Reboot Your Life: Tampa Student Loan and Bankruptcy Attorney Blog
How is it possible to wait too long to address student loan debt?
Right now, with the IDR recount working to forgive six figure debt for clients (yes, we are now seeing this occur – check your studentaid.gov site for your loan balance b/c servicers are running behind in getting the emails out), we strongly recommend that everyone with a FFEL or Perkins loan consider consolidating to a Direct loan. Do that now. If a lawsuit is filed that gains transaction to put a hold on the IDR recount, this relief may no longer be available. It really is a race against time for the IDR recount I fear.
But what should you do if you have a private student loan?
Today, we had to cancel a strategy session with a borrower because based upon our information, there was nothing left to do. He had a consent judgment from another state entered several years ago. That consent judgment was domesticated in Florida in May. Now his bank savings account was frozen. This is his emergency funds in case he lost his employment or suffered some calamity. There was more than enough money in there to cover this mid five figure judgment. He now wants to dispute the debt. Can he still dispute this, or is it too late?
The problem is that he consented to the judgment way back when. The time to dispute the debt would have been before that judgment was entered. He consented which means there isn’t even the opportunity to argue lack of service. A judgment extends the statute of limitations so that’s no longer a defense. Perhaps the judgment could have been negotiated — before a garnishment occurred. The bank will now file an answer stating how much it is holding per the garnishment order. The creditor will realize that the account holds more than is owed, and will not settle as it has already won and had the balance in full frozen. Plus all its costs.
Game over.
