Student loan - Small claims - Help?

I filed a small claims suit in AZ against the grantor of my student loan (who happens to be in NH).

This was a fully paid student loan (paid in full in 1996) that was reporting as $0 - but rated so that it showed I was 120+ late with that zero amount! Doesn't matter that it was paid - it affected my scores and credit.

Asked for validation and received none. They didn't mark in dispute with CRA's, etc. Sent a letter (basically the 3 day intent to sue type of letter). They basically sent a nasty letter back telling me I had defaulted in February of 1989 and retaliated by updating with the CRA's with a more nasty notation. (marking it a defaulted student loan)

Upon looking up the special legislation for student loans - it turns out that (according to that law) that they should have removed the tradeline back in 1996!! The law states that they CAN report a student loan for longer than 7 years (no SOL basically) UNTIL it's paid. The date of last activity for student loans is 9 months plus 7 years from the default. What they basically did was to re-age it FROM the date I paid it on 5/96.

I filed a claim for this. They have filed a Motion to Dismiss based on lack of jurisction - and have also filed a Motion for Sanctions (asking for $500). (saying my suit is without merit and was only filed for harrassment).

They are saying that since they are an OC, not a CA - that I cannot file a claim against them for the FDCPA (I filed for both FDCAP and FCRA violations). They also state that I cannot bring an action in an AZ court.

Any thoughts? Since I've lived in AZ for more than three years and they've reported and made these violations while I lived in AZ - I feel I should be able to file in AZ.

Mommy2cats

 

Re: Student loan - Small claims - H

Yes, there is Special legislation (I'd have to look up the link). There really isn't an SOL on students with this - as they can continue reporting past seven years - until paid! Also, for the date of last activity - which is generally six months plus 7 years - they get an extra three months. This is for federal student loans.

Mommy2cats

 

Re: Student loan - Small claims - H

It says:

The 1998 Higher Education Reauthorization Act made several changes to the rules concerning student loans and helped clarify others. The significant changes include the following:

* Federally guaranteed student loans are no longer dischargeable in bankruptcy on the ground that payments first became due more than seven years past. The only basis on which you can discharge these loans in bankruptcy is that repayment would cause you undue hardship.
* A student loan that is in default will now be reported to credit bureaus until it is paid off, even if that takes more than seven years. This new law creates an exception to the Fair Credit Reporting Act, which states that negative information must come off a credit report after seven years.
* Loan rehabilitation -- that is, making 12 consecutive monthly payments to get out of default -- has been extended to include Perkins loans. Previously, loan rehabilitation applied only to FFELP or direct loans (including Stafford and PLUS loans).
* Under the old loan rehabilitation program, the guarantee agency had the discretion not to take the loan out of default and credit bureaus routinely refused to remove default notations after the borrower completed the 12 consecutive payments. Under the new regulations, the guarantee agency must return the loan to the original holder if the borrower insists (that is the act that will take the loan out of default) and credit bureaus must remove the default notation.
* Under the old rules, your loans were considered in default 180 days (six months) after you missed a payment. This period has been extended to 270 days (nine months).
* The new law creates a position called Student Loan Ombudsman to informally resolve complaints borrowers have with the Department of Education, lenders, guarantee agencies, colleges, loan servicers and other participants in the student loan program.
* The new law authorizes something called Voluntary Flexible Agreements, or VFAs. A guarantee agency will be able to submit an application to the Department of Education describing new and creative efforts it would like to undertake to work with borrowers in preventing default, making payments and collecting defaulted loans. If the Department of Education accepts the application and grants a VFA, the guarantee agency will be excused from complying with the other regulations. For years 1999, 2000 and 2001, the Department of Education can grant a maximum of six VFAs. The limit will be eliminated beginning in 2002.



Effective date: Jan 04, 2001

 

Re: Student loan - Small claims - H

Yeah, student loans can be a problem. I'd tell you to re-hab - that 12 payment thing. The good news is that you could change them to a positive tradeline. I couldnt' do anything with mine as it was paid. I wouldn't have minded if not for the re-aging and the negative CURRENT reporting.

Any one have any ideas/comments on my situation? Pretty please?

