Bankruptcy Information | Do I Have to Pay a 40-Year Old Student Loan I Don't Owe?

Bankruptcy Information | Do I Have to Pay a 40-Year Old Student Loan I Don’t Owe?

24 May Do I Have to Pay a 40-Year Old Student Loan I Don’t Owe?

A Florida instructor was shocked by a telephone name from a set company saying she has to pay $2400 for a 40-year-old student loan or be sued. But she doesn’t owe the cash. She has by no means heard something about owing this cash. She contacted her student’s dad and my fellow blogger, Ft. Myers lawyer, Carmen Dellutri.

Does she have any recourse? Can they actually gather a 40-year-old debt? Maybe, perhaps not.

Time limits, known as statute of limitations, usually apply to most assortment of money owed. Eventually the debt will get so previous, assortment should cease. Public coverage favors cut-off dates due to the issue of proving previous money owed, funds made and any defenses as data disappear and reminiscences fade. Time limits additionally convey peace of thoughts to debtors and finality to the judicial system.

Time limits utilized to student loan collections till 1991 when Congress modified the regulation and eradicated the gathering cut-off dates for presidency student loans. Now, there isn’t any time restrict on assortment of presidency student loans, however there’s a time restrict on assortment of personal student loans.

So does our instructor have any choices? If this can be a authorities student loan, saying the debt assortment was time barred previous to the 1991 regulation change may work, however in all probability received’t. Most courts have dominated in opposition to debtors who declare the elimination of the statute of limitations protection doesn’t apply retroactively to loans taken out previous to the regulation change. If this can be a non-public student loan, and there have been no funds or different occasions that prolonged the cut-off dates, the gathering must be time barred.

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Our instructor’s finest guess is to defend the gathering by insisting she doesn’t owe the cash, interval. She didn’t return to the college for the second yr 40 years in the past. Either the loan was not disbursed or the loan was not refunded to the lender when she didn’t enroll on the faculty. She ought to write a letter disputing the debt in writing to the lender and the debt collector. The letters must be despatched by licensed mail, return receipt requested, so she will be able to show they bought her letters. Also, she ought to apply to the lender for a discharge of the loan based mostly upon failure to make owed refunds.

Under the Fair Debt Collection Practices Act, the collector should stop assortment of disputed money owed. If the collector doesn’t cease, our instructor ought to contact an lawyer about making a declare in opposition to the collector for violations of the Fair Debt Collection Practices Act. If the collector inaccurately reviews the standing of the debt to credit bureaus, she might wish to make a declare in opposition to the collector for violation of the Fair Credit Reporting Act. When she receives discover that her tax refund goes to be offset to gather the student loan, she’s going to wish to reply and dispute the debt. If our instructor is sued, she undoubtedly will wish to rent an lawyer to defend the lawsuit. She may wish to act proactively and file a declaratory motion to ask for a courtroom order declaring she doesn’t owe the debt.

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For extra data on student loans, see the Student Loan Borrower Assistance web site or the National Consumer Law Center student loan handbook.

For details about discharging student loans in chapter see posts by Craig Andresen and different bloggers within the Bankruptcy Law Network.

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Jill Michaux has helped Kansas shoppers with debt issues for 3 a long time. She and her companion, Mark Neis, are Topeka’s solely chapter specialists, board licensed in client chapter regulation by the American Board of Certification. She assist begin the National Association of Consumer Bankruptcy Attorneys.