In Credit Solutions, CrediTlicious Tips, Q & A Friday, Statute of Limitations, Students

12002418_1657559654491504_5558038258738877344_oHey Hey Hey!

It’s Q&A Fridays!

Today’s Question:

Q: I have a private student loan with AES. I’ve had it since 2005. It’s still on my credit report and it was recently charged off and sent to collections.

I understand that private loans are held to my state’s statute of limitations. I’m in NY, my state’s SOL is 6yrs, shouldn’t it be off my reports and past collection times right now? I shouldn’t have to pay a debt this old!

~Ty

A: Good afternoon, Ty!

Hmm, the only time the credit bureaus will keep the account on your credit report is if it is still open during those 10yrs. In order for it to be deleted after 7yrs the status would need to be in a CLOSED status, and it will delete 7yrs from whatever event that caused it to close. As long as it is OPEN, it will still report. So… I would look at the payment history and see what the status has been during the 10yrs. Forbearance, Deferment, etc is still an Open status and it will extend both the reporting time and the statute of limitation time frame.

Anytime our student loans are in deferment/forbearance, the bill is not due and therefore the statute of limitations (SOL) is a non-factor; a debt will need to be in payment collection status – meaning they are sending you statements for payment – in order for the SOL to come into play. As long as it is in a non-payment collecting status the SOL is stopped. No debt is being collected on so the SOL clock has stopped ticking until it is back in repayment status..

I’d review the payment history, see if you have placed it in a non-payment status, when that status ended and start counting the reporting and statute of limitations from there.

Hope this helps!

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  • Sharon Thomas
    Reply

    Which loan servicer is the best to consolidate a loan with. I currently have navient. I want to consolidate my two loans. One subsidized one unsubsidized totaling about $6,900. in order to position myself for loan forgiveness. For PSLF. I am a minister / Chaplin. I applied for the loan consolidation through navient and the interest rate went from 6% to 6.875%. I did not pursue it at this point. I wanted to know between Nelnet and great lakes and FedLoan Servicing which one is the best one to consolidate with according to your recommendation. I’ve had the two loan sense 2008. Had never made a payment. Was in forbearance. For the life of the loan. Loans initiated in 2008. They were under Sallie Mae initially and then transferred to navient a lot of late and missed payments. Because of the lapse of forbearance. Most of the reports still are showing Sallie Mae and navient which technically they’re the same account. Had a lot of trouble trying to get them to remove the Sallie Mae entries. Hope you can help thank you for your time God bless

    • Netiva Heard
      Reply

      Are these federal loans or private student loans?

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