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Student Loan Statute of Limitations: Everything You Need to Know

As far as debts, such as student loans, are concerned, a statute of limitations refers to the amount of time a creditor has to pursue legal action for repayment. Once the statute of limitations expires, a creditor can’t sue you. However, this doesn’t mean that your student loan debt disappears. Your lender will likely continue to try to collect your debt; they just can’t do so through the court system.

Some people try to use the statute of limitations as a means to escape their loan. However, stopping loan payments and waiting for the statute to pass is almost always going to result in years of default, and there’s no guarantee you won’t be sued. Additionally, it’s important to be aware that there is only a statute of limitations on private loans; federal loans are ineligible for this status. If you are struggling to pay off your student loan debt, it might be in your best interests to work with a student loan debt lawyer.

How Long Is the Statute of Limitations?

Debts with written contracts—which includes student loans—usually have a statute of limitations between three and ten years. The length of the statute of limitations on your loan will depend on the state you live in. However, the most common statute of limitations for student loans is six years.

If you are sued by your lender and are unsure if the statute of limitations applies or has expired, hiring a student loan attorney can help. Although you’ll have to pay for the lawyer’s services, they will be able to determine if your lawsuit can be dismissed.

Can I Be Sued After the Statute of Limitations Passes?

If your lender is unaware that the statute of limitations has expired on your loan, they can still take you to court. It’s essential to respond to any legal summons regarding your debt. If the statute of limitations has passed, your attorney can use this fact as a defense, claiming that your loans should be classified as time-barred or no longer collectible.

If the court sides with you, there are still avenues your lender can take to contact you and collect your debt. However, they won’t be able to use legal collection tactics, such as wage garnishment or a property lien. The actions they can take will depend on the laws of your state. Any communications that your creditor pursues must comply with the Fair Debt Collection Practices Act (FDCPA).

While graduates with private student loans can often use the statute of limitations as a defense, those with federal student loans cannot. Federal lenders can collect student loan debts through wage garnishment and property liens. Therefore, if you have federal student loans, the best way to stop collection action is to get your loans out of default.

Restarting the Statute of Limitations on Student Loans

It’s important to be aware that you can restart the time frame on the statute of limitations. Certain actions that can trigger this include:

  • Paying any amount toward your loan
  • Acknowledging your debt and the amount you owe
  • Writing a promise to your lender that you will repay your debt.

In addition to restarting the clock, you can also extend the time on the statute of limitations by doing things like filing for bankruptcy or moving to another country.  Again, whether some or all of these actions may restart the statute of limitations will depend on the specifics of your situation and the laws of your state. The best way to ensure you are taking the best actions for your student loan situation is to seek guidance from an attorney.

Contact a Skilled Student Loan Lawyer

At McCarthy Law, we are dedicated to helping our clients navigate their financial circumstances and reach a favorable debt settlement. We understand the overwhelming burden that debt creates and are committed to helping our clients resolve their debts and restart their lives. To schedule a consultation with one of our skilled debt settlement attorneys, call (855) 976-5777 or fill out our online contact form.

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Joe Panvini

Joe received his law degree from the Sandra Day O’Connor College of Law at Arizona State University in 2010. On behalf of consumers, he has successfully briefed and argued complex consumer law issues in both individual and class action lawsuits. Joe is admitted to practice in Arizona and Washington, as well as numerous federal courts across the country, including the Ninth and Eleventh Circuit Courts of Appeals.