Debt owed to a university

Anonymous · ‎02-20-2008

OK, this one feels like a doozie to me... For the last few months, I have been working very hard to improve my credit and I've gotten a few things removed, opened a new credit card account and was seeing my scores rise. (FAKOs currently TU 581 EX 678 EQ 563)

Out of nowhere, I received a letter from my college, reminding me about the debt I owe them. Instead of the $3500 I originally owed, the balance is now over $7500. I haven't heard from them in over three years, so this letter was quite shocking.

They gave me two options: pay the balance within 60 days and they will knock off around $2000 of the service fees; or set up a payment plan, which requires them to file against me in small claims court, adding an additional $1000 in attorney's fees and filing fees.

Unless I can get a personal line of credit from my bank, there is no way I can pay $5300 in the next 60 days. So, it's looking like I'm going to get sued. And there go my dreams of buying a house this year.

But here's my question: the debt is from the Spring 03 semester. Does the statute of limitations apply to a state school debt? (The money was owed directly to the school; it was not a loan.) I think the statute of limitations is 5 years in Oklahoma. The problem is, I don't know the date the clock started ticking, because its never appeared on my credit report. What should I do? The woman I spoke to said I could take a week or two to decide what I want to do. Help!!

ETA: The woman I spoke to is from the Collections Dept of the university, so it's not a collection agency.

Message Edited by TracyFace on 02-20-2008 06:36 PM

Anonymous · ‎02-20-2008

See if you can't sign a promisory note with them to repay without them having to sue. Although the problem maybe that you defaulted on the original promisory note. Is the money perhaps froma student loan that was administered by the school such as a Perkins Loan. If so go to dl.ed.gov and try to get a direct federal student loan to pay this back. I did this on my Perkins and Texas Guaranteed Student Loans that were in default for years. The guaranteed student loan doe not even show on my crpt. The Perkins shows paid in full/ pays as agreed.

Anonymous · ‎02-20-2008

If it saves you $3,000 and keeps you from having a judgment on your credit, I would ask them what credit cards they accept. Or get the personal loan. Or do whatever you have to do to to keep in from going to collections or the court systems. Even if you have to put off buying a house for another year, having a judgement and/or collection will keep you from buying a house for MUCH longer than one year.

Anonymous · ‎02-20-2008

@Anonymous wrote:
See if you can't sign a promisory note with them to repay without them having to sue. Although the problem maybe that you defaulted on the original promisory note. Is the money perhaps froma student loan that was administered by the school such as a Perkins Loan.

No, it definitely wasn't a loan; I owe the school directly. If you don't use loans, you can either pay in one lump sum or up to (I think) three payments through the semester. I'll check about the promissory note...

braznyc · ‎02-21-2008

I would definitely call the University. I know exactly what you're talking about, my university offers a "payment plan" and it's usually via the Tuition Pay website. I know my university will hold grades, degree, freeze from registering etc.

I called the bursar just out of curiosity and she said it takes them (again my university) years to do the judgment, and it's not considered a "student loan". I would call the university you attended and ask basic general questions without giving too much info. I doubt a promissory note is involved, but again this could be per university.

Anonymous · ‎02-21-2008

@braznyc wrote:
I would definitely call the University.

What should I say? I just talked to them and they gave me options listed above...unless I come up with $5300 in 60 days, they are going to sue me. I'm not sure what I could say to them...

braznyc · ‎02-22-2008

Do you live near the university? Can you go in person and plead your case? I'm sure there has to be a sympathetic ear, at least if you go in there is this human to human contact.

I just re-read what you've said, and wow they want to take you to court in order to do a payment plan. I guess I figured that talking to someone in the Bursars office to perhaps give you a little more time to pay would work, because if they go to court I'm sure it will land on your CR.

Message Edited by braznyc on 02-22-2008 01:55 PM

Anonymous · ‎02-22-2008

I just got off the phone with them again. The only thing they can do is try to get more of the service fees suppressed. She is going to talk to their lawyer and see if they will approve that. Even if they will agree to that, I still have to come up with $3500-4000 in 60 days or my dreams of buying a house are crushed. All of this while trying to plan (and pay for) our wedding which is in October.

I applied for a personal line of credit at my bank and they denied it. She said you can't have anything negative on your credit report at all (I have two collections; one is six years old and one will be two years old in July) and you have to have at least half of the loan amount in liquid assets to be approved. I mentioned that if I was in that type of financial situation, I probably wouldn't need a line of credit.

At this point, I guess the best I can do is hope that I can get the amount owed reduced, get a part-time job and look for stuff to ebay. At the same time, I have no idea how I'm going to pay for my wedding. I am crushed. After working so hard for the past few months to get our get scores up, it may have all been wasted effort.

Anonymous · ‎02-22-2008

Tracy Just because your bank denied you does not mean that you can not get a personal loan. Try another bank or even a credit union in your area. Credit unions are often more flexible. Also ask about wether dings like collections will prevent you from getting the loan before you apply.

Good luck and hope your wedding turns out to be what you always dreamed it would be.

Anonymous · ‎02-22-2008

TracyFace wrote:
I just got off the phone with them again. The only thing they can do is try to get more of the service fees suppressed. She is going to talk to their lawyer and see if they will approve that. Even if they will agree to that, I still have to come up with $3500-4000 in 60 days or my dreams of buying a house are crushed. All of this while trying to plan (and pay for) our wedding which is in October.

I applied for a personal line of credit at my bank and they denied it. She said you can't have anything negative on your credit report at all (I have two collections; one is six years old and one will be two years old in July) and you have to have at least half of the loan amount in liquid assets to be approved. I mentioned that if I was in that type of financial situation, I probably wouldn't need a line of credit.

At this point, I guess the best I can do is hope that I can get the amount owed reduced, get a part-time job and look for stuff to ebay. At the same time, I have no idea how I'm going to pay for my wedding. I am crushed. After working so hard for the past few months to get our get scores up, it may have all been wasted effort.

You can try Prosper. I have a friend who borrowed through there and has had no bad experiences. Depends on your credit. Check it out.

Also, is it possible for your fiance or someone to help you out with a loan from them or maybe they can get a personal loan to help you?