Did the Private Student Loans Vanish Under the Statute of Limitations?


Dear Steve,

My husband has some private student loans which were taken out in 2002 and his mother cosigned on them. She has made payments at some point on this loan, although I have no idea when or how much. It has now grown to $101,000.

Living in Florida, I am familiar with the statute of limitations law. In October of 2015, all 101,000 vanished from his credit karma account. Fast forward to April of 2016. We pulled his credit report and these loans are still nowhere to be found. I’m assuming this happened because the statute of limitations has passed and it has been 7 years so it has fallen off of his credit. However, I do know she has made a payment within those 7 years. Just trying to figure out if we need to find a way to pay the ridiculously high amount they are asking for, or if we should just consider this a zombie debt.

Does the clock for statute of limitations start after the first missed payment? Even if other payments were made afterward. We are talking interest only payments, not full payments.

How do I find out if the loans have met the statute of limitations?

Should I assume they are already past the statute of limitations considering they are gone from his credit report?



Dear Amber,

Well you’ve wandered into some interesting waters, and murky water at that.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

The statute of limitations neither prevents a lender from suing or attempting to collect on a debt. It can be raised as a defense in the event someone is sued over old debt.

The kicker here is any payment or acknowledgement of the debt can restart the clock on the old debt. So if it has been five years and a new payment is made, the timing starts all over again. The clock is typically measured from the last time the account did not have a payment and/or was delinquent.

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Your questions and situation are begging for a review by an attorney who is licensed in Florida. Only they can give you a definitive answer to your specific situation.

You also need to keep in mind that just because a debt does not appear on a credit report does not mean the debt has been forgiven.

If the debt is forgiven, the loan holders should expect to receive a 1099-C tax document on the forgiven debt and if they are not insolvent then income tax will be due on the forgiven debt.

The best thing you can do is pay for a consultation with a Florida licensed attorney.

Damon Day - Pro Debt Coach

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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.
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