Does Sallie Mae settle for less than full amount?

[nc73]

Anyone know for sure? I've heard of some getting an offer for a lot less than the full amount. I haven't paid them in over 2 years and it didn't even show as defaulted. It only said delinquent before going into BK.

[KeithDoxen]

There are rumors that a lot of student loan companies will settle after bankruptcy. Is this a private loan or a federal loan? If it's a federal loan, they have so many ways to get your money that they're not likely to settle. If this is a private loan then I would say they probably would be willing to hear you out on a settlement offer given that it's been two years and they haven't been able to get any money out of you.

Are they calling you at all? Have they sued? If they are ignoring you, it might just be best to wait out the SOL.

[biotechsolution]

Sallie Mae has no reason to settle, like the above poster stated, they can always get your money.

[nc73]

Private loan. They don't have my contact info so I don't hear from them. I was also out of the country for 2 years so that helped. In any case I've never ever heard from them. I get transferred to the bk line when I call but all I get is voice mail. Trying to get a settlement if possible.

[KeithDoxen]

Private loan. They don't have my contact info so I don't hear from them. I was also out of the country for 2 years so that helped. In any case I've never ever heard from them. I get transferred to the bk line when I call but all I get is voice mail. Trying to get a settlement if possible.

I think you should try. A lot of people who aren't familiar with the logistics of student loans assume that all student loans are governed by the same rules as federal loans. Private student loans are really a lot like other types of unsecured debt, except that you can't discharge them in bankruptcy. And I keep hearing the same story from bankrupt individuals: that the private student lenders just roll over and make a half-hearted attempt at collecting if you've filed for bankruptcy and been successfully discharged. So I would try to settle. And keep us posted!

[nc73]

Well I got on the line with SM and they said once the bankruptcy paperwork gets to them it will be sent to another CA. I did ask them if they were going to offer a settlement and they said most likely. Although I've only heard that it will be around 80%. Gonna call them back in a week's time.

[backtoschool]

It is not true that Sallie Mae settles. Private student loans are not dischargable so there is no reason to settle. In fact, the CA can add collection costs to the loan and the loan will go up not down. Once in awhile they might take off some of the collection costs and accrued interest and that is where the 80% figure comes from, but the balance will not be reduced.

[nc73]

It is not true that Sallie Mae settles. Private student loans are not dischargable so there is no reason to settle. In fact, the CA can add collection costs to the loan and the loan will go up not down. Once in awhile they might take off some of the collection costs and accrued interest and that is where the 80% figure comes from, but the balance will not be reduced.

Even just the original loan amount will do just fine. I forgot to ask if I was in default or not since it has been 2 years. I figure I would be.

[KeithDoxen]

It is not true that Sallie Mae settles. Private student loans are not dischargable so there is no reason to settle. In fact, the CA can add collection costs to the loan and the loan will go up not down. Once in awhile they might take off some of the collection costs and accrued interest and that is where the 80% figure comes from, but the balance will not be reduced.

I've heard otherwise. I think it was on this site where someone recently said that Citibank made a settlement offer on some private student loans. Just because a debt is non-dischargeable doesn't mean there's no reason to settle. There are lots of reasons that creditors entertain settlements other than bankruptcy. A bankrupt individual who has little to no income and no assets other than the protected basics is not going to be a particularly profitable target for a lawsuit. And even if they do agree to pay back the loan by making a low monthly payment, the creditor may decide that it's better to have a bird in the hand instead of two in the bush and settle for a lump sum rather than collect the entire amount over years and years.

NC, please let us know how this turns out. I am a member of various debt-related boards and student loans always cause big debates. I'm not sure why. You don't see those debates about other types of debt. It will be instructive to all of us to learn what sort of deal you and Sallie Mae are able to work out.

[nc73]

I have read some forums where the person gets a settlement but sallie mae denies it or attempts to collect the remaining balance. Sounds like a nightmare. I could probably get the money together and pay the f**kers off so I don't have to deal with them even if it's not on reasonable terms. They haven't sued me so far so doubt they will any time soon.

[backtoschool]

Even just the original loan amount will do just fine. I forgot to ask if I was in default or not since it has been 2 years. I figure I would be.

I think it is possible to get some of the interest and collection charges removed. If it has been two years, you are in default and there will be large collection fees that will have been added to the balance. I believe that it is possible that you would be able to get rid of some, if not all, of those collection fees if you settle.

[keepinitreal]

There was an article a couple of months ago that stated "federal student debt collectors are permitted, but not required, to accept settlements as low as 90 percent of the debt". Not sure if it is relevant to your situation, but check it out.