Know all about the student loan defaults and the collection agencies
There are some noticeable differences when it comes to the student loans and the other kind of debts. These differences might be minor, but has major impacts when it comes to the credit score reports. The student loan default might result in a major fall at the credit reports and also it might also impact on the recourse that the debt collection agency student loan has on your student loan default.
Student loans are considered to be the unsecured debts. It simply means that it does not need the collateral for getting the loan. But then, when there is a student loan default, the lender and by extension, the collection agency student loan might try to collect that loan applying various devious means. But there are certain laws against the collection agency student loan, they cannot threaten to take away your car or home, go for the garnishment of wages or just freeze your bank account. In order to do that, they must go to the legal ways and get an order against you from the court in case there is a student loan default.
One of the main defences that you can have in case of the student loan default is the statute of limitations. Once the debt has matured for some times, the collection agency student loan can no longer obtain any judgement from the court against you. Then the loan is considered to be the student loan default. The number of years it needs a student loan to get the tag of the student loan default may vary from state to state, but then, there is a statute of limitation in all the states to prevent the student loan default to come back to haunt you over the next course of future years.
But then, there is no statute of limitations in case of the student loan default, although it is considered to be unsecured. But this also means it is openly enforceable. The collection agency student loan can go to the court at any time and seek judgement against you. Another aspect of the student loan default is that it is not discharged in the chapter 7 bankruptcy. It simply means that you have to pay for the student loan default even if you have filed for bankruptcy.
Thus it is extremely important to consider all the aspects before opting for the student loan.
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