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  1. #1

    Default Are Student Loans a Negotiable Instrument

    My question involves collection proceedings in the State of: CA

    Getting ready to go to trial and finally getting the P's attorney to respond and supply to my demand for BoP. Being genuinely confused about which loan they're trying to sue me on, I received some information today only after I submitted a motion to exclude evidence.

    My question now is that given that it doesn't specify on the promissory note that they sent me, whether this loan was a UCC Art 3 or Art 9, is my loan considered a negotiable instrument? Apparently the SoL for collections depends on whether the debt was a negotiable instrument. Most sources that I consulted indicates that student loans are not usually negotiable instruments.

    This is important because while there are other fact issues I need to research and dig out of my files, the statements that they provided clearly indicates that my default was past the SoL date of the suit filed, which is 4 years in CA.

    So to reiterate, are typical student loans considered a negotiable instrument?

  2. #2

    Default Re: Are Student Loans a Negotiable Instrument

    I am not sure, but I believe it is a negotiable instrument, but that would depend upon which type of student loan we are talking about.

    "the statements that they provided clearly indicates that my default was past the SoL date of the suit filed"
    You are confused about the statute of limitations. You calculate the statute of limitations from the date of default, not the day the note was signed.

  3. #3

    Default Re: Are Student Loans a Negotiable Instrument

    Quote Quoting doucar
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    I am not sure, but I believe it is a negotiable instrument, but that would depend upon which type of student loan we are talking about.

    "the statements that they provided clearly indicates that my default was past the SoL date of the suit filed"
    You are confused about the statute of limitations. You calculate the statute of limitations from the date of default, not the day the note was signed.
    No that's what I meant. SoL has run from the date of default, which is why I referenced the statement that they provided, because I no longer have these statements.

    From a few cases and sources it seem that most student loans are not negotiable instruments. My understanding of a negotiable instrument is akin to a check, or IOU, payable on a certain date. Student loans are typically open accounts that is paid in installments that is not calculated at the loan origination. Please let me know if you have any sources that indicate otherwise. I believe this is why there was a lack of consensus and subsequent determination that mortgages are negotiable instruments.

    Furthermore, the P's complaint sets out a factual claim that refers to 4 years, meaning it's going by the standard 4 year SoL on CA contracts.

  4. #4
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    Default Re: Are Student Loans a Negotiable Instrument

    Quote Quoting apersonfrom80
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    So to reiterate, are typical student loans considered a negotiable instrument?
    If you execute a promissory note as part of the loan package, that promissory note may be a negotiable instrument. You'd need to look at the terms of the note to determine that.

  5. #5
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    Default Re: Are Student Loans a Negotiable Instrument

    Quote Quoting apersonfrom80
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    My question now is that given that it doesn't specify on the promissory note that they sent me, whether this loan was a UCC Art 3 or Art 9, is my loan considered a negotiable instrument? Apparently the SoL for collections depends on whether the debt was a negotiable instrument. Most sources that I consulted indicates that student loans are not usually negotiable instruments.

    So to reiterate, are typical student loans considered a negotiable instrument?
    I don't think so.

    Here is the definition of "negotiable instrument" in the CA Commercial Code Section 3104:

    https://leginfo.legislature.ca.gov/f...1.&lawCode=COM

    Subsequent sections what is not a negotiable instrument.

    I could be wrong but I don't see a student loan falling into that category. And if it did fall into that category Section 3118 gives the holder 6 years to commence an action to enforce the note.

    If it's not a negotiable instrument you're back to the 4 year limit specified in California Code of Civil Procedure Section 337:

    http://leginfo.legislature.ca.gov/fa...er=3.&article=

    As for the rest of your posts I'm confused about who is claiming what.

    Is the plaintiff claiming that it's a negotiable instrument and that the lawsuit is within the 6 year limit or are you claiming that it's not a negotiable instrument and that the plaintiff's lawsuit is time barred because of the 4 year limit on contracts?

  6. #6
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    Default Re: Are Student Loans a Negotiable Instrument

    Quote Quoting adjusterjack
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    I
    I could be wrong but I don't see a student loan falling into that category.
    The student loan itself would not be negotiable instrument. But if there is a promissory note executed in conjunction with the loan that promissory note may be a negotiable instrument.

  7. #7
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    Default Re: Are Student Loans a Negotiable Instrument

    Quote Quoting Taxing Matters
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    The student loan itself would not be negotiable instrument. But if there is a promissory note executed in conjunction with the loan that promissory note may be a negotiable instrument.
    Understood. But it still begs the question of which end of the argument the defendant is on.

    It doesn't appear to help OP if a negotiable instrument gives the plaintiff 6 years to commence an action.

  8. #8
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    Default Re: Are Student Loans a Negotiable Instrument

    How do I know if my student loan is federal or private?
    The best way of determining whether loans are federal or private is to log in to the National Student Loan Database, at www.nslds.ed.gov. The Department of Ed. makes it clear that only individual borrowers are allowed to log into this site, not third party companies or financial advisors.

  9. #9
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    Default Re: Are Student Loans a Negotiable Instrument

    Quote Quoting kamila25
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    How do I know if my student loan is federal or private?
    The best way of determining whether loans are federal or private is to log in to the National Student Loan Database, at www.nslds.ed.gov. The Department of Ed. makes it clear that only individual borrowers are allowed to log into this site, not third party companies or financial advisors.
    Don't tag questions onto old posts. Start your own thread.

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