Legal Question in Credit and Debt Law in California

Student loan promissory note is damaged

I borrowed approximately 40,000 in federal student loans between 1983-1986. I started paying the loans off in 1987 and paid approximatly 450.00 per month for 11 years. I read an article regarding the fact that many student loans were erroneously charging more interest on many accounts, so I decided to inquire on my loan. That's when the trouble started. I got nothing but the run around for years, and then, in 2002, I received in the mail a ''Notice of Cancellation of Indebedness'' in the amount of 27,672 from the Dept of Health and Human Services, presumably for the student loan, since I don't know what else it could be for. I also finally, after years and years of requests, got a copy of the original promissory note. It has a stamp on it that says, ''Poor Source Original'' and ALL of the terms of the note are completely illegible. However, 3rd party debt collectors have hounded me on this loan for years. Every time I send them my documentation and request for validation, they stop. Then a new 3rd party collector starts up, and the whole process begins again. This has been happening for four years.They continue to keep adding huge penalties and interest, so now what they claim I owe is almost 80,000.What do I do?


Asked on 9/09/06, 3:05 pm

1 Answer from Attorneys
Robert Mccoy Law Office Of Robert McCoy

Re: Student loan promissory note is damaged

It sounds like your lender may have lost your prom note or notes. If this is the case, the loan will not be enforceable in a court of law. Also, if the prom notes still existed, the matter would have been turned over to the Federal

Government for collection (presumiing the loans were federally guaranteed). I am curious if your credit report has been or continues to be damaged. If it has and it is important to you to take care of it, you might want to bring an action in Federal Court seeking damages for violtion of the Fair Debt Collection Practices Act and for Declaratory Relief (Declaring you owe nothing on the loans). If you do not care about your credit report, you could just do nothing. The longer your lenders delay in collecting any money against you, the less likely it is they will have any legal recourse. You could also hire a lawyer to tell the collection agencies to contact his office instead of you, which by law will stop all collection communications to you. You also might want the lawyer to aggressively seek a copy of the prom notes and an accounting showing all payments and how the current claimed balance was calculated.

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Answered on 9/10/06, 10:14 am


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