Hello everyone. A friend of mine was going to a college 10 years ago. She dropped out at the time because she became pregnant and could not attend.

The college apparently has hired a collection agency claiming that she owes nine thousand dollars. The origination of this... amount, would be from 10 years ago. It is not, to her knowledge a student loan... She has had no notification at all from any agency or government entity or loan agency... (her college loans are from the government, I'm not sure how that would work) And up until this weekend she has never been noticed as to this outstanding debt.

My thought process is that in New Jersey if the statute of limitations is 6 years or from the date of the last activity on the account, then this is a fraudulent claim on the part of the college or agency.

I hope I'm being clear.

Hello everyone. A friend of mine was going to a college 10 years ago. She dropped out at the time because she became pregnant and could not attend.

The college apparently has hired a collection agency claiming that she owes nine thousand dollars. The origination of this ... amount, would be from 10 years ago. It is not, to her knowledge a student loan... She has had no notification at all from any agency or government entity or loan agency ... (her college loans are from the government, I'm not sure how that would work) And up until this weekend she has never been noticed as to this outstanding debt.

My thought process is that in New Jersey if the statute of limitations is 6 years or from the date of the last activity on the account, then this is a fraudulent claim on the part of the college or agency.

I hope I'm being clear.



Government student loans live on forever. They cannot be discharged in bankruptcy and an exception to the garnishment rule - she has to find her paperwork and see what the terms were. I'm a little confused by your statements that she got Government loans but not student loans.

Did she pay the loan or drop out and stop paying?

First this is not fraudulent in any way, shape or form. Even if the SOL has expired, that doesn't preclude them from collecting on the debt. A debt never expires.

What she needs to do is ask the agency for validation of the debt. Proof of the nature of the debt and that she incurred it.

Once that is received she can go on from there.

I'm not sure if this was a government loan or how it was set up. I just emailed her and asked her to reply to me so I could cut and paste her response here.

As to Scott's reply, I found a letter online that goes as follows:

I am writing pursuant to the Fair Debt Collection Practices Act, 15 USC 1692g, to inform you that I dispute the alleged debt associated with the above referenced account and creditor. I do not believe that I owe the amount alleged by you.
Your Notice of September 16, 2008, which was received by me on October 4, 2008, was the first time I have heard from you about this alleged debt. Thus I am requesting that you provide the following information:
• Please explain the nature of the alleged debt - that is, what the money I allegedly owe is for;
• Please provide an accounting explaining how you calculated what you allege that I owe;
• Please provide me with copies of any contracts or documents which form a basis for the alleged debt; and
• Please provide me with the name and address of the original creditor.
I further request that you take the following actions:
1. Please contact any credit agencies to whom you have reported this alleged debt, and inform them that I am disputing the debt; and
2. Please also forward a copy of this letter to the creditor who alleges that I owe the debt at issue, and inform them that I am disputing the debt.
Except as specifically outlined herein, I am requesting that you cease all contact with me about the alleged debt. Any further contact should be strictly in conformity with the FDCPA: It should be limited to providing me with the documentation requested in this letter, informing me that you have ceased collection efforts on the alleged debt, or stating that you are taking a specific action in relation to the debt such as commencing a collection lawsuit. Any further contact should be made in writing, and should be submitted to my home address by mail.

END.

This should at least get her the who, what, when and where. She has no idea when it originated. She... does have student loans "now" which she is aware of but the last time she attended this particular college was 10 years ago and she hasn't heard anything from them directly from when she was 18 and dropped out due to becoming pregnant. She is now 29... so, it's been that long.

I hope you all see this response. This was her reply to my inquiry as to the type of loan it could have been.

START:

If I applied for anything at that time it would have been financial aid. There was no government/student loans taken out from what I can remember. Otherwise It would show up on my current student loan balance. When you take out a student loan the school is paid and you owe the government or bank not the school. The notice is saying that I owe the college is saying I owe THEM this money. In the past almost 10 years I have not received anything from them stating that I had a balance with them.

Its possible she was granted financial aid that was contingent on her completing the sememster. By dropping out she became liable for the aid.

Why they have waited so long to pursue could be due to a number of factors.

But that request for info is right on.

First this is not fraudulent in any way, shape or form. Even if the SOL has expired, that doesn't preclude them from collecting on the debt. A debt never expires.

What she needs to do is ask the agency for validation of the debt. Proof of the nature of the debt and that she incurred it.

Once that is received she can go on from there.

I am a little confused by Scott's response. I had some links here as to statutes of limitations and in New Jersey they stated as follows:


New Jersey Statutes of Limitation
Conversion of an instrument for money: 3 years, (N.J.S.A.12A: 3-118(g)).

