Dang student loans

[coolcreditchick]

My DH has old defaulted SL from Mar of 97 and they are about 20K. He has never paid on them or had any garnishment. I believe they have all gone to collections or been charged off....We want to get a house and not sure what to do to deal with these. Is the SOL for the TL up? Can he have them drop off for being past 7 yrs? I saw a law on here for bankruptcy that said SL before 1998 were dischargable....does that help us for disputing? I would appreciate any guidance...

[LynnInMN]

My DH has old defaulted SL from Mar of 97 and they are about 20K. He has never paid on them or had any garnishment. I believe they have all gone to collections or been charged off....We want to get a house and not sure what to do to deal with these. Is the SOL for the TL up? Can he have them drop off for being past 7 yrs? I saw a law on here for bankruptcy that said SL before 1998 were dischargable....does that help us for disputing? I would appreciate any guidance...

Student loans never charge off..they keep collecting. He may have defaulted in 97 but he will have additional tradelines with the the guarantey agency and possibly the collection agency. Also, you cannot quality for an FHA/VA mortgage with defaults. There is a question on the app's about defaulting to government lenders.

Bankruptcy...you could file BK on student loan prior to 98 if it ws 7 years from the time it came due. It would not be a dispute.

It may be dormant right now, sitting in some collection agency que. But have no fear, as soon as an agency starts seeing mortgage inquiries, they will be hot on his tail. When I was collecting, a mortgage pull to us meant payday. Or garnishment. And mortgages dont like government garnishments. Get him into repayment and then rehab or consolidate before attempting to purchase that home.

[coolcreditchick]

Thanks for the quick reply-

I am confused as to where to begin.....Do I contact the original lender(USAFUNDS) and ask to make payments? Or do I call the last collection agency? I am willing to work these payments out but do not want to deal with a unscrupulous collector who is unwilling to be fair on payments.

Is bankruptcy a better route for this since they are before the cutoff? His scores according to the lender are 513=473=466 and the SL is the majority of the problem. If we got him into a payment plan , how long before it reported as being piad on time and the TL looks better?

[LynnInMN]

Thanks for the quick reply-

I am confused as to where to begin.....Do I contact the original lender(USAFUNDS) and ask to make payments? Or do I call the last collection agency? I am willing to work these payments out but do not want to deal with a unscrupulous collector who is unwilling to be fair on payments.

Is bankruptcy a better route for this since they are before the cutoff? His scores according to the lender are 513=473=466 and the SL is the majority of the problem. If we got him into a payment plan , how long before it reported as being piad on time and the TL looks better?

Bankruptcy is no long permitted, regardless of when the loans were taken out. You might have been able to file prior to 98 if you had met certain conditions, but since 9-98, they are no longer permitted, unless they are deemed a hardship. Since you are looking a purchasing a home, I doubt hardship would apply.

Student loans in default are not reported as paid on time. You could rehab the loans ...that takes been 12-14 months . After the rehab is completed, the negative information is removed. Or you could consolidate which takes 1-3 months. That would not remove the negative trade lines but the account would show as paid, with a new consolidated current loan. Since you loans have probably changed hands several times, call 1-800-4fed-aid. They should be able to tell you who is handling your loan. You are probably assigned to a collection agency somewhere. Generally the current loan holder will not make arrangements with you and will forward you to the correct agency.