How do I know if I have defaulted on SL?

[infitiator]

I have Sallie Mae. After I had graduated, I paid a couple of years, then in June 2003 I filed for chapter 13 bankruptcy. I was told by my attorney that my student loans were not dischargeable (that's fine) and they would go into automatic deferrment. (I think.. or forebearance, I don't recall.) The thing was that while I was in my chapter 13 payment plan I didn't have to pay on my student loans.

 

Well, now I don't know about that. When I filed, I may have been in forebearance (or deferment, the one where you didn't have to pay due to loss of job).

 

I pulled my credit report 3 days ago. This is what I found. Each of the CRA have 18 listings, which seem to be 9 pairs. I'll give examples.

 

Equifax

9 say $0 balance, Status "OK"

Then another 9 with a date to match the first 9, say $0 balance, status "bad debt / collection"

i.e.

I'll have one listed like this:

1/1997 balance: $0 status: ok

 

Then there is another listing for that same date/account:

1/1997 balance: $0 status: "bad debt collection"

 

Experian

I have 9 listed for Sallie Mae, balance $0, status "Account transferred to another office"

Then I have 9 listed with a different company name, "Student Loan Mkt. Assn", with balance $0, and status of "Account transferred to another office"

 

TransUnion

9 listed as "Sallie Mae" with balance $0, status of "Unrated or bankruptcy"

9 listed as "SM Servicing" with balance $0, status of "Ok."

 

Since I was told I would go into automatic deferment, and I literally had NO MONEY to pay them with since it was all going to pay on my chapter 13 bankrupty payments, I figured I didn't have to do anything and so for the last four years I didn't really think about them but dutifully made my chapter 13 payments. I knew, however, that I was going to have to start paying on them again when I was complete with my chapter 13. Which is fine. I borrowed that money, I should pay. Life was just tough not being able to find a job after the Internet bubble crashed. All this time I thought I was ok.

 

I pulled my credit report and I see those statuses from the different reporting agencies and now I am worried that I may have inadvertently defaulted. I did call Sallie Mae a couple of years ago, but the customer service rep didn't really talk much. She could see I was in bankruptcy and told me she couldn't say anything. So I hung up, still thinking I was ok.

 

Now.. I plan on paying off my Chapter 13 9 months early. I have requested a pay off and will be sending the final amount this week. So I pulled my credit report because I know I have a long road ahead of repairing my credit. I've learned so much reading this forum - been on it for a few weeks before joining.

 

I'm really scared now, and worried, if these statuses mean I have defaulted. I didn't mean to do that. I also am wondering if I should consolidate these loans. I don't know if I should do that, or renegotiate terms because I know that I have been accumulating interest this whole time and I owe much much more than 4 years ago.

 

Help. Did I default by accident and not realizing it? Can I still renegotiate payments once I get my discharge from my Chpt. 13? Would it be possible to consolidate them?

 

Thank you very much. I'm really worried - now that I am close to finishing my 13 all of this is a buz in my head I can't sleep sometimes.

[Saria]

Since I was told I would go into automatic deferment, and I literally had NO MONEY to pay them with since it was all going to pay on my chapter 13 bankrupty payments, I figured I didn't have to do anything and so for the last four years I didn't really think about them but dutifully made my chapter 13 payments. I knew, however, that I was going to have to start paying on them again when I was complete with my chapter 13. Which is fine. I borrowed that money, I should pay. Life was just tough not being able to find a job after the Internet bubble crashed. All this time I thought I was ok.

 

Based on the way they're reporting, and even more so on your statement above, I'm pretty much positive that you're now in default. Let this be a lesson to you and anyone who reads this that you can NEVER just forget about student loans and hope you don't default. I believe that there is a three year limit on unemployment deferments and you were also required to apply for a new deferment every year.

 

I know very little about BK, but I'm guessing that your BK is the only reason they haven't been hounding you for years. If they won't give you the information you need over the phone, I'd suggest logging into the NSLDS to check the current status of your loans.

 

If they are in default, you'll have to start exploring your options, such as rehab, to figure out what would be most beneficial in your circumstances. As I said, I'm not too familiar with how the BK factors into this, but I'm sure someone else will chime in to tell you how it might affect your plan of action.

