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  1. #1
    Join Date
    Jan 2016
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    2

    Default Collection of a Private Student Loan Where the Creditor Can't Find a Promissory Note

    My question involves collection proceedings in the State of: New York

    Hello, I took out private (non-federally backed) student loans in 2007 with My Rich Uncle (Education Empowerment Fund). The company went bankrupt in 2009 due to shady practices, and a company called Younomics took over their debt. https://en.wikipedia.org/wiki/MyRichUncle

    I've been timely in payments since 2011, but my husband looked into it and realized I was paying a 10.25% in interest. I never remember signing a promissory note for that high of a rate. (I've since moved and can not find the original loan paperwork) Their only form of communication with borrowers is through email. (there's no number for them online anywhere) I requested all original paperwork with My Rich Uncle through email, and they replied all documents would be mailed. I've been waiting and still nothing sent. My husband says we're not paying until we can get the original documents. Also, I did some research and NY has a student Bill of Rights, and my rights have been violated http://assembly.state.ny.us/member_files/047/20071109/

    My questions:
    Can a company change the interest rate without my consent and still collect repayment?
    What if they can't produce the promissory note I signed with the original company? Can I still be liable for the loans?
    What will happen if I stop paying completely? Other than my credit, what's their recourse against me?
    Since these are private loans, after the statute of imitations are up, what are possible consequences?

    Any info will be high appreciated. Thanks!!

  2. #2
    Join Date
    Mar 2013
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    18,340

    Default Re: Student Loan Interest Change, No Promissory Note-Am I Still on the Hook

    Quote Quoting mrsjreine5
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    Can a company change the interest rate without my consent and still collect repayment?
    You don't know if that's what the company is doing because you lost your paperwork.

    Quote Quoting mrsjreine5
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    What if they can't produce the promissory note I signed with the original company? Can I still be liable for the loans?
    Yes.

    By the way, they probably don't have to produce anything unless it's in a court of law.

    Quote Quoting mrsjreine5
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    What will happen if I stop paying completely? Other than my credit, what's their recourse against me?
    Lawsuit, judgment, lien on your home, wage garnishment, bank account levy, execution against non-exempt property.

    Quote Quoting mrsjreine5
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    Since these are private loans, after the statute of imitations are up, what are possible consequences?
    The SOL in NY is 6 years. If you can hold them off for 6 years without getting sued then there are no consequences.

    Quote Quoting mrsjreine5
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    Also, I did some research and NY has a student Bill of Rights, and my rights have been violated http://assembly.state.ny.us/member_files/047/20071109/
    Which right is that, exactly?

  3. #3
    Join Date
    Jan 2016
    Posts
    2

    Default Re: Student Loan Interest Change, No Promissory Note-Am I Still on the Hook

    Quote Quoting adjusterjack
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    You don't know if that's what the company is doing because you lost your paperwork.

    Thanks so much for replying! I know I don't have the exact figures, but let's say they did change the interest rate. Is that legal?



    Which right is that, exactly?
    The right to know if a lender has agreed to sell its loans to another lender. I got this from here: http://assembly.state.ny.us/member_files/047/20071109/

  4. #4
    Join Date
    Mar 2013
    Posts
    18,340

    Default Re: Student Loan Interest Change, No Promissory Note-Am I Still on the Hook

    I find nothing in SLATE that gives you that right. Here's the full statute:

    http://law.justia.com/codes/new-york.../article-13-b/

    As for that website, all I see is that you had the right to ask all those question before you borrowed the money and you had the right to decline to borrow the money if you didn't get satisfactory answers.

    The "Student Bill of Rights" is just common sense precautions that everybody should take before borrowing money. I don't think any of it is statutory but you can email that assemblyman and ask him to cite you the statutes where those "rights" are specified.

    Beyond that, a lender's right to sell its loans is typically specified in the loan contract which means you had notice of that possibility when you borrowed the money.

    I don't think that the lender has done anything wrong to you and I strongly suggest that you continue to make your payments until you find out if the lender has actually broken any LAW or breached any part of your loan contract.

    In an effort to help you I did some research online for historical data on private student loan interest rates. I found that federally guaranteed loan rates in 2007 were almost 7% which would lead me to conclude that private loans could be much higher.

    http://www.nerdwallet.com/blog/loans...meline-events/

    I could not find similar date on non-guaranteed private student loans but I came across an article dated June 2007 that reported that one borrower was paying as much as 13% on her private student loans, another student got an adjustable rate loan starting at 9.22, yet another student paying 18%. The article also indicated that interest rates could be as high as 20%.

    Here's the article:

    http://www.nytimes.com/2007/06/10/us/10loans.html?_r=0

    This was apparently the state of affairs just before Cuomo started cracking down on the private lenders and passed the SLATE Act.

    Given the revelations in that article, it's quite possible that you took out loans at 10.25% interest.

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