|
You don't have too many defenses if you are sued. But you must know when the statute of limitations expires because that's probably you're only defense. The statute of limitation is the time that the Department of Education, Sallie Mae or your college has to initiate a lawsuit against you for defaulting on your loan. Here, time is your ally. Years may pass before anyone contacts you. And because there are so many student defaults, the agencies are overwhelmed with collection efforts.
If you are sued by the bank or college where you obtained your loan, then the state where you reside governs the statute of limitations. Check with your state office to find the time limits that can be anywhere from three to ten years. However, if you are sued by the federal government or Sallie Mae, the statute of limitation is six years. When a bank or college brings a lawsuit against you, the statute of limitation doesn't begin until the bank or college sells the loan to the government or to Sallie Mae. And they hold the loan for seven or eight years before selling
it. Only then does the statute of limitations apply and so then they have six more years to sue you before time runs out.
No law says a bank or college must inform you that they intend to turn your loan
over to the Department of Education or sell it to Sallie Mae You may only receive
a letter in the mail from Sallie Mae notifying you of the sale. But, if you've frequently
moved since you graduated college, or they don't have a current address on you,
you'll probably never receive such a notice. To find the current holder of your loan,
and the date your loan may have been sold, contact the college, bank, Sallie Mae
(800-292-6868) or the Department of Education (800-333-4636).
No matter which state you live in, the statute of limitations can be revived
and extended. If Sallie Mae or the government is the current holder of your loan,
and you write a letter informing them that you now intend to make payments, the
statute of limitations will start over from the date of the letter. Even if you
never fulfill the promise, the statute of limitations still starts again. If you
make any payment the statute of limitations still starts again. If you make any
payment, the statute of limitations begins again when the agency receives your payment.
In the case of your bank or college, only sending payment will not necessarily
reactivate the statute of limitations. In this case, to extend the statute of limitations,
you must put in writing that you intend to pay or continue to pay your debt.
Read every contract and agreement you ever signed with the lending institution.
If you missed a payment or stopped paying on the loan, did you try to renegotiate
payments with the lender? If so, did the lender send you a form to complete and
return? The form may have waived the statute of limitations. Colleges often agree
to reduce your payments or extend your payment period if you agree to waive or extend
the statute of limitations. Read your documents.
So you are being sued by the federal government, Sallie Mae, or your bank or
college? Don't panic. Take three deep breaths and consider six points:
- Did you sign a form or agreement that waived or extended the statute of
limitations? Look through your documents. If you did, you cannot use the statute
of limitations as your defense.
- You may have thought the statute of limitations had expired and you were
in the clear when you received that notice. Who is the notice or letter from?
Was the loan sold to Sallie Mae or given back to the federal government for
payment? If you find that the loan was sold or given back, call Sallie Mae or
the Department of Education and find out when they received the loan. Sallie
Mae and the Department of Education have six years after they receive the loan
to sue you.
- Were you granted a deferment for any reason? Were you out of the state where
the loan originated? Did you live outside of the United States for an extended
period of time? Were you in jail? If any of this applies to you, the statute
of limitations was "frozen" for that period of time and then reinstated.
- Did you inadvertently extend or revive the statute of limitations yourself
by making a payment or partial payment on the loan?
- Did you inadvertently extend or revive the statute of limitations yourself
by writing to the institution and promising payment?
- Did you miss a payment or two that resulted in the loan getting accelerated
by your college, bank, Sallie Mae or the government?
|
|