[infitiator]

Based on the way they're reporting, and even more so on your statement above, I'm pretty much positive that you're now in default. Let this be a lesson to you and anyone who reads this that you can NEVER just forget about student loans and hope you don't default. I believe that there is a three year limit on unemployment deferments and you were also required to apply for a new deferment every year.

 

I know very little about BK, but I'm guessing that your BK is the only reason they haven't been hounding you for years. If they won't give you the information you need over the phone, I'd suggest logging into the NSLDS to check the current status of your loans.

 

If they are in default, you'll have to start exploring your options, such as rehab, to figure out what would be most beneficial in your circumstances. As I said, I'm not too familiar with how the BK factors into this, but I'm sure someone else will chime in to tell you how it might affect your plan of action.

 

*sigh* Ok, thank you for the response, Saria. I have applied for a PIN to access the NSLDS site. I should get that in a few days and go from there.

[somedaysomehow]

Infitiator - Wait til someone more knowledgeable comes along, but I'm fairly sure I read a thread the other day where someone else was in Ch. 13 and had student loans - they were put into some kind of "hold" status until the Ch. 13 was over. It's NOT a defaulting status. I'm not sure how they're supposed to report - as I said, wait for someone more knowledgeable on that. Let me see if I can find that thread.

 

Edit: Nevermind, you already found that thread. But it doesn't seem to me that you would be in "default" for those loans. That's just my unknowledgeable newbie opinion, though.

Edited October 1, 2007 by somedaysomehow

[infitiator]

Infitiator - Wait til someone more knowledgeable comes along, but I'm fairly sure I read a thread the other day where someone else was in Ch. 13 and had student loans - they were put into some kind of "hold" status until the Ch. 13 was over. It's NOT a defaulting status. I'm not sure how they're supposed to report - as I said, wait for someone more knowledgeable on that. Let me see if I can find that thread.

 

Edit: Nevermind, you already found that thread. But it doesn't seem to me that you would be in "default" for those loans. That's just my unknowledgeable newbie opinion, though.

 

LOL! I have been reading the boards for a while. Rather voraciously and obssessively, I might add. Especially concerning my students loans. I was a bit depressed earlier today thinking my "fresh start" would be a little musty.

 

At anyrate, I did apply for a pin at the NSLDS site so that I could check the status of my loans. I didn't know about that website, so I appreciate Saria telling me. I like knowing sites where I have access to information about me that they have.

 

Gonna reply to "bump" as well for more opinions on this. I'm taking things one step at a time right now while being anxious and eager to start working on repairing my credit. I'm especially anxious with paying off so early - like christmas eve anxious. hehe. This only gets me closer to starting to repair my financial life.

[Melanie P.]

Hello OP Infinator

 

I am/was in the same situation as you. Let's recap, as my situation is very similar to yours:

 

I started having financial problems in 2002 (job loss). I had my SL consolidated in 2003.

At the time, 2003, my SLs were in a hardship forbearance. I didn't have to pay, but interest was accumulating.

 

I finally filed BK13 in 2003 and when my SLs (Sallie Mae) were scheduled to come out of forbearance, I called and was told they were on 'hold status'/pending BK outcome/DC. I was told I could pay or not, didn't matter, wasn't a default, only interest would be accumulating. ]So, not having $$, I have not paid on these SLs since 2000. And have no 'default' status as I have maintained contact and turned in deferrment/forbearance/consolidation forms on time. Get copies of forms you have turned in. Get your BK forms together.

 

I have checked my CR each year while in BK13. At this time, most reported 'too new to rate' Curent, or paid/close/transfer. I have had no negative notations for these loans [except. 1 TL on EQ )] Also one or two report 'debt being paid by insurance', but alls in good standing....

 

Fast forward to 2007, my BK13 is D/C and now student loans are soon due. USA FUNDS, Sallie Mae's guranteeor, has now added 2 derogatory SL listings as IIB to my CRs. (I am in the process of getting these removed.) Previously, I tried disputing these TLs, but they come back verified. No dice. So, I decide to write letter to USAFUNDS and Sallie Mae. (S.M. on-line has contact info to regional staff.)

