Question:
Dear Steve,
Divorce, mortgage crash, bankruptcy, then lost house to foreclosure 2 years ago which left me holding the bag for student loan debt to the tune of $216,000 – trying to resolve for years to no avail. called Navient – they gave me the number of National Enterprise Systems who said they were collecting for Navient – the guy said he would $71,000 if we paid today – then quickly went down to $50,000 –
Does this sound legit and if the loans are charged off what percentage of this debt do you think they might accept? Also, do places like this send you a release letter with our loan information prior to paying.
Steve, I am 58, unemployed, and have 20,000 in a 401k to my name, however I would do anything to absolve my young, newly married daughter from this debt. I have been following you for a while now. Help.
Thank You
Gigi
Answer:
Dear Gigi,
It sounds as if you have private student loan debt that Navient is servicing. They will settle but every situation is a little different. A great settlement for one person may not be available to the next because of the situation leading up to it and the path followed. Settlement agreements generally conform to a pattern but that pattern changes with corporate policy, times of the year, legal representation, etc.
The bigger underlying issue here is it doesn’t really matter what deal they offer you if you have no income coming in and only $20,000 in retirement funds. It would be a mistake to drain what little money you have saved for retirement. Keep in mind that an early 401(k) withdrawal can be a taxable event.
You also mentioned you would do anything to remove your daughter from the debt so it sounds as if this might be loans you cosigned for. In that case, unless you do it right, they will settle your part of the responsibility and leave your daughter on the hook. But again it’s a moot point if you don’t have access to funds to settle.
If this is a cosigned loan and your daughter is on the loans as well then you might want to consider maybe going for a settlement with a monthly payment plan and letting her make the $250 monthly payment. Navient will accept $250 a month in some settlement offers at 0.01% interest.
Here is what I wrote previously on settling Navient student loans.
The biggest settlement offers I’ve seen are ones as the result of lawsuits. Read this article to see them.
If you do decide to pursue the settlement route you would absolutely want to get the offer in writing so you will always have proof that the reduced payments will satisfy the loan. Otherwise it is not unheard of for a creditor to resurface years later and say there was no such agreement. Keep the settlement letter with your other important papers you never lose.
