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HELP - Do student loans have SOL


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I took a student loan back in 1992 from a school in NJ that failed to deliver the quality of education that I was expecting.

I was enrolled only 3 months, but when I first registered they did all the paper work for a student loan. When I dropped out I was told that the money that they had received ( I never saw one cent ) was going to be returned on my behalf to the lender, Chase.

In 1994 I relocated to FL and never thought about this again till 2001 when I enrolled in a University and found out that I didn't qualify for Federal student aid because I had a defaulted loan.

The NJ Higher Education authority had satisfied the loan with the lender, and the matters were in the hands of a NJ Law firm that was assigned to collect this debt.

I contacted this law firm and was advised that back in 1994 they had won a judgement against me in a NJ Court. I got this judgement later deleted from my credit report because it had been 7 years already.

In 2001 I made arrangements with this law firm to re-pay $100 a month and I did so for 6 months, then I stopped because I lost my job after 9/11.

Later I found out from my last employer that in early 2002 they attempted a salary garnishement but I was no longer there.

Now I receive a letter from this law firm saying the following:

We are in the process of preparing court documents to serve upon you, including but not limited to Orders for supplement Proceeding regarding your student loan. Your balance at this time is $3, 199.90 including interest.

I have sent today a DV letter CMRRR, this is my question: Is there a SOL on student loans? can they go back to the court case that they filed against me in 1994 and for wich they obtained a judgement and reopen that case? Did I voluntarily reaged the account when I made the 6 monthly payments in 2001? What is the best course to take on a situation like this?

Any HELP will be greatly appreciated?

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The Dept. of Education a decade or so ago tightened lending rules on student loans due to the number of people, professionals included taking out huge loans then defaulting or filing bankruptcy. As a reult the taxpayer was hit and deserving students could not get funded. You probably have two options at this point; repay the obligation or file bankruptcy given the original default was over seven years ago.

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You can no longer bankrupt a student loan.

The hardship clause still exists, so you can if you prove a hardship you can get them discharged. The problem is finding an attorney who will attempt it. Around here it costs $450 for a bankruptcy and the attorneys will say you can't discharge a student loan because it takes a lot of paperwork and time so it costs more that $450. You have to have a payment history showing that you attempted to repay the loans or at least a year and you have to also be in default for at least a year. You also have to show extreme hardship (basic life services), meaning that the cost of rent, basic home phone service, gas, electric, food (at the food stamp rate), bus fare to and from work/shopping and your student loan is more money than you make in a month and that this will not change significantly anytime in the next 7-10 years. My sister finally got hers discharged but then she pays $800/month for life saving drugs (even with insurance co-pays) and she had letters from her doctors, health & human services department and her local congressman as supporting documentation.

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You can no longer bankrupt a student loan.

The hardship clause still exists, so you can if you prove a hardship you can get them discharged. The problem is finding an attorney who will attempt it. Around here it costs $450 for a bankruptcy and the attorneys will say you can't discharge a student loan because it takes a lot of paperwork and time so it costs more that $450. You have to have a payment history showing that you attempted to repay the loans or at least a year and you have to also be in default for at least a year. You also have to show extreme hardship (basic life services), meaning that the cost of rent, basic home phone service, gas, electric, food (at the food stamp rate), bus fare to and from work/shopping and your student loan is more money than you make in a month and that this will not change significantly anytime in the next 7-10 years. My sister finally got hers discharged but then she pays $800/month for life saving drugs (even with insurance co-pays) and she had letters from her doctors, health & human services department and her local congressman as supporting documentation.

Makes sense......My friends BK Attorney told her that it could not be done. She had 1 that was paid off and one owing about $1200.00.

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I most defenitely want to pay, but since I don't have all the money at once I need to work out a repayment schedule the law firm handling the collection wants a min. of $100 per month, that is a beat over what I really can handle so that I don't end up screwing up again. I could budget $50 to $75 tops at this time.

Since I am going to be paying for a long time, it seems that the best way to handle this would be to reahabilitate the loan, meaning seeing if a bank could repurchase the obligation with a gurantee from the state, that way it could be stretched over a period that would easily give me the range of monthly payments that I need, not to mention that way I would also have a TL reporting to the bureaus.

How to go about accomplishing all this is the PROBLEM.

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