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Private Loan Collection & SOL?

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I'm hoping you all can offer some advice/insight.

Received PHEAA (Pennsylvania Higher Education Assistance Agency) loans for college during the period 1982-1986. The local bank that funded the loans went under in the late 80's and the loans were acquired by a consolidated bank in Texas.

I moved to Maryland and married in 1990 and at some point, Great Plains Capital Corp (GPCC) acquired the loan from the Texas lender. Long story short, my husband took over all the bill paying and without my knowledge stopped paying my loan and began intercepting the collection letters and calls. Again, I had absolutely no idea this was going on.

We eventually divorced and I moved back to PA in 2003. In April of 2004, I received a letter from GPCC, indicating that it had been "several years" since they received any response from (me) about my delinquent student loan. The letter, of course, included the standard threats of further collection, legal action, etc. At that time, I wrote back (unfortunately I don't have a copy of my letter to GPCC) stating that I had no idea the loan was still outstanding and asked for documentation of the balance, etc.

In response, I received copies of correspondence between GPCC and my ex, a Contract Inquiry Payment History showing a last payment date of 8-22-96, and a copy of a PHEAA repayment schedule disclosure statement, signed by me in 1989 when the loan was taken over by the Texas lender. The repayment document states that it is "provided for in the promissory note(s) you signed under the PHEAA administered Guaranteed Student Loan Program or PLUS Program."

To be perfectly honest, after receiving the documents from GPCC in May of 2004, I threw them in a drawer and forgot about them.

Several weeks ago, I received another letter from GPCC, stating that the collector (same guy since the 1996 correspondence with my ex) was folling up on his correspondence from several years ago.

So my questions to the forum are: do the laws pertaining to debt collection apply to private (non-federal) student loans? Does the SOL apply in my situation (in PA, the SOL for debt collection is 4 years I think)? Can GPCC still seek a legal judgment against me? Is sending the GPCC a debt validation letter appropriate in this case?

Thanks much for any insight you all can offer!

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I wanted to update this post and add the latest development.

Since I didn't receive a response to my original post, I took a chance and sent the creditor a DV letter. The collector sent a response letter that briefly noted how his firm acquired said loan. He included, again, a copy of the repayment disclosure statement I mentioned in my previous post, but did not include copies of the original promissory notes (though he mentions in his letter that his firm holds the original notes).

He again offered a repayment schedule and says that if I don't respond by November 15th, his firm will - of course - proceed with the remedies available to them.

So again, my question whether or not these private student loans, not federally backed, 24+ years old and issued by a bank no longer in business are collectible? Can this firm sue me or garnish my wages, or would fall under PA's SOL?

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PHEAA is a state program that backs loans. You probably still owe. Call PHEAA directly and find out. They can tell you what laws apply.

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Thanks much for responding - really appreciate it!

I also posted the question on a website where attorneys answer basic legal questions. I finally got an answer, from an attorney in NY, and here's what he said:

"A statute of limitations does apply against subsequent assignees or transferees of a note--they cannot start the statutory period to sue over by buying the note (or the business, etc. which itself owns the note), but instead, the statutory period will determined from when the action or event giving rise to the cause of action occured. On a note, that is when the default occured, or when an installment was not paid when due (which is usually sometime after the last payment actually made).

They can try suing you; you can then raise the statute of limitations for a promissory note (it should be the one for a written contract) as a defense, if you believe that the actual default occured long enough ago that the statute has since run."

I have an email in to a local consumer attorney who specializes in debt collections, etc. I can't really afford to hire an attorney but he offers free consultations....which I may not need since I plan to follow your advice :wink: and call PHEAA myself.

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Generally, SOL is probably not going to apply in this case. I would hazard a guess that, even though these are not Federal loans, they conform to Federal standards for student loans.

I have private student loans that have wound up with AES, the private arm of PHEAA and they are rediculous to deal with!! However, as far as student loans go, they are relatively easy to get whatever payments you need.

This collector has been REALLY nice so far, and explaining the situation to him might not be a bad idea, but remember, "I thought my ex had paid it..." won't get you ANYWHERE in court, so you need to keep it out of there.

It is very likely that the firm no longer has the original promissary note, but this isn't like a credit card company. This is money that was backed by a government source, which means you won't have as many options in court.

I'm looking back at your threads and it appears this might have been a Perkins loan? Perkins loans originate in funding from the federal government that generally goes to the state and is then given to individual institutions to distribute according to need. So, they seem like private loans, but TRUST ME, they aren't and they have the exact same SOLs and everything else as regular Stafford loans. Which means the only real ways to get rid of it are to pay it off or die.

Good luck!

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Haven't had a chance to call PHEAA yet, but me paying is probably where this is headed. It wasn't a Perkins loan.

I do wonder though if the fact that the bank went under and sold the loan *before* I defaulted has any bearing? And in fact, the bank went under and the loan was sold twice before I even defaulted.

Wishful thinking on my part....

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My understanding there has never been a SOL on a student loan. Mine caught up to me after 12 years. I entered a loan rehab program and got it back on track, but they will chase you until you die basically.

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Personal Bankruptcy

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My understanding there has never been a SOL on a student loan. Mine caught up to me after 12 years. I entered a loan rehab program and got it back on track, but they will chase you until you die basically.

______________

Personal Bankruptcy

Federal Student Loans are "one thing", not so sure about SOL on PRIVATE student loans, it would "seem" they are just loans (not the same as Fed loans) and would be subject to same laws? Really hard IMO to get any information on this for some strange reason

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Private student loans are subject to the SOL, so your loans are likely too old to be collectible. Only federal loans are not subject to the SOL. I'm in a hurry now, but if you're still around, reply on this thread and I'll cite the law. I tried to email you but can't email members yet b/c my posts are too few. The collector probably knows the law's on your side but hopes YOU don't know.

Good Luck

Edited by Poppa Dop
typo

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See my post on SOL's. I'm with Poppa Dop-there is a statute of limitations as long as the loans are, in fact, private. It is my understanding that PHEAA is a state guaranty agency for federal and private loans. In order to find out if these specific loans are federal, check your loans under the National Student Loan database. If they do not appear, they are not federal loans, and even though they are guaranteed by PHEAA, they are subject to sol's.

For those who may disagree...consider this:

If I had car insurance through Progressive and Toyota insured all of their cars through Progressive, would Toyota be a tertiary insurer of my car? NO.

To say that a loan is federally backed because it is guaranteed by an agency which also guarantees federal loans is erroneous. They are not federal by affiliation...

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