of defaulting on my loans but I don't want to get sued. Even with a settlement, we won't be able to pay right away.
Moneycome2me@reddit
No
RevolutionaryEbb2522@reddit (OP)
Hi how many months of missed payments put you in default for earnest ?
RevolutionaryEbb2522@reddit (OP)
580 from what if you don't mind me asking?
Moneycome2me@reddit
RevolutionaryEbb2522@reddit (OP)
Can you bring it back up ?
Moneycome2me@reddit
Absolutely over time my credit score will be back but I strategically defaulted. In other words over the last year I’ve been getting all the credit cards I need, purchased a new bmw. I leveraged my credit for everything I needed prior to letting my FICO go down the drain. My house is fully paid off but in my mother’s name. On paper I have no assets other than my other 2012 accord.
RevolutionaryEbb2522@reddit (OP)
Because that's a huge drop for only 3 months of missed pay
TWOscore11@reddit
I am in a really similar situation with a huge monthly payment. I couldn't see a future where I'd be able to save any money, invest, or basically be free. So yes, default sounds like the only way to put an end to that.
Your score will get hit initially and then go back up over a couple of years as long as other things are getting paid on time etc. I don't think you can work on a settlement really until you've actually defaulted. If you ask to settle before that then the lender still has leverage to say no (your credit score).
RevolutionaryEbb2522@reddit (OP)
Got it, I've been in contact with lawyers just to ask how the process would go. I just wanted to know afterward would I be able to buy a house or rent an apartment