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  1. #1
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    Default Statute of Limitations on Private Student Loan

    My question involves collection proceedings in the State of: Michigan and/or New York

    I attended a private university in New York State from 2002-2005. Left before graduation due to family health emergency. My federal (Perkins, Sallie Mae) loans have already been repaid.

    In my last semester at school I took out a PRIVATE loan from a bank to pay my tuition. I've never made a payment on it. I probably won't be able to start making payments on it for another five years at least.

    I have lived in Michigan since late 2007.

    The bank first turned it over to a collection agency in March 2007. Since then a bunch of different collection agencies have passed it around.

    Here are my questions:

    1. I've been told there is a statute of limitations on the time the bank has to sue me in court and get a judgement. Are the statutes of limitations different for New York and Michigan?

    2. Which statute of limitations would apply to my loan, New York or Michigan? (And while I was in school in Ithaca, my actual home address was in Connecticut, where my family still lives.)

    3. When does the statute of limitations start running? Is it when the bank issued the loan, or when I missed the first payment? Or when the first collection agency got it? Or some other significant date?

    Thanks.

  2. #2
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    Default Re: Statute of Limitations on Private Student Loan

    The fact that it was private does not of itself tell us whether or not it was federally guaranteed, directly or through an approved guarantor. Please fill us in on that important detail.

  3. #3
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    Default Re: Statute of Limitations on Private Student Loan

    no. the loan is not federally guaranteed, not directly or indirectly.

  4. #4
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    Default Re: Statute of Limitations on Private Student Loan

    Statutes of limitation are different in every state. Statutes of limitation are normally treated as procedural, meaning that unless state law applies the foreign (out-of-state) statute of limitations via what is called a "borrowing statute", the local jurisdiction's limitations period applies. In most states that have borrowing statutes, the statute applies the shorter of the state's limitations period or, if the cause of action accrued before the defendant moved into the state, the other state's limitations period. There are also typically tolling provisions that extend the limitations period. So if you were sued in Michigan it will apply its six year limitations period unless New York has a shorter period that applies under Michigan's borrowing statute, but if you are sued in New York (where the loan and apparently cause of action originate) the limitations period may be tolled by virtue of your absence from the state. The limitations period on a loan normally runs from the later of (a) the date the money was borrowed, (b) the date the last payment was made, or (c) the due date for the first scheduled payment following the last payment actually made.

  5. #5
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    Default Re: Statute of Limitations on Private Student Loan

    Quote Quoting Mr. Knowitall
    View Post
    Statutes of limitation are different in every state. Statutes of limitation are normally treated as procedural, meaning that unless state law applies the foreign (out-of-state) statute of limitations via what is called a "borrowing statute", the local jurisdiction's limitations period applies. In most states that have borrowing statutes, the statute applies the shorter of the state's limitations period or, if the cause of action accrued before the defendant moved into the state, the other state's limitations period. There are also typically tolling provisions that extend the limitations period. So if you were sued in Michigan it will apply its six year limitations period unless New York has a shorter period that applies under Michigan's borrowing statute, but if you are sued in New York (where the loan and apparently cause of action originate) the limitations period may be tolled by virtue of your absence from the state. The limitations period on a loan normally runs from the later of (a) the date the money was borrowed, (b) the date the last payment was made, or (c) the due date for the first scheduled payment following the last payment actually made.

    Thanks. Do they have to sue me in MI where I live now? Or can they sue me in NY even though I don't live there any more? How does that work?

  6. #6
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    Default Re: Statute of Limitations on Private Student Loan

    They can sue you where you live. They may be able to sue you in New York if you have a legal address in that state, or if they find you and serve you in that state (even if during a visit); also, if they do not know you have moved it's possible that they will attempt to sue you based upon your last known address.

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