The Statute of Limitations on National Collegiate Trust

Q: I took out a private student loan to cover a gap between student loans and expenses for my last year of college. It wasn’t a lot and I busted butt to pay off what I could, since it was at a higher interest rate. Then I was in a work-related accident that left me disabled in 2010. I was able to get my federal loans discharged, and I thought that National Collegiate Trust had given up. It’s been hard, waiting through the suit to go through the whole process, living on disability, and I was homeless at one point, but I ended up settling out of court this year.

Now here comes National Collegiate Trust again, and I’m being sued. I thought there was a statute of limitations on National Collegiate Trust debts?

A: I’m very sorry for what you’re going through. You’re entirely correct that there is a statute of limitations on debt, but it’s got a few loopholes that collectors use pretty routinely to keep that zombie debt moving. One tactic is getting the debtor to make payments on a time barred debt. Making a payment to head off a suit or further unpleasantness resets the debt clock, and when/if there’s another default they can prove that the debt is “alive.” The servicer can use some very unpleasant and sometimes illegal tactics to coerce you into making that payment, too. They’re counting on pressure and panic to put you in a spot before talking to an attorney and getting sound legal advice.

In Florida, the statute of limitations is five years for written contracts and promissory notes, four years for revolving or open-ended accounts (like credit cards) and oral contracts. You don’t say if you have a judgement from them, and I don’t know if they sued you previously and obtained a default judgment that they are using to press you for payment now. If they did, that’s enforceable for up to 20 years later, and the judgement can also be renewed after that for another decade. Without that judgement, the debt could fall under the statute of limitations and their collection attempts could violate the FDCPA. You have rights when it comes to an entity trying to collect from you, and there are shady players out there who not only break every rule on that page, but bust them to smithereens.

I’m sorry that this all sounds a little vague, but I can’t offer my best advice like this. I need to see you, talk with you one-on-one and have a chance to evaluate your situation with all the information on my desk. I can offer a free initial consultation in the Fort Lauderdale or West Palm Beach offices, and give you an idea of how to move forward on your own, or I can tell you what I can do to handle this. We specialize in the tough stuff, and think we can give you real help and lasting peace of mind. Give us a call!