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chloeinontario
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Joined: 19/September/2014
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Topic: Help! Bank wrote off OLD loan, now in collections Posted: 19/September/2014 at 8:36am |
To put the question first, what can a collections agency actually do to me, and my credit rating, now that they are trying to collect on a loan that the bank wrote off in 2007 and now wants a settlement for? The background…. A collections agency contacted me yesterday (Sept 18, 2014) about old Ontario student loans (circa 1992-1998). The file was given to them from an Ontario bank earlier this month. After talking to the collections agency, I called the bank’s collections and spoke at length with one of their reps. He said the bank had written off the loan (at the time it was about $20,000) in Oct. 2007. But recently, he said the bank completed a project to uncover these kinds of loans that they deem to be just and "collectable", and my file was one of them. The amount has grown to sit at over $30,000 allegedly owing. I had claimed bankruptcy in about 2003/4. Apparently the trustee had not sent my discharge to the Bank to start the process of resuming payments on this non-secured portion of my student loan after my discharge. The Bank said it never got my discharge paperwork and therefore never contacted me ….in over 10 years. I saw a few years ago that the student loan from the Bank was called “written off” on my credit report and assumed all was taken care of. (To be clear, the federal and provincial portions of my loans were paid back after the bankruptcy.) The rep was clear the Bank could not legally pursue me for the money/take me to court/garnish my wages, etc. But said that if I do not make a deal with them (“come to a settlement agreement”), it would stay in collections with the collections agency…possibly for years. And of course they mentioned this would be a problem for securing future credit. But also the Bank Rep mentioned that 7 years from when they wrote off the loan (Oct 2007) brings us to next month. But then I wasn’t clear if that means any R9 or poor rating they put on my account would not be valid after next month anyway? Is this all true? Can these written off loans sit with a collections agency for years and years, where they can keep calling me and sending me letters, and worse, make my credit rating miserable? Unless I offer the bank a settlement? What is my recourse with the collections agency? With the bank? Any help is appreciated and solicited! (By the way, the rep mentioned I was one of many calling this week about the very same thing. Because of the big project they recently undertook to take care of these old collectable files, there are many in a similar boat as me).
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SolveStudentDebt
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Joined: 05/November/2003
Location: Canada
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Posted: 20/September/2014 at 7:08am |
If the debt is not statute barred and is legally recoverable then they can pursue you with whatever means they deem effective. Credit reporting, legal proceedings, harsh approaches (verbal), and intimidation are a collection agency's weapon of choice.
If it is statute barred then it cannot remain in collection at the third-party level. Also, if you "make a deal" you are doing so with the devil. This will disrupt any limitation protection you may have. Once it acknowledged they can go back on their deal and pursue you as described in my first paragraph.
The best way to approach this is to stop the communication from them to you, and call out the limitation issue in a way that binds the bank and agency from ever communicating with you, or doing anything injurious. The CFW Group can do this for you if you want that. As long as you do nothing they can continue. If we get involved the bank will certainly issue no contact and closure of activity.
The banks are not responsible to do the work "for" borrowers. The work represents calling the issue out and making it so the bank is at your mercy, even in inadvertent situations.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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chloeinontario
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Joined: 19/September/2014
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Posted: 20/September/2014 at 2:18pm |
Hi...and thanks! I will call you Monday to discuss -- I assume you are available
during standard business hours. Thank you! I absolutely do believe in
hiring the right help whenever necessary. I am not comfortable wading
through this on my own with no experience.
I do believe the loan to be stats barred. The last student loan I received would have been in 2000 AND the Provincial and Federal portions have been paid. Furthermore, the rep I spoke to at the bank clearly said that a statute of limitations have passed and that they could not legally pursue me for the money by taking me to court/suing me. But he explained that even if they cannot pursue me through the courts, they are still absolutely within their rights to try to "collect it" from me.
I asked him straight out.... "You said you cannot actually force me pay this because a statue of limitations have passed, AND we are ONE month away from the credit reporting limitation (I don't know what the proper terms are, but I believe this debt and any associated R9 score would be "purged" from my credit report 7 years from last activity, which I guess is when the bank wrote it off in Oct 2007)....I said...."...excuse me, I'm not trying to be a wisea$$ here, but WHY would ANYONE pay this??"
