Unfortunately, the tactics that have been described on some of the credit sites I've been reading haven't been working for me. I have a defaulted student loan that I'm trying to settle. It was originally held by my state guaranty company and sent to a CA. This was NOT a direct loan from the DOE. The CA (Diversified Collection Services) claims I owe a little over $5000, but in the itemized billing they sent me as part of the DV process, I noticed that over $1000 of that is in bogus "collection costs". There's no way they've spent $1000 working my account. The actual capital portion of the balance is a little over $3900. I offered to settle for $3150 (80% of the loan balance) and deletion of all derogatory TLs from my CR, but they've refused twice now. They say they'll accept nothing less than payment in full, including the "collection costs" and don't seem to want to negotiate. This is only a single loan, so consolodation is impossible, since you can't consolodate one thing. I have told them that I won't rehab the loan unless all of their bogus costs are removed from the balance. What other tactics can I use to strongarm them into either waiving the collection costs so I can rehab or accept my proposed settlement?
I don't think working a settlement with the CA is the same as "rehabing" the student loan. I think "rehabilitating" your loan is done with the DOE or with whoever you originally took out the loan with. They sometimes let you start making payments again, and after a few good months, put the loan account back on normal terms, etc ... It's kinda a goodwill gesture they do... but the CA does not do this. If you work out a settlement with them, they will start report this as a collection account and with as many derogs as they can figure to put on your credit report. Only agree to pay them if you get in writing that they will delete the entire tradeline or update it to say never late, paid as agreed, or similar. BTW, never take their verbal "word" about anything, always get it in writing. FedUp2003
Re: Re: Having difficulty settling with CA Yes, I know that rehabilitation and settlement are two different processes. "Rehabilitation" will remove the loan from default after 12 consecutive monthly payments, but I won't do this unless they get rid of their collection costs. Entering into rehab with those fees unresolved would be acknolwledging the legitimacy of their bogus "collection costs". I would prefer to settle rather than rehab, since I've been setting the money aside for quite some time to pay them if they decide the settle. While I'm setting aside money faster than interest is accruing, it will still take another year before I can catch up. They say that a settlement isn't valid because " can pay with a credit card". I do have a rarely used Visa with a $20,000 limit, but the reason I haven't been using it is BECAUSE I DON'T HAVE A LOT OF EXTRA MONEY TO PAY IT OFF! DUH! Most of my extra money gets set aside for the above-mentioned settlement fund. BTW, all these offers are being done in writing. The CA is under a partial C&D, so no worries about that.
Re: Re: Having difficulty settling with CA How have you been able to do this in writing? When I called about getting my loan in rehab, the guy started asking me questions about my employer and my phone number which I refused to give him. He said he couldn't put me in rehab unless I gave him this information. Obviously, I'm not going to give them any more info than I need to. I do not have the option right now of offering a compromised amount for settlement but I too am contesting ridiculous amounts added in "punitive" and "collection" costs that seem to change every time they send me another notice. Any info you could provide me with would be very helpful.
