Navient Charge Off

[maddox80]

Lovely Navient is posting 4, yes 4 charge-offs on my credit report.  I'm starting with Equifax.

 

Round 1:  Disputed because there was still a past due balance showing on the charged off accounts (all of them).  One Navient Account deleted, the rest were "verified."  Equifax "updated" the "date of last payment" to literally June 2020 ... on charged off accounts.   They still show a past due balance, even though the debts were sold to a collection agency. 

Round 2:  Sent a method of verification letter to Equifax.  Equifax responded with a "We don't have a credit file for you" letter.  Stall tactic?

Round 3:  Sent a second method of verification request with copies of the "we don't have a credit file for you" letter, proof of identity, copies of their previously "verified" accounts/"investigation results" pointing out they reported payments on charged off accounts.  Interestingly, the "little boxes" that appear under the accounts which tell you if it's a timely payment, late, or a charge off still show a "late/charge off" for the months Equifax says they verified I made payments.  Result:  Investigation is PENDING.

 

I signed up for MyFico and apparently, Navient is reporting these charge offs/lates, FRESH, on a monthly basis - even after they sold the debt.  Is this legal?  How can I be late on a debt that doesn't exist anymore since they sold it off? I had a charge off before for a credit card a long time ago and once it was charged off and sold (Navient sold the debt as well) it wasn't reported every.dang.month.  Is this legal or some sort of reporting violation?

 

Am I doing this correctly?  Should I do a 609 and demand that they show me a copy of my MPN?  TIA!!!

 

 

[MarvBear]

Section 609 is not the way to go.

 

Please refer to this if you follow your intended course.

https://www.consumer.ftc.gov/articles/pdf-0091-fair-credit-reporting-act-611.pdf

[Pam]

So this is student loan debt?

[hdporter]

@maddox80:  I'll own up that my familiarity with student loan collections (a safe presumption since we're talking Navient delinquencies) is weak these days.  Still, I'll offer up the following for consideration:

 

Each loan extension while a student constitutes a unique debt, even if through a common issuer.  Thus it's standard practice (in fact, required) that while multiple loans through a single issuer might be set up under a master account, with a single monthly payment, the status of each individual loan is reported separately to the CRA's.

 

Concerning the sale of the debts to a collection agency:  Are you confident that these accounts have actually been sold, rather than just farmed out for collection by the agency (with proceeds being returned to Navient, after the CA takes a cut)?  What added reporting have you seen from the CA on your credit report?

 

As far as "charge off" reporting, if Navient continues to own the debts, then the continued monthly "charge off" notation is a convention that is used by some creditors so long as there's a balance outstanding after the charge-off event.  (I question the appropriateness of this type of reporting, but it's been reported anecdotally by others sufficiently often that I no longer assert that it's improper.)

 

I'll close with one key observation:  While I understand your concern with the impact of the adverse reporting, I strongly suggest that your attentions should be mostly focused on getting this debt out of default.  There's no way to avoid a continued deleterious impact on your credit prospects so long as that default isn't resolved.

 

Depending upon the nature of the student loan debt (whether it's government guaranteed or a private loan debt, e.g.) you may have some particularly attractive options by which to cure the default.  These may include options to refinance the debt and/or "rehabilitate" the debt.  You need to do some research and you may wish to open a discussion thread in the Student Loans forum here on CB.

[CreditCurious20]

The Dodd-Frank reform law gave the Consumer Financial Protection Bureau the authority to pass administrative regulations under the Fair Credit Reporting Act. They did so with the enactment of Regulation V. Regulation V, Appendix E, I(b)(4) says that furnishers of information to CRAs should "update the information...as necessary to reflect the current status of the consumers account."  This includes the "transfer of an account... by sale or assignment for collection to a third party." Id. at I(b)(4)(i).  Is the trade-line from Navient accurate? Maybe; however, it is definitely not complete and does the not represent the "current status" or legal character of the debt in violation of Regulation V of the FCRA since the debt has been sold/assigned to someone else. The trade line should reflect a $0 balance to Navient and may make reference to the charge-off, closed, transferred/sold. The assignee may start a new trade line on your report, however. 

 

https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1022/E/#b-1-i

 

I would send a dispute with Navient and the CRAs outlining this argument (but I also wouldn't admit the charge-off to the CRA if avoidable in case you want to try to remove it early later). I would also file a complaint with the CFPB.

Also check to see what the requirements are for rehabilitating a student loan? This can result in cleaning up trade lines if you're eligible, but I'm not sure at what point this ability ceases. 

Edited September 7, 2020 by CreditCurious20

[centex]

What did you get that leads to believe the paper was sold?  Many student loans are never actually sold off but continue to be held by the entity that underwrote the loan(s).

 

Boxes suggest you are not looking at paper reports from the four major bureaus. 

 

A charge-off retains its charge-off status even if some manner of payment is made except and unless there was a basis upon which the account was reinstated to an active status (a rare event but can happen).  Further, a lender can continue to report their experiences with you into perpetuity.  They just won't be viewable beyond seven years and six months from the event that gave rise to the charge-off.

 

Generally, the best way to clear delinquency from student loans is to rehabilitate them...hopefully you have not burned that bridge.  You then lose the derogatory notations after something like six or nine months of payment.  Refinance to a lower rate at that juncture...

[Smdobbs87]

On 9/7/2020 at 1:02 AM, CreditCurious20 said:

The Dodd-Frank reform law gave the Consumer Financial Protection Bureau the authority to pass administrative regulations under the Fair Credit Reporting Act. They did so with the enactment of Regulation V. Regulation V, Appendix E, I(b)(4) says that furnishers of information to CRAs should "update the information...as necessary to reflect the current status of the consumers account."  This includes the "transfer of an account... by sale or assignment for collection to a third party." Id. at I(b)(4)(i).  Is the trade-line from Navient accurate? Maybe; however, it is definitely not complete and does the not represent the "current status" or legal character of the debt in violation of Regulation V of the FCRA since the debt has been sold/assigned to someone else. The trade line should reflect a $0 balance to Navient and may make reference to the charge-off, closed, transferred/sold. The assignee may start a new trade line on your report, however. 

 

https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1022/E/#b-1-i

 

I would send a dispute with Navient and the CRAs outlining this argument (but I also wouldn't admit the charge-off to the CRA if avoidable in case you want to try to remove it early later). I would also file a complaint with the CFPB.

Also check to see what the requirements are for rehabilitating a student loan? This can result in cleaning up trade lines if you're eligible, but I'm not sure at what point this ability ceases. 

I was also going to advise a complaint to CFPB, glad someone beat me to it