Mommy2cats

 

Re: Student loan - Small claims - H

Can anyone help me with a Motion? I put the facts in my post at the beginning of this thread. The Defendants are trying to Dismiss due to Lack of Juirisdction. They are also saying that I cannot file for FDCPA because they are an OC. and TRYING to get the Court to award $500 to them for my "harrasment" in filing the suit.

VERDE VALLEY PRECINCT, STATE OF ARIZONA
IN AND FOR THE
COUNTY OF YAVAPAI

MOMMY2CATS, PLAINTIFF
V.
NH HIGHER EDUCATION ASSISTANCE FOUNDATION, DEFENDANT

NOW COMES the Plaintiff, Pro Se and prays this Honorable Court to Deny the Defendant?s Motion to Dismiss and Motion for Sanction for the following reasons:

§ 618. Jurisdiction of courts; limitation of actions [15 U.S.C. § 1681p]
An action to enforce any liability created under this title may be brought in any appropriate United States district court without regard to the amount in controversy, or (in any other court of competent jurisdiction,) within two years from the date on which the liability arises, except that where a defendant has materially and willfully misrepresented any information required under this title to be disclosed to an individual and the information so misrepresented is material to the establishment of the defendant's liability to that individual under this title, the action may be brought at any time within two years after discovery by the individual of the misrepresentation.

Plaintiff believes that small claims court is a court of competent jurisdiction. The Defendant, as per their rights, moved to have this case moved to Civil Court.

As the Plaintiff was damaged while residing in Arizona, the Plaintiff asserts that this Honorable Court does have jurisdiction over this matter.

This case arose out of a Student Loan granted to the Plaintiff while Plaintiff resided in the State of New Hampshire, now presently residing in the State of Arizona for the past three years. According to a document from the Defendant (Exhibit A) this loan defaulted in February, 1989. The Plaintiff does not deny that she defaulted on this loan. The loan was paid in full in May of 1996.

The account should have been removed from the Plaintiff?s credit reports in November, 1996. As of the filing of Plaintiff?s Complaint on July, 2002, this account was still being reported on her credit reports.

According to Special Legislation:
The 1998 Higher Education Reauthorization Act made several changes to the rules concerning student loans and helped clarify others. The significant changes include the following:

· A student loan that is in default will now be reported to credit bureaus until it is paid off, even if that takes more than seven years. This new law creates an exception to the Fair Credit Reporting Act, which states that negative information must come off a credit report after seven years.

· Under the old rules, your loans were considered in default 180 days (six months) after you missed a payment. This period has been extended to 270 days (nine months).

The date of last activity is not calculated from the last payment, but from the default date. Therefore, since the loan defaulted in February of 1989, the date of last activity should have been (February plus nine months) November, 1989. The seven years would run from that date which would be November, 1996.
The Special Legislation does state that it can be reported longer than seven years if not paid. The Plaintiff did pay in May, 1996. Defendant used the date of May, 1996 as the date of last activity, clearly in violation of the law. Therefore, the Defendant re-aged this account making it report as a derogatory account for six years longer than lawful.

In addition to reporting the account SIX YEARS longer than lawful, the credit reporting for this account was also incorrect. Although the Defendants did mark this account as owing zero dollars, the Defendant?s reporting was done in such a manner that the Plaintiff was 120+ days CURRENTLY late on those zero dollars. This reporting affected Plaintiff?s FICO score as though it was a CURRENTLY derogatory account.

This inaccurate reporting damaged the Plaintiff?s ability to receive credit and advantageous interest rates.


Plaintiff disputed the credit reporting and the account. Defendant failed to provide any accounting for the account and failed to notify the credit bureaus of this fact. IN ADDITION, the Defendant placed a more derogatory notation on Plaintiff?s credit report.

The Defendant states in their Motion for Sanctions that this Complaint ?filing was without merit and intended merely to harass Defendant.? Plaintiff asserts that the above facts clearly demonstrate that her Complaint is not a matter of harassment, but rather an attempt to rectify an injustice.

 

Re: Student loan - Small claims - H

Thanks for the bump - I can really use help on this!

Mommy2cats

 

Re: Student loan - Small claims - H

That is true - it IS very vague language. For me - it's way past the 7 years - so I don't think it'll have any bearing on my case. But if I find anything out - you can BET I'll be glad to share.

Might be worth a shot for someone who files on a SL that has sue-able issues and is in that situation. Interesting....

Mommy2cats