Follow Up to PFD Letter issue?

Question

The saga continues (for those who remember my previous question). Thanks to recommendations here, I sent collection agency a modified PFD letter, changing it to say they would not "report" to credit agencies (since this old student loan debt doesn't currently appear on my report). Well, the guy didn't sign the agreement I sent him. However, he wrote me back, with a letter saying "NCM does not report to any credit reporting agencies for University of x*x". It also said that payment will settle the account and there will be no more collection attempts.

So should I just accept this as agreement that it won't be reported? I would love to just pay this and get it off my plate, but I sure don't want this debt appearing on my credit report. I'd like to pay this today. I just want to make sure I'm doing the right thing to protect myself.

To those new to this issue, I definitely owe the debt, although I didn't know it existed until recently.

Thanks in advance!

Answer 1

I don't know the previous discussion but you can always dispute reporting information.  It's a long process but can be done through writing to the credit agencies.  Regardless, keep the letter that you have paid.  **Keep it FOREVER** The only way to verify if they are reporting the collection is to watch your credit - that letter says they shouldn't be not that they didn't.  Things can always be removed from your report.  Misreporting happens all the time...  Acutally, that letter is pretty accurate, the collection wouldn't technically be with Univ. x*x, but with NCM, the collection agency....  But that's probably not what they meant.

Answer 2

You have heard of the old saying "beware of Wolfe's in sheep's clothing".  well this is one of those cases.

If you are going to pay a settlement amount (less then the actual debt), then you leave yourself open for possible legal action in court.  They could come after you later on for the balance of the loan because The statute of limitations on defaulted student loans was eliminated by the Higher Education Act. Section 484A removes all limitations and gives the Department of Education or the guaranty agency (bank or lender) the ability to file suit, enforce judgments, initiate offsets, or other actions, to collect a defaulted student loan regardless of the age of the debt. Statutes of limitation are no longer valid defenses against repayment of a student loan.

Any partial payment leaves you open to the claim that you acknowledge the debt and are therefore liable.

This is why they don't want to do a PFD.  Your best bet is to get a written agreement that what ever you pay them, it will settle the debt as "Paid in full" and no further legal action will take place.

As to it being on your credit report, the rules still apply, it can only be on your report for 7 1/2 years regardless. As of December 29, 1997 the reporting period runs 7 ½ years (7 years plus 180 days) from the date (month and year) of the last delinquency (known as "last missed payment:).

So, regardless of how long a creditor waits to charge off, sell or transfer a debt, they must report the true and correct "delinquent or last missed payment" date (month and year) that preceded the creditor's action.

Hope this answers your question

LEGAL DISCLAIMER:  The advice contained herein is for informational purposes only.  It is not to be construed as Legal Counsel nor Legal Advice.

EDIT:  If you are paying the full amount, then yes, it will not appear on your credit report as a derogatory entry because it has been setteled.  It may however still appear under accounts in good standing.  My wife has a student loan paid off in 1991 still showing on her credit report, but it's a good thing.