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Asset Recovery Solutions Won’t Give Me a Navient Debt Settlement Agreement

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Question:

Dear Steve,

I currently have student loans in default with Navient. I received statements today in the mail from Asset Recovery Solutions offering settlement amounts for the Navient debt. I contacted whom I thought was Navient from their website at (888) 272-5543 but during the conversation I found that I was actually speaking to someone from Asset Recovery Solutions. She stated that Navient was their client. I asked for the Navient phone number and she gave me (877) 721-9336. I did a reverse search and found that the number she provided is also listed to Asset Recovery Solutions.

I would like to pay the settlement offer but not sure what I need to ask for to ensure they actually close/settle my account? The lady from Asset Recovery Solutions stated that they take the payment and notify Navient the accounts have been paid in full and I will then receive a letter 30 days later stating I have settled the accounts. Is that normal?

I also asked her that when I paid the debt if it would then be reported to my credit report, she stated they don’t handle that, Navient does but I don’t appear to have a direct way to contact Navient. The student loans have just come off of my credit reports and I was wondering if by settling they’d “re-appear” regardless?

Any information would be appreciated.

Also, I have someone paying from a bank account other than mine (I have read to never give them your bank information in fear they will seize it). The Asset Recovery lady said he has to be on the phone to make the transaction. If he agrees to make the initial “settlement” payment are they allowed to then try to take more money or seize his account down the road? (my name is not on his account)

April

Answer:

Dear April,

Thank you for reaching out to me.

Well this is one of those processes where if you make the wrong choices then it can be costly. I’m absolutely not trying to scare you with that statement.

The issue is what might be a trick or common practice between the collector, Navient, and the consumer. I have certainly seen people make a payment only later to be told there is no such deal. But those situations are not common.

In a perfect world you would receive a settlement letter prior to the money being paid. Otherwise you are coasting on faith.

While this is not specifically about this situation, this post by Charles Phelan provides some good insight into dealing with how to settle.

On the credit report issue, if the debt in question is more than seven years and 180 days old in it’s current delinquent status, it would fall off your credit report. A payment should not relist it but even if it did it would show a very old debt that had been satisfied.

According to Experian, “Paying off a debt in collections does not impact the time it remains on your credit report. Paid or unpaid, the collection will remain on the report for seven years and 180 days (except for in the state of New York, where paid collections remain on your account for five years from the date paid).”

You should be engaged in having current credit reported about you and your payment history on your major credit cards is much more important and more heavily weighted.

The request for account information is common but to provide maximum protection in this transaction it might make sense to have that person open an account at their bank just for this purpose, deposit the funds into it, and then close the account when the transaction is completed. That gives everyone what they want.

But frankly, since this is such an important transaction and there is some unknown issues here, while there is no obligation for you to do so, I would suggest you schedule a consultation with Damon Day who is very experienced in these situations, to discuss your specific offer. He could give you some specific advice.

One last issue to keep in mind is if you are not insolvent, you may owe income tax on the forgiven debt. As an example, see this article.


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