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I Paid a Credit Repair Place to Remove My Student Loans But They Are Coming After Me

By on May 4, 2018

Question:

Dear Steve,

I took out student loans 2000-2005 and began paying them after graduation until I lost my job. The loan holders would not offer me a lower rate so I stopped paying and haven’t paid since about 2007. I worked with a credit counselor to clear my credit report, this is what he said:

“When we challenged any and all items on your credit report that affected your scores, we referenced the FCRA laws (Fair Credit Reporting Act). The credit reporting agencies are required to give each creditor a 30-day window to verify the debt, the accuracy, and the reporting. If the 30 days pass, and the creditor has not done all 3 things, then the credit bureau MUST remove the item permanently and it can NEVER be added to the credit report again. No company would ever be foolish enough to remove and item disputed by Federal laws governing FCRA, then add it back on to the report. There are serious fines for every infraction that would occur. Know and feel comfortable Christina that those items should never come back again. I hope that helps.”

I have had a Federal Tax Return Garnish for a few years, last year I had a random wage garnishment that stopped after a few months and now I received a letter from MOHELA for 3 loans that I owe totaling $38000 principal + interest. I looked up my Federal Loans on NSLDS and they did not appear on there so I think they are private and may be beyond the statute of limitations.

What can I do here? A) How do I clear this up if the credit counselor guy was right and the statute of limitations apply? B) How do I negotiate a lower amount (remove interest, etc) if needed? C) IF I begin paying MOHELA, will other outstanding loans find out and come after me?

Christina

Answer:

Dear Christina,

Removing an item from a credit report has no impact on if the debt is collectible or not. And as far as if a debt removed could be relisted that person you hired was what I like to call WRONG.

According to the Fair Credit Reporting Act 15 U.S. Code § 1681i – Procedure in case of disputed accuracy any creditor can report a removed item again. “Information may not be reinserted in the file by the consumer reporting agency unless the person who furnishes the information certifies that the information is complete and accurate.” So all they have to do is certify the accuracy and relist it.

As far as the Statute of Limitations goes, it does not prevent you from being sued, it’s something you can raise in your defense about why the suit should be dropped.

On your garnishments, it sounds like what you need is more information. Typically, for non-federal student loans, the credit report is a good place to go and see who is reporting they have your loans. But those seem to have been removed.

If you are being garnished for non-federal student loan debt you would have had to have been sued first, lost, and then the garnishment issued.

Frankly, it sounds like you can use some help to sort all of this out. Looking for a debt coach who can help dig to the bottom of this and develop a plan of action based on the reality of the situation would be a smart move.

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About Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

2 Comments

  1. Christina

    May 4, 2018 at 4:43 pm

    Thank you for your answer! I’m also grateful that this is on the web now to illustrate how everyone has a different answer in this confusing journey through student loans.

  2. Christina

    May 4, 2018 at 11:11 am

    Asked credit repair question.

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