Sale of goods under the UCC: 4-years, (N.J.S.A. 12A; 2-725).

Real or personal property damage, recovery and contracts not under seal: 6 years (N.J.S.A. 2A: 14-1).

Demand Notes when no demand is made: 10 years. If demand made: 6 years from date of demand, (12A: 3-118(b)).

Obligations under seal for the payment of money only, except bank, merchant, finance company or other financial institution: 16 years, (N.J.S.A. 2A: 14-4) actions for unpaid rent if lease agreement is under seal, (N.J.S.A. 2A: 14-4).

Real estate: 20 years, (N.J.S.A. 2A: 14-7); Judgments: 20 years, renewable, (2A: 14-5); Foreign judgments: 20 years (unless period in originating jurisdiction is less), (2A: 14- 5).

Unaccepted drafts: 3 years from date of dishonor or 10 years from date of draft, whichever expires first, (12A: 3- 118(c)).

So I'm a bit unclear as to which one would be applicable and/or why they would not. This young lady hasn't attended this school in quite some time so it's a huge surprise to her.

Thank you so much for your input.

Its possible she was granted financial aid that was contingent on her completing the sememster. By dropping out she became liable for the aid.

Why they have waited so long to pursue could be due to a number of factors.

But that request for info is right on.

Hi Scott,

You know, I asked her this question this morning if she was perhaps liable for the funds even though she did not complete the semester. So she would be liable for this personally is what you are saying? If she dropped out there may have been a contingency in her papers that said she became personally liable for this debt/loan personally if she didn't complete it... She'd have to get a copy of these documents.

Should I advise her to contact the school directly? Or wait for the collection company to process the request for validation and information as to this loan? (Thank you... )

Thank you so much for advising that the request is right on.

I see no confussing issue with scott,

The collection company may even after the SOL, attempt to collect a debt for as long as the person is alive, the SOL merely stops them from going to court for a judgement, it does not stop receiving bills, or phone calls and the such.

I see no confussing issue with scott,

The collection company may even after the SOL, attempt to collect a debt for as long as the person is alive, the SOL merely stops them from going to court for a judgement, it does not stop recieving bills, or phone calls and the such.

Hello Chuck, thank you for your response. This is the clarity I was looking for... So, the statute of limitations only bars suit and judgment proceedings. NOT collection practice...

This is what I was missing is Scott's reply. It wasn't that I didn't believe him (for saying so's sake) it was clarity as to why the statutes were in place and the guidelines that come with it. I understand... thank you so much...

Generally, once a debt is turned over to a collection agency, the original debtor will refer all correspondence to the agency. So wait until she gets a response before going further.

I can't tell you what SOL will apply without knowing the nature of the debt. But I think you misunderstand what an SOL is. As Chuck noted, an SOL simply defines a time frame wherein the creditor can use legal means to collect the debt. This means filing suit in court. Since the collector has not filed suit, there is no SOL issue at this time. But a debt NEVER expires. A creditor has the right to attempt to collect that debt as long as the debtor is living (and even then, they can go after the estate). The SOL just limits the tools they can use to attempt to collect. That's why there is no fraud involved.

For the record, I think it's wonderful that you all help like you do. :)

Sincerely.

Generally, once a debt is turned over to a collection agency, the original debtor will refer all correspondence to the agency. So wait until she gets a response before going further.

I can't tell you what SOL will apply without knowing the nature of the debt. But I think you misunderstand what an SOL is. As Chuck noted, an SOL simply defines a time frame wherein the creditor can use legal means to collect the debt. This means filing suit in court. Since the collector has not filed suit, there is no SOL issue at this time. But a debt NEVER expires. A creditor has the right to attempt to collect that debt as long as the debtor is living (and even then, they can go after the estate). The SOL just limits the tools they can use to attempt to collect. That's why there is no fraud involved.


I understand. I understand the principles of the SOL, however I was unaware that collection actions could still take place even after the sol ran.

I see what you're saying. Thank you so much. So, we will mail out her letter and await their response. My only last question would be should we send it regular and certified mail. I'm going to tell her to do both. This way her behind is covered :)

I understand. I understand the principles of the SOL, however I was unaware that collection actions could still take place even after the sol ran.

I see what you're saying. Thank you so much. So, we will mail out her letter and await their response. My only last question would be should we send it regular and certified mail. I'm going to tell her to do both. This way her behind is covered :)



I would send ALL mail receipt requested -

I would send ALL mail receipt requested -

I agree with you Judy, I just actually emailed her and advised her to do so. Thank you.