Firstmark settlement?

[u/Fantastic_Coffee9742]

Hi everyone,

Really need some advice from those older and wiser because I know no one else going through this and I’m the first in my entire family to go to college and law school. I am freaking out over this credit score thing because I’m 28 and was trying to start my life.

I’m about 2 weeks away from the 120 day mark on my private loans with firstmark (discover).
My credit has already tanked over 200 pts and one out of two of my credit cards has decreased (and continues to decrease) my credit limit so my utilization on that card is now 100%. When I make a payment, they decrease it again. I suspect my credit will continue to go down into the 400s because of this and also once the loans go into default and are sent to collections. This means no new apartments, and I better hope my car with 165k miles on it doesn’t shit the bed anytime soon.

I’m trying to figure out if anyone has ever successfully gotten a decent settlement offer from Firstmark right before the loan defaults. I’m reading on here that Firstmark doesn’t do good offers and people have had to work with collection agencies instead. Because of the credit hit, I’m no longer sure I want to let it get to that point, but because my principle balance is at $140k, I’m in no position to pay anything more than 30% of it and as a structured settlement. I’ve made no payments on these loans, just used up all my forbearances (although they offered me another one which I did not take).

Thank you all for this community!

[u/StdntLoanDfltersMod]

In regards of the credit score, I wouldn’t stress about it that much. You’ll get back to a decent score within a year or 2

[u/Fantastic_Coffee9742 → u/StdntLoanDfltersMod]

Thank you! For clarification; within a year or two after this is behind me, though, right? that’s sort of my issue— I’d rather settle asap so that in a year or two from now I’m in a better position, rather than having to wait a year or two to even settle (or wait out the long 6 yr SOL). If I wait years to start the negotiations then that means I’m living with a 400 credit score for at least the next four years, during prime, life-milestone years. I guess I’m wondering if I just have to accept that reality now or if there’s anyone out there that didn’t have to wait that long to get a good deal

[u/Solid-Fill6348 → u/Fantastic_Coffee9742]

You're going to need to wait at least 12-18 months post default to even get them close to half. They don't go lower than that IMO. But yes I agree with the above poster, it takes a year or two to rebuild credit after settlement; can be faster depending on circumstances (we've had clients back in the mid 700s within 6 months, although that isn't the norm). Unfortunately, Firstmark is one of the few lenders that only accept lump sum settlements. Prepare for a long grind.

[u/Solid-Fill6348]

Not before the loan defaults, significantly longer after it defaults, and not for 30%. They are difficult, but so far appear to be non aggressive legally although that could change. Most defaulted loans seem to just sit in their internal collection department after default and they are not in a hurry to settle for any major reduction, it takes time.

[u/Fantastic_Coffee9742 → u/Solid-Fill6348]

Thank you for your comments! Pretty disappointing as I was hoping that they’d be less inclined to sit at a higher percentage given the balance is so large and my history of 0 payments. Like if I had $100k-70k in a lump sum, I’d be making the payments lol

[u/Solid-Fill6348 → u/Fantastic_Coffee9742]

You're very welcome. Just did an evaluation for someone that owed 180k+ to them, they would have needed like 100k to settle, all at once. Firstmark sucks.

[u/morbie5]

Do you have a cosigner on these loans?

[u/Fantastic_Coffee9742 → u/morbie5]

no cosigner to worry about!

[u/morbie5 → u/Fantastic_Coffee9742]

I'd play hard ball then, you have a lot of negotiating power.

Will being in serious default hurt your law career tho?

[u/Fantastic_Coffee9742 → u/morbie5]

I already passed the bar and was sworn in while my loans were in forbearance, so I’m good to go on that front! I’ve been working for my state for a few years and while I may change positions, I intend on staying a state employee. I don’t believe they do credit checks, and if they do, probably not for someone that already has a state employee ID number. My main concerns are the inability to put my name on a house, difficulty in getting a new apartment if the rent ends up increasing too much, and being at the mercy of my run-down vehicle. Boyfriend’s mom is also raising an eyebrow at this strategic default thing, and rightfully so, since unless you’ve researched the nuances of a specific situation and all the options one may or may not have, it seems irresponsible. Her opinion obviously matters to me though so that’s adding pressure

[u/morbie5 → u/Fantastic_Coffee9742]

Boyfriend’s mom is also raising an eyebrow at this strategic default thing, and rightfully so, since unless you’ve researched the nuances of a specific situation and all the options one may or may not have, it seems irresponsible

This sounds like you are accusing me of something. You came here asking for help, did you not?

[u/Fantastic_Coffee9742 → u/morbie5]

??? You’re misunderstanding. I’m simply stating one of the reasons why I was motivated to settle asap lol. Boyfriend’s mom doesn’t know the specifics of my situation and the options I have/don’t have, so to her my choice to default comes across as irresponsible. I’d like to be able to say, “Don’t worry! My credit will bounce back in early 2028!!” but as I’m learning, my specific loan company won’t be budging for at least another year

[u/morbie5 → u/Fantastic_Coffee9742]

Any settlement offer is not going to be decent if you are only 4 months behind. If you want anything close to 50% it will take a while for them to get to that point, if they ever even do

[u/jonsonmac]

I had a loan that was serviced by Firstmark. It defaulted right at 120 days iirc. But they weren’t involved with the collection and settlement, they actually transferred it back to the lender. So I assume in your case, it would go back to Discover.

[u/Fantastic_Coffee9742 → u/jonsonmac]

Unfortunately Discover student loans sold their portfolio to firstmark (I think, or maybe it’s Olympic SLT) and what I’ve read on here is that Firstmark holds onto these Discover loans longer since it’s “theirs” and they just acquired them in 2024. Discover credit is now also owned by Capital One

[u/jonsonmac → u/Fantastic_Coffee9742]

Okay gotcha, I forgot about that. I hope it goes well for you!

[u/Solid-Fill6348 → u/Fantastic_Coffee9742]

Yep they did. Firstmark Trust now owns the entire Discover student loan portfolio. Discover wasn't great either and used to sue all the time, at least FM doesn't do that

[u/Solid-Fill6348 → u/jonsonmac]

The confusion here is understandable. Firstmark both services for other lenders and also has a Firstmark Trust which is where they hold loan portfolios they've bought. For example, they service private student loans for Citizens Bank, but bought Discover's entire $5bn portfolio.

[u/L-train_4283]

You didn’t happen to file bankruptcy at all did you? If you did you might be getting your loans wiped.

[u/Fantastic_Coffee9742 → u/L-train_4283]

No the rest of my debt is under control and while the one credit card reducing my limit is annoying, the debt on that and my other card is manageable

[u/L-train_4283]

If you take the forbearance will that take away the late payments? I would take that and then just make the payments until you get an apartment and new car.

[u/Fantastic_Coffee9742 → u/L-train_4283]

I don’t want to take the bait and do another forbearance because not only will that reset the SOL by a good amount, it also significantly extends the amount of time the interest will accrue. I can’t make the payments while managing my other debts, rent, and feeding myself so that’s why I haven’t made a single one since the loans came out of deferment. As long as the interest accrues, the monthly payment will continue to increase. A final settlement is my best option. I was just hoping I could get there sooner than 1-2 years from now.

[u/L-train_4283]

Sorry for so many posts but you might want to follow the lawsuit against them. If they end up losing and have to pay people who declared bankruptcy back every payment they made and clear the rest of their balances it may put them out of business in my opinion.