His response was that it's in my best interest to offer a settlement deal to them because otherwise the collections agency could still ruin my credit rating in the future, and that there is no limitation placed on a collections agency for how long they can keep contacting me for the money and making inquires on my credit report. He said he's heard of collections agencies trying for years and years to get individuals to pay debts that they cannot actually take them to court for. I believe this was also the case with the poster on this site, Kcsige, who posted http://www.canadastudentdebt.ca/forum_posts.asp?TID=6871&title=good-advice-on-old-student-loans
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SolveStudentDebt
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Posted: 21/September/2014 at 2:21am |
It sounds to be barred. However, a collection agent is not going to be able to effectively confirm it because the bank would have to do it's own investigation. Bankruptcy does frig up limitation issues for people too. There is that potential threat there perhaps.
If you do want me or one of our people to do the discovery so you have a positive or negative then we can do that. It is not an easy undertaking though. Very delicate stuff.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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chloeinontario
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Posted: 21/September/2014 at 3:06am |
Thanks! I can imagine these cases are delicate as you say. They have so many details to sort out. Just to be clear it WAS the bank who confirmed the statute of limitations had passed and it was the bank who admitted they could not legally sue me etc. My file is in the hands of a collection agency but I called the bank directly to get answers because the collection agency was useless. Will call you Monday.
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SolveStudentDebt
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Posted: 21/September/2014 at 2:08pm |
No limitation issue is cut and dry. There are SO many things that people aren't aware of that, if something is or isn't done depending on the case, then it is trouble. Plus, there are so many conflicting matters such as legislation and, of course, a tad bit of other nonsense we call "systemic corruption".
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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michelleread
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Joined: 23/September/2014
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Posted: 24/September/2014 at 5:48am |
I have a very similar situation going on here also.
I have started receiving phone calls from common collection agency in Ontario (I am in Saskatchewan) about old student loans with RBC. These loans were gov't sponsored and were taken out in 1997 through 2002. Combined, and with interest these loans (1 Sask and 1 Can) total over $50,000. The date of last activity (payment) made to the account was in 2007 so it is possible that this loan is statute barred, however I am confused as to whether the 2 year or 6 year limitation would apply to RBC student loans.
Meanwhile, the collection calls are getting ridiculous and there is no chance I will be able to pay this amount back.
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SolveStudentDebt
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Posted: 25/September/2014 at 6:01am |
-Limitation issues are a collection agencies nightmare but also cash cow when people fall for their tricks. Limitation cases have to be handled a certain way and before you assume it is barred you should know if it is - for sure. Otherwise you put yourself at risk.
Banks are sneaky and can easily trip people up if they really want to. So can the agencies collecting for these banks. If there is a loop hole that they can use to hook you in to their net then they will do so.
People have to be aware that the limitation periods and issues vary from province to province. Creditor's rights lawyers are very creative in how they manipulate legislation and it's interpretation to benefit the financial community. The reality is that anyone can sue anyone in Canada. It is a reality that people have to be aware of at all times.
People who call me and members of my group every day all ask that question: Is my loan statute barred? Without analysis and actual investigation it cannot be said one way or the other. Many assume and find at a later time that their assumptions were incorrect and then the worse occurs.
You have to look at a limitation issues for what they are, and not what someone's interpretation of them are. Ultimately, you need someone who can take control of the situation and safeguard you, and ensure that the bank does not violate you in any way. This is one of our services. Not just anyone qualifies though. The intentions have to be good.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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Derek_88
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Joined: 25/September/2014
Location: Cambridge, ON
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Posted: 25/September/2014 at 12:49pm |
I think I got caught up in this project of RBC's. I got a call from AllianceOne looking for money when I was sure that I had paid off all my loans. I won't go into detail here though, as I have already posted about it in another thread.
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SolveStudentDebt
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Posted: 25/September/2014 at 3:54pm |
RBC, CIBC, and Scotiabank assign old accounts out for activation and acknowledgment. In your case it sounds like the risk shared portion was left out. If it is barred than you need to know. If you don't owe it then you really have to prove it in order to have it washed out.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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What-to-do-Marc
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Joined: 17/October/2014
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Posted: 17/October/2014 at 3:45am |
Cloeinontario, This background story is identical to mine. The only difference is that the bank loan rep that I spoke with didn't say anything about my loan being written off in the past. Please help, not sure what to do first.
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Marc
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