HELP!! NEED ADVICE QUICK....

[Rilestyle]

I have had a defaulted student loan for many years.(Sixteen to be exact.) Yes, I do owe on the loan, but there are circumstances behind the default. My ex-husband left me in the lurch 5 days before we had our son, basically leaving me peniless and I was unable to pay on this debt due to a financial hardship, and by the time I tried to work something out with the Colorado Student Loan Program, a collection agency had taken over. These collection agents have been brutal and like sharks that won't let up. They demand that I send them a $2,000 payment right off the bat which I don't have. After my tax return has been seized many times the amount owed is still considerably greater than the original loan amount.

 

Here's what I'm wondering about though. I had to file BK in July. I understand that student loans are non-dischargeable, However....I was asked to list all debts that I have incurred and currently owe. I included the CSLP loan. Now, today I received a threatening letter from a collection agency telling me I better pay up on this debt. This debt has not listed on my credit report for years. My question is this: Can this debt be listed again on my Credit reports as an outstanding debt or does Student Loan reporting also have to abide by the SOL of reporting even if the amount is still owed? I realize that I have to clear this debt up, but after all these years I would be heart broken if it suddenly appeared on my reports again.

TIA

[LynnInMN]

Yes it can show up again.

 

CSLP is a FFELP lender. If a FFELP lender is unsucessful in collecting on a default, the DOE subrogates the loan, which mean basically that the DOE pays off CSLP (at a discount) and the DOE collection service starts collecting it. Reporting cycle starts all over again.

[Rilestyle]

Why I'm perplexed about is that I've gotten many of these threatening letters over the years but yet to have them show up on my reports for about 8 years and I'm just curious why they haven't shown up.

[LynnInMN]

Why I'm perplexed about is that I've gotten many of these threatening letters over the years but yet to have them show up on my reports for about 8 years and I'm just curious why they haven't shown up.

 

 

If you have been in default for 16 years, the reporting SOL caused the tradelines to fall off 9 years ago. You receive the letters because there is not SOL on student loans and they will continue to collect. At 16 years in default you are more than prime for subrogation...it could happen at anytime.

[Rilestyle]

Plese forgive me, but I don't quite know what subrogation means. Is there a link that I can read up on this? Thankyou very much.

[LynnInMN]

Plese forgive me, but I don't quite know what subrogation means. Is there a link that I can read up on this? Thankyou very much.

 

 

Subrogation is exactly what I posted in my first post. The DOE pays off CLSP, at a penalty. Then the US DOE starts collection proceedings all over again with the US DOE collection service. If you suddenly see an increase in collection activity, it is a good indication that subrogation is around the corner. Generally the FFELP lenders are given 45-60 days notice, so the lender will make a final push as they lose money if the loans are subrogated.