student loan default and legal ramifications?

[stainless]

if i defaulted on a large student loan from almost 20 years ago, what legal action could they take against me? sieze assets? personal and business accounts? garnish wages? i'm self employed - could they attach business accounts? i guess i'm just wondering what could happen eventually? involuntary collection?

[OneStep]

There is no SOL on student loans. They can garnish wages and take income tax refunds, I know. You will also be ineligible for FEMA if you ever get caught in a disaster. They can also garnish Social Security retirement payments if I recall correctly.

 

Not sure about the seizing assests/bank accounts.

[LynnInMN]

Department of Ed has access to your IRS data base and tax records, so finding you and any source of income and/or assets is not difficult for them.

 

DOE does sue, particularly on large balances and the self employed. They will use the judgement to collect.

 

Do what you can to avoid default.

[stainless]

so if they do in fact sue, once a judgement is made, could i declare bankruptcy to eliminate it - since it would then be a judgement and no longer a student loan?

 

if they did sue, and judgement was made, i'm assuming their involuntary collection would be to sieze assets?

[LynnInMN]

so if they do in fact sue, once a judgement is made, could i declare bankruptcy to eliminate it - since it would then be a judgement and no longer a student loan?

 

Nope. I believe that the HEA prevents this.

 

if they did sue, and judgement was made, i'm assuming their involuntary collection would be to sieze assets?

 

That is my experience. I know some state guarantors I worked with in the past agressively collected on judgement accounts.

[Cynic]

so if they do in fact sue, once a judgement is made, could i declare bankruptcy to eliminate it - since it would then be a judgement and no longer a student loan?

 

"Notwithstanding any other provision of statute . . . no limitation shall terminate the period within which suit may be filed, a judgment may be enforced, or an offset, garnishment, or other action initiated or taken," 20 U. S. C. §1091a(a)(2)

[LynnInMN]

so if they do in fact sue, once a judgement is made, could i declare bankruptcy to eliminate it - since it would then be a judgement and no longer a student loan?

 

"Notwithstanding any other provision of statute . . . no limitation shall terminate the period within which suit may be filed, a judgment may be enforced, or an offset, garnishment, or other action initiated or taken," 20 U. S. C. §1091a(a)(2)

 

Thank you Cynic! I knew I could depend on you to come up with the correct statutue!!