 

I also re-dispute since I now have on-line access to my Sallie Mae account and print out verification/history pages from Sallie Mae's website https://www.manageyourloans.com/MYL to send with letter to CRA's.

 

Finally, I get a response via telephone from the Advocate's office (CRA's still investigating). She looks at my TLs and says they are reporting things wrong. They do not, or so they say, have access to full CRs. So I fax copies of redacted credit reports (CRs) noting errors, requestibg changes, etc. and send 2nd set of info for her to forward to USA FUNDS (since they have same contact info as Sallie Mae).

 

So, now I get my coupon booklets ~9/10/07, but no letter of explanation. Then 2 weeks later Sallie Mae sends a letter outlining my SL and notice that they have repurchased my SLs. Whatever! They better not put duplicates on my reports!!!

 

So, I will make my first repayment tomarrow and student loans are showing @ Sallie Mae as never late, and in repayment status. That is the staus you want - REPAYMENT. But, you may not get that until BK is offically discharged. Find out now what is your current status.....

 

I will post new info as it comes.

 

You should not be in default if your SL were not in default prior to BK. Do not accept that. However watch for any negatives post-discharge. That is when my credit score tanked, when they added the consolidated IIBs TLs. I am wrking to get these off since student loans weren't actually IIB, but were to be paid outside of plan, non-dischargable, sent 'Notice Only' as documented in my BK13 filing.

 

So, here's what you need to do:

 

Find out your current status. Have them send you copies of previous forms.

 

Call the Advocate's Office @ 1-888-545-4199. Hopefully you're not indefault, but if so, work out a payment plan now.

 

Contact a supervior or regional head @ SM in writing to speed things along.

 

Have them (SM) delete duplicate TLs for the same loan. Have them update your CRs.

 

Get as much as you can fixed now so it will save you time later.

 

Good Luck!

Edited October 1, 2007 by Melanie P.

[infitiator]

Okay, I just checked the NSLDS site. My status was in "repayment" at the time of my filing chapter 13, and now it's current status is "bankruptcy claim / active."

 

Any one have any insight as to what that means?

 

Melanie: thank you so much for sharing your experience. You've given me hope that I may not be in default. My boyfriend has been really great at reassuring me too.

Edited October 2, 2007 by infitiator

[Melanie P.]

Okay, I just checked the NSLDS site. My status was in "repayment" at the time of my filing chapter 13, and now it's current status is "bankruptcy claim / active."

 

Any one have any insight as to what that means?

 

Melanie: thank you so much for sharing your experience. You've given me hope that I may not be in default. My boyfriend has been really great at reassuring me too.

 

 

Good News! That more than likely means you have NOT defaulted.

 

My SL were in the same status prior to DC. They will not touch any TL until DC. The BK 'auto stay injunction bars them from contacting you and billing you until DC.

 

Check the Sallie Mae site and find out your current status with Sallie Mae. I did and got a letter stating that I was NOT in default.

 

Your TLs may look like a default on CRs since I had a few state 'debt being paid via insurance'. But they remained on the positive side of the CR. You probably can't make too many changes now, pre-dc, and even if you did, they will only go back and add/change stuff post-DC ayway. Try to celan up as many TLs as you can now, and get the contact info and debt balance from Sallie Mae now.

 

I got my payment coupons ~60-75 days after I notifed them of my DC. It takles a while for them to re-process your loans, etc. Get have your payment ready within 2 months of DC and WRITE LETTERS.

 

Good Luck!

 

Edited October 2, 2007 by Melanie P.

[Saria]

I'm so glad that someone with more knowledge of BK chimed in to help you and that it looks like you're in good shape! Sorry I jumped to conclusions and I hope my ignorance didn't freak you out too much

[infitiator]

Awesome, Melanie! I can't log into the Sallie Mae website, I tried. But, I will certainly be giving them a call.

[infitiator]

I'm so glad that someone with more knowledge of BK chimed in to help you and that it looks like you're in good shape! Sorry I jumped to conclusions and I hope my ignorance didn't freak you out too much

 

 

Saria! You did not freak me out. I get fReAkEd out all on my own. All of this information is here for us to learn. I'm still worried, that's just my nature. I have something to start with, though.