I have an old student loan that has been in collection for quite some time with Credit Recovery Services, LLC. They sent a letter stating my loan will go to lawsuit as per request of their client. I have tried contacting them a few years ago and the woman who had my account was terrible and harassing. I couldn't afford the payments they wanted me to pay at the time and they refused to work anything out so I stupidly retreated and just forgot about the situation again. Now I have this letter and I don't want to deal with court. I read on a few other threads that sometimes you can convince original lender to take back debt and work with you. I'm wondering if because this loan was thru my actual university if they'd be willing after my explanation of my original hardship, and why I never worked with CRS to get this paid. I'm also confused bc CRS shows nowhere on my credit report at all? My university loan that was charged off long ago only shows reported under one beaureu as well? I mean I guess I shouldn't complain? and I'm totally green when it comes to all of this but is it kind of strange these people want to sue me but yet are nowhere on my credit report?
How old is the debt? Whats the SOL in your state? Is it federal or private? Federal student loans don’t fall under the statute of limitations on debt. Private student loans, on the other hand, can be covered under the statute of limitations. However, for some states, private student loans might take longer than other debt to become time-barred debt. That’s because you generally have to sign a promissory note to take out private student loans; depending on the state, those promissory notes could mean there is a longer time period before the statute of limitations on debt expires.
I wouldn't try working with the university, if they "charged it off long ago" that means they wrote it off and sold the debt to a debt collector at a substantial discount, but of course the debt collector will try to collect the full amount of debt plus fees they tack on. The letter letter stating the loan will go to lawsuit "as per request of their client" sounds like B.S.. One, unlikely they have a "client", and two is their address in the same state where you live? They would have to file a lawsuit in a court that has jurisdiction where you live; meaning they can't file a lawsuit in Delaware is you live in Florida for example. How much is the amount of debt they claim you owe? It is very expensive to hire lawyers in anther state.
The advice by Firemedic is good - check the "Statute of Limitations" for debt in your state. Federal guaranteed student loans have no statute of limitations, but if the loan was directly from the university it is likely a "private" student loan, and as such subject to statute of limitations.
The debt is from I believe 2015... That's the year I lost the contract of my pharma job and thus entered the perpetual downward fall to hell of my credit. I'm not sure if I did anything to reset the SOL when CRS was not being cooperative a few years back. I assume I did by answering and just admitting the debt was mine. I'm in PA as far as I understand SOL is 6yrs. I did look up SOL for private student loans and found 4 years. Would that be correct though?
Well that's the part that confused me. There verbiage in the letter made it sound like they were still collecting the debt FOR the uni. But if they uni charged it off they already took their loss, and it's no longer theirs. Idk who else the "client" would be. Anyway yes the office address is in same state as me (PA)... the amount of the loan is $6,340 or something like that. Not a huge amount but not exactly an amount I can't just call and settle either. I have most of my private student loans thru Wells Fargo (now Firstmark) and those have been in excellent standing since the beginning because my Dad is a cosigner on those (irrelevant info). I just don't know how to proceed with this. Just let it go and see what happens? If I'm close to SOL I don't want to reset anything, which maybe that's the case and their just trying to scare me before their time is out. I have no idea how to find out at this point. I have no paper trail. And like I said it's not ANYWHERE on my credit report so I have no solid idea on dates. I've had 3 babies in the last 4 years... It's no excuse for letting all this go to heck but yea, I've been busy with other things lol
This happened to me years ago but for a credit card debt. I would get this threatening letters but it wasn't anywhere on my credit report and it wasn't with the original holder. I called the attorney general for advice and they advised not to pay the debt and to send the company a cease and desist letter. I never heard from them folks again. Call your state's attorney general office first before doing anything. Just make sure to check all reports and make sure they are not reporting under another name on the report before calling.
A couple things at work here. 1 is legal and 1 is credit health:
Credit Health: after 7 years it may remove from your credit report. which is helpful. depending how it moves through collections or if you acknowledge/pay it, it may come back on in some form. the important thing to note is being in the clear credit wise doesnt put you in the clear legally. they can still come after your for the debt, well after 7 years if they feel its worth their time.
Legal: Lawyers are loud and threatening. mostly because it is effective. at the end of the day, if you go to court, its not a criminal case. you arent doing jail time. so i wouldnt worry too much about threats. as far as what they can get from you, judges in these cases, ALWAYS prefer the parties work it out instead of ruling themselves. you making efforts to work with them would likely work in your favor in court.
at the end of the day, even if you lose in court, they cant get blood from a stone. they cant get money where there is none, even if they win. Even if you have some money, a court likely wouldnt force you to use 100% of your assets to pay the debt once you submit your financial statement.
going to court may not be the worst scenario for you.