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Fritz
Fritz, Attorney
Category: Bankruptcy Law
Satisfied Customers: 302
Experience:  Florida attorney with extensive experience in Chapter 7 and Chapter 13 consumer bankruptcy cases
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I settled my defaulted student loan last year. Am getting caught

Customer Question

I settled my defaulted student loan last year. Am getting caught up, and want to settle some other debts and repair my credit.

I have a credit card judgement for abt 10,000. I have a judgement against me for that amount. Originally I had negotiated a settlement, but then found out my job was ending, so I ended up not settling it because of not having the available money.

My question is if I settle this will it improve my credit? Or would it be necessary to pay it off in entirety? If so, would that help clear my credit?

I also have another private loan in good standing that I could pay off for the same amount.

Although I have been working steadily past two yrs, I worry about what if I get unemployed again. I don't want to pay every dime for these loans and be left with nothing to live on, like before.

I am more worried about the student loans (3, totalling over 70000) that cannot be discharged.

I need to move forward, and am not sure what to pay, but the judgement is definitely holding me back.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Fritz replied 1 year ago.

Fritz :

Hi, I'd like to assist you with your questions today.

Customer :

ok, was my question clear?

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Hello?

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I have to sign off now for a meeting

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I got no answer

Expert:  Fritz replied 1 year ago.

1) "My question is if I settle this will it improve my credit? Or would it be necessary to pay it off in entirety? If so, would that help clear my credit?"

 

Settling an outstanding judgment should improve your credit, although it will be reported to the credit bureaus as a "debt settlement," which isn't quite as good for your credit as satisfying the judgment by paying the full amount of the judgment. On balance, most people would be better off settling the debt instead of paying the judgment in full. Even if you fully satisfy the judgment, it can still be reported to the credit bureaus for up to seven years after the judgment was entered, so there's no way to truly "clear" your credit report.

 

2) "I am more worried about the student loans (3, totaling over 70000) that cannot be discharged."

 

Generally speaking, unless the credit card company is taking active steps to collect the judgment debt (i.e. attempting to garnish wages, levy bank accounts, etc.), the student loan debt (especially if you're behind on payments or in default on any loans) should be a priority since it is non-dischargeable in bankruptcy. Many attorneys would advise you to deal with the judgment first, but I would personally wait and deal with any delinquent or defaulted student loans first unless you have, for instance, $10,000 sitting in a bank account that could be easily levied by a judgment creditor.

Expert:  Fritz replied 1 year ago.
Please let me know if you have any additional questions. Thanks!
Fritz, Attorney
Category: Bankruptcy Law
Satisfied Customers: 302
Experience: Florida attorney with extensive experience in Chapter 7 and Chapter 13 consumer bankruptcy cases
Fritz and 2 other Bankruptcy Law Specialists are ready to help you
Customer: replied 1 year ago.

Thank you, XXXXX XXXXX exactly what I was hoping to learn.

Customer: replied 1 year ago.
I have read that sometimes if paying in full the charge off could be expunged from you record, is that true?
Expert:  Fritz replied 1 year ago.

The student loan delinquency or default could still be reported to the credit bureaus for up to seven years after the loan has been paid in full. However, the student lender might agree to voluntarily remove the delinquency or default from your credit report. You would want to specifically request a statement in writing that the lender will remove the delinquency or default from your credit reports once you pay in full, as they're not required to do so under federal law. Should the student lender subsequently fail to follow through with their promise, having something in writing might help you dispute the derogatory notation directly with the credit bureaus.

 

 

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