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Hello, In 2006 and 2007 I took out 3 private student loans . The loans were deferred while I was a student and would then become due when I graduated or left school. I left part time status a few times throughout the years and obtained a forbearance a few times. I exhausted all my forbearance opportunities and then needed to begin making payments. I was never able to afford the payments – they would not budge any lower and the payments were over $1200 per month, and thus never made any payments. I had no choice but to let them go into default. They did go to default. A collections’ agency has my loans. They have tried contacting me by mail, but have not reached me by phone. I have not contacted them back. I am unable to afford the payments. I am also considering bankruptcy for other debt. I cannot afford for my bankruptcy attorney to initiate bankruptcy litigation in an attempt to possibly discharge the private loans. I can barely come up with the fee to pay my attorney for the bankruptcy. I recently read an article that stated that for PRIVATE student loans the statute starts running the date you are given the loan and that the statute of limitations runs out in 6 years (Maine’s statute of limitations) from either the day you got the loan or made the last payment. I never made a payment, just paid a forbearance fee a few times over the years. Does this mean that since it has been over 6 years since I took out my private student loan, that the statute of limitations has run and the ability for the lender to collect/file judgment against me is over? Does paying for a forbearance start the clock running over?
Thank you in advance for your help.
Mena
Does the forbearance fee count as a payment that would restart the statute of limitations?
Wow, great question.
I hope Heather comments since she is a lawyer and I am not, but…
Let me take a crack at it, for fun.
I assume you are referring to a loan originally held by Sallie Mae/Navient since they love their forbearance fees, yes?
SM/Navient only applies the forbearance fees to the account as a payment if the borrower “resumes a track record of on-time payments”
Since you never made any actual payments, I think we can assume that you did not meet the on-time payment requirements necessary for the fee to be applied as a good-faith payment.
In short, if the forbearance fee is not applied to your balance as a payment, then I don’t believe that it qualifies as a payment that would restart the the SOL.
That is my best guess.
Jan Miler
Student Loan Consultant
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The statute of limitations is a rule that sets a time limit within which a creditor may sue you for payment of a debt. The length of time that a creditor has to sue you on an unpaid debt varies from state to state. In some states, it’s four years. In other states, it might be longer.