Few things are more frustrating than defaulting on your student loans. Think about it: You take out loans to pay for an expensive education to better your life, then you try to repay those loans once you graduate, only to get behind on payments and end up in a dangerous amount of debt. How is that fair?
Many people believe that it isn’t, and many modern politicians are making moves to reform the American educational system’s way of charging people for their education. Unfortunately, that doesn’t do much to help those of us who are already long since graduated and shouldering thousands or even hundreds of thousands of dollars in student loan debt.
Here, we will examine how defaulting on student loan debt affects a person’s credit and financial future, as well as how the private student loan statute of limitations in the state of Florida can impact these cases.
What is Student Loan Debt Default and How Does It Impact You?
Many people do not realize just how serious student loan debt can be when it comes to the rest of your financial future. What may seem like an afterthought during and after your college years can become a burden hanging over your head for many years to come, if not given the attention it requires.
In order to go into default, student loan accounts typically must first be inactive for a period of approximately 270 days. This means that no action is being taken on the account toward payment on your behalf. Once this occurs, the account status is reported as being in default to your credit agency, and an impact on your credit rating will become visible.
The difficulty with having a default notation on your credit report is that even once these debts are paid off, the notation remains in place. That means that future creditors will be alerted that you were once in default of your loan. This can make it very difficult for you to open any new lines of credit or receive any loans moving forward – and nearly impossible to do while you are still actively working toward resolving your default loan.
Some types of student loans can be sold to collections agencies once they are in default, increasing the likelihood that you will receive collections calls or other communications seeking repayment of these debts. Likewise, these debts may be referred to the IRS for wage garnishment, tax offset of your or your spouse’s tax refund amounts, and more. These are just a few of the measures that can be taken to recover outstanding student loan debt – and just a few of the reasons why it is so important to understand the importance of resolving these debts promptly or knowing the private student loan statute of limitations in your area.
How Does the Private Student Loan Statue of Limitations Impact My Debt?
How private student loans are handled differs from other types of student loans. This also varies from state to state, so it is important to understand these differences when you are carrying student loan debt.
In the state of Florida, the private student loan statute of limitations is typically five years. This means that once five years have passed since the last action was taken on your account, your creditor will no longer be able to sue you for the amount you owe. In essence, this protects you from legal action on their part.
There are a few things to remember in this situation, however. First, the statute begins counting toward its five-year time limit from the date of your last meaningful action taken – not the date on which the loan was applied for or approved. This can make for a major discrepancy, so be sure to account for this when formulating a defense.
When dealing with a private loan agency, your best bet is always to speak to a bankruptcy or other financial attorney. A legal professional can help you understand your options and whether you have a defense or not. Paperwork and proceedings for these cases can be complex and confusing, so partnering with someone who understands the process can be very reassuring.
A few reasons you may have a valid defense against paying the amount being sought by a private student loan agency include but aren’t limited to:
- The private student loan statute of limitations has expired.
- You were the victim of identity theft and did not take out the loan in question.
- Your loan was canceled for some reason beyond your control.
- Your education was interrupted by your institution closing, a natural disaster, displacement, or other major conflicts beyond your control.
- The holder of your loan is seeking more than they are entitled to as agreed upon in the original terms of your loan.
- You were not properly informed of the terms of the loan when agreeing to them. (This can be very difficult to prove.)
- You have already discharged this amount in the proceedings of a bankruptcy or other debt relief measure.
Before attempting to argue any of these, however, it is always crucial to seek the counsel of a legal professional.
You can move past this part of your life and on to something better!
Those having difficulty with student loan debt and wondering how the Florida private student loan statute of limitations might impact their case would ultimately be best served by speaking with a legal professional.
Van Horn Law Group can help you navigate the confusing and frustrating landscape of student loan debt and find the solution that works best for you – including potentially having a portion of your debt dismissed if you are outside the statute of limitations.
Chad T. Van Horn, Esq. is a South Florida business leader and founding partner attorney of Van Horn Law Group, P.A. Through a combination of dedicated philanthropy, spirited entrepreneurship and legal expertise, he applies his resources and network to helping people. Learn more about Chad Van Horn