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Member
haytertots
Posts: 15
Registered: ‎08-02-2008
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statute limitation private student loans

I have a question I hope someone can help me with.  When I was in college I took out 2 private institutional loans through my university, one in 1997 for $1000 and one in 2000 for $7000.  I graduated in 2002, and immediately consolidated all my federally-subsidized loans.  I have been paying on them ever since, and have never missed a payment.  However, it appears my two private loans were not included in my consolidation. 

 

Fast forward 15 years.  In April, 2012, they appeared on my credit report as a "charge-off, 0 balance, date of charge-off 3/12/12".  DH and I are saving to buy a house in the next six months, and this just dropped my fico score from 720 to 612 overnight!  In the past 15 years, I have never received a bill from my old University, nor have they attempted to collect, nor have these been listed on my credit report before.  In short, I had no idea these were not consolidated and were still outstanding.

 

I looked at my promisory notes, and there is no federal guarantee on these loans.  I also checked with the National Student Loan Database, and they are not listed in my file.

 

My questions, then are several:

 

1.  If the loans are truly private, aren't they subject to a state's regular statute of limitations for loans, and therefore past the date which they can report to my credit report?

2.  If I have had no activity on these loans for 15 years, and thereoretically defaulted 10 years ago, why are they listing the date of activity as "3/12/12"?  This in effect puts these charge-offs on my credit report until 2019. 

3.  I would like to dispute these.  Does anyone have advice as to the best method?

 

Please know that I am not one to avoid my obligations.  If I truly owe these loans, I will work out a plan to repay them with my university.  However, I do not want a 15 year-old debt popping up to prevent us from buying a home.

 

Thank you for your advice.

 

 

Moderator
pizzadude
Posts: 9,674
Registered: ‎01-28-2010
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Re: statute limitation private student loans

[ Edited ]

 

1.  If the loans are truly private, aren't they subject to a state's regular statute of limitations for loans, and therefore past the date which they can report to my credit report?   

 

The Statue of Limitations is the period of time in which legal action can be brought against you for unpaid debt.   I would look into the SOL for your state for written contracts to see where you stand on this, my understanding is that private student loans would be considered written contracts.   The credit reporting time period ( CRTP ) should be 7.5 years from the DOFD of the account, which is the first time that you became deliquent prior to the accounts being charged off or sent to collections.    Based on what you have said it sounds like the DOFD for these loans would have been in 2002, if you made no payments since then....is that accurate ?

 

2.  If I have had no activity on these loans for 15 years, and thereoretically defaulted 10 years ago, why are they listing the date of activity as "3/12/12"?  This in effect puts these charge-offs on my credit report until 2019.    

 

You should check to see if there is a DOFD reported ~ what CRA are you looking at ?   If you pull your Equifax report there should be a DOFD, the reports from Transunion and Experian show an estimated drop~off date.    Even though you defaulted many years ago, it sounds like they kept the accounts open and didn't charge them off until now, but they would still have to report a DOFD if they are reporting them as charged~off now.    This is a very strange situation, it sounds they are reporting you as being retroactively deliquent for the past 10 years !    IMO even though the charge off event happened this month, the deliquencies preceeding should preclude it from being reported.   

 

3.  I would like to dispute these.  Does anyone have advice as to the best method?  

 

In order to determine the best approach for this, can you provide some additional information ~ who is the creditor reporting this charge~off, is it the university ?    Are the loans being reported as installment accounts or as collections now ?

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Member
haytertots
Posts: 15
Registered: ‎08-02-2008
0

Re: statute limitation private student loans

Pizzadude, thank you for your reply.  Here is some information from my Equifax credit file, which will hopefully answer some of your questions.

The student loans in question are not with a collection agency, the charge-off report came directly from Cornell University.  The report looks like this:

 

Type of Account:  Individual

Status:  Chargeoff

Term Duration:  120 Months

Date Opened:  1997

Date Reported:  2012

Charge Off Amount: $7,095

Balance: 0

Amount Past Due: 0

Scheduled Payment Amount: $86

Date of Last Activity:  N/A

Date Major Delinquency First Reported: 04/2012 

Months Reviewed:  N/A

Date of First Delinquency:  3/2012

No 81-Month Payment Data available for display.

 

The reports for both loans look identical, just with different dollar amounts in the charge-off column.

 

Clearly, they have reported my date of first delinquency wrong.  As, since I've never paid on these loans, my first delinquency would have occured sometime in  2002 or 2003, not in March of 2012.  The fact that they've included no 81 month payment history seems weird, as well.  I mean, if they are going to charge-off a loan that has been delinquent for 10 years, wouldn't they have 10 years of negative history? 

