My mom went through a nasty divorce shortly after she retired in 2003. At the time I helped repair her credit and when they went to sell the house we had her credit reports and paid any of the jointly held legitimate debt off as this would be her only income and way of doing it.
My father moved away and never paid another bill in his life. He passed away in Nov 2005. All of a sudden a PLUS loan that was originally taken out in 1994 shows up on my moms credit report as 180+ days past due.
As she is having to move due to a loss of job this is a huge blow to her credit rating. I spent over a year cleaning it all up only to have this surface.
What should we do. Dispute then validate? My guess is that they kept sending bills to my father who had no means of paying them as he was dying and unemployed- then after all this time declare it defaulted and put it on my mooms credit report. This particular loan was never on her reports in 2003-2004 when we pulled the last report.
Any advice would be greatly appreciated as I have to help get her score back up so she can secure another apartment.
Thanks
Mara
Full Version: 1994 PLUS loan shows up out of the blue
QUOTE(eeyorefanatic @ Sep 27 2006, 10:29 AM) 
My mom went through a nasty divorce shortly after she retired in 2003. At the time I helped repair her credit and when they went to sell the house we had her credit reports and paid any of the jointly held legitimate debt off as this would be her only income and way of doing it.
My father moved away and never paid another bill in his life. He passed away in Nov 2005. All of a sudden a PLUS loan that was originally taken out in 1994 shows up on my moms credit report as 180+ days past due.
PLUS loans become due 60 days after borrowed. They are also borrower specific. Usually it is only one parent that signs for this loan...it is not transfered from spouse to spouse. It is quite possible she defaulted withing the year and then the 7 year SOL reporting ran out.
As she is having to move due to a loss of job this is a huge blow to her credit rating. I spent over a year cleaning it all up only to have this surface.
What should we do. Dispute then validate? My guess is that they kept sending bills to my father who had no means of paying them as he was dying and unemployed- then after all this time declare it defaulted and put it on my mooms credit report. This particular loan was never on her reports in 2003-2004 when we pulled the last report.
Who is reporting it now?? There is a good possiblity that this loan has been subrogated due to age which would be starting the reporting cycle all over again. They will validate.
Any advice would be greatly appreciated as I have to help get her score back up so she can secure another apartment.
Thanks
Mara
My father moved away and never paid another bill in his life. He passed away in Nov 2005. All of a sudden a PLUS loan that was originally taken out in 1994 shows up on my moms credit report as 180+ days past due.
PLUS loans become due 60 days after borrowed. They are also borrower specific. Usually it is only one parent that signs for this loan...it is not transfered from spouse to spouse. It is quite possible she defaulted withing the year and then the 7 year SOL reporting ran out.
As she is having to move due to a loss of job this is a huge blow to her credit rating. I spent over a year cleaning it all up only to have this surface.
What should we do. Dispute then validate? My guess is that they kept sending bills to my father who had no means of paying them as he was dying and unemployed- then after all this time declare it defaulted and put it on my mooms credit report. This particular loan was never on her reports in 2003-2004 when we pulled the last report.
Who is reporting it now?? There is a good possiblity that this loan has been subrogated due to age which would be starting the reporting cycle all over again. They will validate.
Any advice would be greatly appreciated as I have to help get her score back up so she can secure another apartment.
Thanks
Mara
Lynn, thanks for the reposne
They had been paying this from 1994-2003 when they were divorced and my guess is they were billing my dad. This has never appeared on my moms credit report so it may just be in my dad's name? How would we find out? Of course they are now saying it's my moms responsibility but it's enver shown up before now- nor has she been billed from 2003-now. What can we ask of them to show who signed for it?
They had been paying this from 1994-2003 when they were divorced and my guess is they were billing my dad. This has never appeared on my moms credit report so it may just be in my dad's name? How would we find out? Of course they are now saying it's my moms responsibility but it's enver shown up before now- nor has she been billed from 2003-now. What can we ask of them to show who signed for it?
QUOTE(eeyorefanatic @ Sep 27 2006, 11:08 AM)
Lynn, thanks for the reposne
They had been paying this from 1994-2003 when they were divorced and my guess is they were billing my dad. This has never appeared on my moms credit report so it may just be in my dad's name? How would we find out? Of course they are now saying it's my moms responsibility but it's enver shown up before now- nor has she been billed from 2003-now. What can we ask of them to show who signed for it?
They had been paying this from 1994-2003 when they were divorced and my guess is they were billing my dad. This has never appeared on my moms credit report so it may just be in my dad's name? How would we find out? Of course they are now saying it's my moms responsibility but it's enver shown up before now- nor has she been billed from 2003-now. What can we ask of them to show who signed for it?
Did she sign for it?? Cosign?? Again these loans are borrower specific and unless she signed on the dotted line, they would not be going after her for it. If she signed for it, she is legally responsible for it, regardless of whether or not she has been billed or appeared on her CR. It is now in default which comes legal ramifications including wage garnishment, so she needs to call. She can request a copy of the prom note.
QUOTE(LynnInMN @ Sep 27 2006, 12:16 PM)
Did she sign for it?? Cosign?? Again these loans are borrower specific and unless she signed on the dotted line, they would not be going after her for it. If she signed for it, she is legally responsible for it, regardless of whether or not she has been billed or appeared on her CR. It is now in default which comes legal ramifications including wage garnishment, so she needs to call. She can request a copy of the prom note.
Im not sure she may have cosigned it. Im not saying that she may not owe the money- I am furious that they NOW choose to begin reporting it after 16 years. If they had done their job in reporting it it would have been paid in full when the house was sold. Now there is no way for her to afford a payment of more than like $50/month and even that is pushing it. I am just trying to help my mom out of a horrible situation as she HAS to move and we worked so hard to get her credit all cleaned up after my idiot of a father tanked it. She has no income other than a social security and needed a good score to pass a credit check at an apartment place.
Im just angry at how they handled it. I thought these forums were for people to go to for help with errors in reporting. I think not reporting something for 16 years and not billing someone would be valid reasons to have this taken off her report. I also didn't think you could just re-age something to get around the 7 year limitation.
She needs to get in touch with the lender find out the details. When it defaulted is important. Did the lender have a current mailing address?
From the DOE site
Defense of Laches (Unreasonable and harmful delay in demanding payment)
Because default on a publicly-financed debt, such as student loan or grant obligation, harms the taxpayer, Federal law precludes the debtor from avoiding repayment by claiming that the debt should not be enforced because of delays in demanding its repayment. Moreover, where the debt is a student loan, the borrower has agreed in the note to apprise the holder of the loan of his or her current address. Thus, a claim that the debt, or interest owed on the debt, should not be enforceable because of delays in demanding payment is also barred because the borrower, not the lender or the Department, was legally obligated to notify the holder of his or her correct address.
She needs to do something. Since this is a federal debt, Social Security income is garnishable.
From the DOE site
Defense of Laches (Unreasonable and harmful delay in demanding payment)
Because default on a publicly-financed debt, such as student loan or grant obligation, harms the taxpayer, Federal law precludes the debtor from avoiding repayment by claiming that the debt should not be enforced because of delays in demanding its repayment. Moreover, where the debt is a student loan, the borrower has agreed in the note to apprise the holder of the loan of his or her current address. Thus, a claim that the debt, or interest owed on the debt, should not be enforceable because of delays in demanding payment is also barred because the borrower, not the lender or the Department, was legally obligated to notify the holder of his or her correct address.
She needs to do something. Since this is a federal debt, Social Security income is garnishable.
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