Rocket Loans acts as a technology driven lending platform similar to others that focus on personal loans. Their loan amounts can vary depending on your need, credit scores, and ability to repay. The amount of money they approve you for can range from just a few thousand up to around fifty thousand dollars.
Many of us use personal loans, like those available through the Rocket Loans platform, to consolidate other debts. My experience with people who hit the debt wall with one of these larger personal loans, is that there are often more than one, and that significant credit card balances are common as well. I share several strategic thoughts below for those of you that fit this multiple debt scenario.
The higher your loan balance, the harder it can be to recover if you have a financial set back. And Rocket Loans may not have the same debt solution options a typical bank lender would offer you.
Options when Your Rocket Loan Cannot Be Paid
Hardship payment plans with Rocket Loans are currently only available for a temporary duration. Many regular brick and mortar banks often offer reduced interest rates and lower monthly payments for the life of the balance to those of us who qualify. Rocket Loans typically limits these lower monthly payments to just a few months. That is great if your setback is temporary but not going to help much if you need more accommodation than that.
All that said, and because many of us do have more debts to contend with and not just Rocket Loans, you may want to think about your other lenders hardship and debt solution options. You may get enough relief from say, your credit card lenders and others, to allow you to stay current or get caught up with your Rocket Loan payments.
You can schedule a call with me and I can review all your creditors behaviors with you to see if something like this will work for you given your current financial situation. I do not charge anything for these initial phone consultations.
Negotiating settlements on your Rocket Loan
If you are considering settling your Rocket Loan for less, it typically means you have to be late a few payments or more. This is not unique to this lender. Virtually all creditors require you to be late paying them by at least a few months before you can have productive conversations about settling for the least amount possible.
At the time I am publishing this, it is not all that common to reach a negotiated settlement with Rocket Loans directly, so you wait for them to place accounts with an outside third-party debt collector.
Settlement outcomes on Rocket loans can vary. Here are some things I will look at with you:
- Who did/will Rocket Loans place your account with for collection?
- Can you pull together enough for a lump sum settlement paid in one shot?
- If you need to split the settlement payments up over time, how much time will you want or need?
- How collectable do you look on paper to debt collectors (is your credit still in okay shape other than this one loan, or is it impaired by many late accounts)?
- How long ago did you originate your loan?
Because Rocket Loans is just a lending platform, and not necessarily who provides the money to fund your loan, the lender involved in your loan can sometimes be a determining factor in what happens with your loan. At the time of publishing this the money behind Rocket Loans is typically Cross River Bank.
I can help you better target how low your Rocket Loans settlement could be on a phone consult you can schedule with me here.
Bankruptcy and Rocket Loans
Rocket Loans are typically unsecured debts. These types of loans are ideal for discharge in a chapter 7 bankruptcy. If you qualify, chapter 7 can wipe out the balance on this loan, as well as your other unsecured debts.
If your Rocket Loan is part of a chapter 13 bankruptcy repayment plan, you may end up paying the full amount, or less than the full amount, over what is commonly a 5 year payback period through the court.
Debt settlement and hardship plans cannot compete with the relief you get from chapter 7, but settlement could be better for you than chapter 13.
You can schedule a call with me to talk about your qualifications for chapter 7 in your state, and to compare your alternatives if you want to avoid bankruptcy.
Can you be sued for a Rocket Loan?
Yes, but you can prevent it. I have seen Rocket Loans go direct to a collection law firm. But we can help you negotiate a settlement to prevent a lawsuit from being filed.
Your debt could be sold to a debt buyer, and they could send your account to an attorney for collection. We typically avoid this by reaching a favorable settlement with the debt buyer beforehand. If you do not have the money to fund a lump sum settlement we can get the reduction and typically a good amount of time to pay the settlement (many months up to a few years).
Even the collection law firms, if you let it get that far, will typically have options to pay over time.
Lawsuits on Rocket Loans are avoidable if you put together a workable plan ahead of time.
Be sure to post questions and concerns you have in the comments below. I answer those as they come in. If you prefer to keep your financial details private, I can still answer your questions if you schedule a free phone consult with me below.
If you want help resolving a debt with Rocket Loans we are a good and far more affordable resource. We can talk about what that might look like on a call too.
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