 

I also checked my TU and EXP reports, and they are reporting similarly.  TU states the date the report will be removed from my file as 3/2019.  So it looks like all the bureaus are treating this as a new report, and not a 10 year old debt.

 

I really would like to dispute these.  Any advice on how to proceed would be greatly appreciated.

 

Thanks!

Valued Contributor
IOBA
Posts: 2,691
Registered: ‎08-13-2009
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Re: statute limitation private student loans

haytertots - it sounds like the school finally removed the debt from their books in 2012 as a charge off.   That they can report for the next 7.5 years.

 

All of the previously missed payments can only report up to 7.5 yrs.

 

Have you considered paying the school and asking them to delete the tradeline?

 

Have you been contacted by any CA?   Once the school charges it off, then the next step would be to sell it to a CA.

Moderator Emeritus
webhopper
Posts: 7,230
Registered: ‎09-16-2011
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Re: statute limitation private student loans


haytertots wrote:

Pizzadude, thank you for your reply.  Here is some information from my Equifax credit file, which will hopefully answer some of your questions.

The student loans in question are not with a collection agency, the charge-off report came directly from Cornell University.  The report looks like this:

 

Type of Account:  Individual

Status:  Chargeoff

Term Duration:  120 Months

Date Opened:  1997

Date Reported:  2012

Charge Off Amount: $7,095

Balance: 0

Amount Past Due: 0

Scheduled Payment Amount: $86

Date of Last Activity:  N/A

Date Major Delinquency First Reported: 04/2012 

Months Reviewed:  N/A

Date of First Delinquency:  3/2012

No 81-Month Payment Data available for display.

 

The reports for both loans look identical, just with different dollar amounts in the charge-off column.

 

Clearly, they have reported my date of first delinquency wrong.  As, since I've never paid on these loans, my first delinquency would have occured sometime in  2002 or 2003, not in March of 2012.  The fact that they've included no 81 month payment history seems weird, as well.  I mean, if they are going to charge-off a loan that has been delinquent for 10 years, wouldn't they have 10 years of negative history? 

 

I also checked my TU and EXP reports, and they are reporting similarly.  TU states the date the report will be removed from my file as 3/2019.  So it looks like all the bureaus are treating this as a new report, and not a 10 year old debt.

 

I really would like to dispute these.  Any advice on how to proceed would be greatly appreciated.

 

Thanks!


It seems like the DOFD is wrong on this... you could dispute that.. if you have any paperwork that says the opposite, you should make a copy and dispute this with the Credit Bureaus... Creditors cannot re-age a debt like this. Its against the Fair Credit Reporting Act.


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webhopper
Posts: 7,230
Registered: ‎09-16-2011
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Re: statute limitation private student loans

I would definately dispute this, since the Day of First Delinquency is wrong


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pizzadude
Posts: 9,674
Registered: ‎01-28-2010
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Re: statute limitation private student loans

 

Ok, well I agree that the DOFD shouldn't be 3/2012, since you have been deliquent for 10+ years.    But can you clarify what state the loans were in when you stopped paying ~ or did you ever submit any payments on them after you graduated ?   I'm just wondering if the loans were somehow put into some type of deferrment or suspension status, and that this might have stopped them from being collected on.......Do you have any idea if this might have happened ??

 

Also, I'm not sure if you live in Jersey now, but the SOL for NJ is 6 years for written contracts.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Member
haytertots
Posts: 15
Registered: ‎08-02-2008
0

Re: statute limitation private student loans

Pizzadude:

 

The loans were originally taken in NY.  I moved to WA in 2003.  I never made a payment or applied for a deferment on these loans, since I thought they were included in my consolidation.

Member
haytertots
Posts: 15
Registered: ‎08-02-2008
0

Re: statute limitation private student loans

IOBA:  I agree that it sounds like they finally removed them from their books.  But does that supercede the statute of limitations?  This sounds like re-aging to me.  Also, if a DOFD is 10 years ago, and the statute of limitations has expired, can a collection agency legally come after me for these just because the university finally charged off the debt?

 

I would love to approach the university about a payoff, but I will need to save $7k cash first.  In the meantime, I'd like to dispute.

 

Sorry for so many questions, I am just really confused where I stand legally and how to approach this.

Moderator
pizzadude
Posts: 9,674
Registered: ‎01-28-2010
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Re: statute limitation private student loans

[ Edited ]

haytertots wrote:

Pizzadude:

 

The loans were originally taken in NY.  I moved to WA in 2003.  I never made a payment or applied for a deferment on these loans, since I thought they were included in my consolidation.



SOL for WA is also 6 years.   Maybe since you didn't make any payments, the loans were put into some kind of deferred status ~ does any of your loan paperwork mention this ?

 

Since the OC is reporting, I would initiate a dispute directly with them challenging their reporting of the recent deliquencies.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX

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