CreditBoards > Rehabilitate or Consolidate?

Full Version: Rehabilitate or Consolidate?

CreditBoards > Financing > Student Loans

anewstar

Nov 13 2006, 06:49 PM

Hello everyone, I just need some quick advice (as usual)

As you know I'm 2 months post discharge ch 7 and somehow I have defaulted student loans on my credit report. I've been in contact with the OC and they informed me that they could not do anything for me since they no longer have my account. So I called the CA. They informed me of a rehabilitation program in which after 12 months of timely payments, they will remove the defaulted account completely, then I can consolidate with Direct Loans. On the other hand, if I just consolidate with DL now, the defaulted student loans will show a status of paid and I will not have to make a payment until my loans come out of deferment. What should I do? Should I rehabilitate and have the defaulted student loans wiped off completely or should I just consolidate and have a status of paid? BTW, I'm waiting for the terms and conditions in writing!!! I want to make sure if they said wiped clean I have proof!

Thanks for all the help.

LynnInMN

Nov 13 2006, 08:13 PM

QUOTE(anewstar @ Nov 13 2006, 05:49 PM)

Hello everyone, I just need some quick advice (as usual)

As you know I'm 2 months post discharge ch 7 and somehow I have defaulted student loans on my credit report. I've been in contact with the OC and they informed me that they could not do anything for me since they no longer have my account. So I called the CA.
CA or guarantor?? Who did you call??
They informed me of a rehabilitation program in which after 12 months of timely payments,
Is this a Perkins loan?? Only Perkins loans require 12 pays.
they will remove the defaulted account completely, then I can consolidate with Direct Loans. On the other hand, if I just consolidate with DL now, the defaulted student loans will show a status of paid and I will not have to make a payment until my loans come out of deferment. What should I do? Should I rehabilitate and have the defaulted student loans wiped off completely (depends on the type of loan_or should I just consolidate and have a status of paid?

It will be marked Paid Collection.

BTW, I'm waiting for the terms and conditions in writing!!! I want to make sure if they said wiped clean I have proof!

You do not have to wait for proof. If you had read this forum, you would have found that they are refering to the HEA or Higher Education Act. Rehab is outlined there.

Thanks for all the help.

anewstar

Nov 13 2006, 08:56 PM

I called the collection agency. They explained the rehab program (9 month program). I would like to know what would be better? I would have to pay $100 a month for 9 months for the rehab prog. I can't afford much more now. I'm getting ready to go back to school one more time. No loans though. What would look better on my credit report?

KYBOSH

Nov 20 2006, 04:56 PM

From what I gather (Im new to this forum) it may be better for you to rehab first then consolidate.
When you rehab your defaulted tradelines are removed once you complete the 9 months. After that if you find a consolidator that has a lower interest rate and/or better monthl payments you can then move all the rehab SL to them. Hope Im not misleading you. Can the experts verify that this is sound advice?

Thanks

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