Defaulting on a loan can adversely affect credit for many years. Default typically occurs when a loan receives no payment for 270 days. The loan leaves repayment status and is due in full when the lender requests. New collection costs are added to the loan's balance and the loan becomes drastically more expensive or eliminated through negotiation or legal action.
In addition, the IRS can take the borrower's income tax refund until the defaulted loan is paid in full. This is a popular way of collecting on loan debt, and the Department of Education collects hundreds of millions of dollars this way.To object, a written statement must be presented within 65 days of the IRS' notice, and must give evidence of any of the following:
|The loan has been repaid.|
|Payments have been made under a negotiated repayment, or a cancellation, deferment or forbearance has been granted.|
| The borrower has filed for bankruptcy.|
|The borrower is totally and permanently disabled.|
|The loan in question is not the borrower's loan.|
|The borrower dropped out of school and the school owes a refund.|
| The borrower Attended a trade school and the school closed.|
| The school falsely certified the browser as being eligible for a loan.|
Defaulting on student loans can also end in a lawsuit. The government and private lenders can sue in order to collect on loans. There is no time limit on suing to collect on federal student loans, and the borrower can be sued indefinitely. Private student loans, in most cases, are subject to statute of limitations laws depending on the state.
Please call 718-395-7567 to see how Credit Servicez can help you with your student loan issues!