Student Loans Different Collections Rules

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					Student loans are a different kind of debt. These loans are unsecured, which means they were given out on good

faith that they will be paid back. When applying for school loans, the borrower is essentially asking for money in

order to pursue their higher education with the promise that once finished with school, and after a set number of

months to find a job, payments will begin. Most people who are looking for a way into into colleges and

universities are not thinking about all the difficulties or possible causes for this type of loan to be a hardship.

Student loan debt is something that will never go away on its own. Only in rare circumstances will a student loan

be forgiven, even bankruptcy will not bring relief to this debt.

Why are student loans so different?

For starters, the funding behind your loan is from the government. These loans are not affiliated with any bank

and therefore are not subject to the same collections rules. There are similar ways in which each can go about

collecting the money owed, but the Department of Education, which funds these loans, have an unlimited amount

of time to collect.

Regular bank loans and credit card debt have a statute of limitations. Depending on the state you live, these

creditors will have a certain amount of time to try to get their money back. This time period is usually 7 years, but

some states differ. Once the time limit is up, there can be no more attempts to collect the money. Student loans

do not have a statute of limitations. In other words, the Department of Education can continue to attempt to

collect on your loan until it is paid off.

The creditor will usually make attempts to collect on unpaid loans for a few months and then use an outside

collections agency to continue the process. Some companies will have their own inside collections departments

who will try for a longer period of time before it processes out to a third party. The Department of Education does

not always use third party collections, but when they do, the outsourced party earns more money per dollar

collected from these loans and have been known to be more assertive with their collection attempts. No matter

what creditor is behind your debt, the collections agencies are governed by the same Fair Debt Collections

practices Act. This guidance protects consumers' rights. No one may threaten, mislead, or harass as a means to

collect debt. If you ask them to stop calling your work, they must comply. Collectors are not allowed to

deliberately embarrass as a collections practice. Know your rights when it comes to third party collections. Report

agencies who are not following proper procedures.

Creditors do have the right to take you to court to get a judgement which would allow them to place a lien on

property, garnish your wages, or freeze your bank accounts.

Filing for bankruptcy will help a person find relief with debt... but not with student loan debt. Only under rare

conditions, for example, being totally and permanently disabled would a student loan be excused.

In addition to other collections practices, the Department of Education can take money from your tax return,

Social Security payments or garnish your wages to begin collecting on your debt. Since there is no statute of

limitations procedures will continue to happen until your debt is paid in full.
You can dispute your student loan obligation. The Department of Education has extremely limited legitimate

reasons to comply with your request. You may dispute your obligation by proving extreme hardship, theft of

identity, promissory note was not signed, or if the debt was all ready settled in another way. There are also rare

instances that could also allow you to be forgiven.

To dispute the loan amount or to claim financial hardship there will be legal work involved. Hiring a collection

attorney to work with your student loan debt will be the best possible avenue to assist you under these


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