General Discussion - Statute of Limitations - Canada

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RE: Statute of Limitations

Postby footloose » Sun Dec 04, 2011 10:38:46 PM

Thank you for your quick and detailed response. The information that you supplied gives me a a clearer picture of your situation.

It appears that this loan is the Federal portion of a student loan. In a previous post, you made some comments that leads me to this conclusion.

First, you said that in 2003, that you had settled a debt with Nordon Collections for the Provincial portion of your student loan and that this debt does not show on your Credit Report.

Second, you state that you have contacted both the Federal and Provincial governments and they have no record of any outstanding student loan with you. That means, that the Federal government has not guaranteed the Federal portion of your defaulted student loan. The Provincial portion of your student loan would have been obtained through OSAP ( Ontario Student Assistance Program ) as all Provincial student loans are automatically guaranteed by the Ministry of Training, Colleges and Universities. You had defaulted on the Provincial portion of the student loan, the Ministry then paid the financial institution from where you obtained the loan ( I assume the CIBC ) the defaulted portion, and now the Provincial government becomes the new creditor. They then assigned the collection of this defaulted student loan to Nordon Collections to whom you made a final settlement.

Third, you claim that you have always received your income tax refunds as well as your quarterly GST payments.

What has happened is that the Federal portion of your student loan obtained from the CIBC was never guaranteed by the Federal government. When you obtain the Federal portion of a student loan from a financial institution, the Federal government will pay the interest portion only during the period of time that you are in full-time attendance at a post-secondary educational institution and up to six months thereafter. If a financial institution also wants the principal portion of the loan guaranteed by the Federal government in the event of default by the debtor, then the financial institution must pay a premium monthly/annually to the Federal government. Unlike the Provincial portion of a student loan, of which the principal is guaranteed automatically by the Provincial government, the same cannot be said for the Federal portion of student loans.

In your case, the CIBC has elected not to pay a premium to the Federal government to guarantee the repayment of the Federal portion of this defaulted student loan. However, your situation becomes somewhat cloudy at this point because it is not clear to me as to who actually owns this debt.

You claim that on your Credit Report, this debt is shown as an I9 and that is correct. You further state that under the Status heading, it shows Bad Debt, Unable to Locate ( or words to that effect ) This would indicate to me that this debt has been SOLD, not assigned to CBV.

When you attempted to negotiate the settlement of this debt with CBV, the person to whom you were speaking said that she would first have to get the approval of CIBC before agreeing to a final settlement Also, when you contacted CIBC, about this debt, they told you that CBV now has the file. When a debt is assigned to a collection agency, the file remains with the original creditor. A file is only transferred to a collection agency or debt buyer when a debt has been sold. It appears to me that this debt is owned by CBV and having to get the approval of CIBC before a negotiated settlement can be made is strictly a "smokescreen".

The original student loan was for $9,995 and from the time of default until this debt was sold, interest had accummulated making the total debt owing $10,436.15. In my view, CIBC has sold this debt to CBCL which was later absorbed by CBV for pennies on the dollar. Because this debt was sold and not assigned to CBCL/CBV there is no agreement in place between you and CBCL/CBV for the payment of interest other than what CIBC has charged when the debt was sold. Therefore, the charging of interest by CBV is illegal. In order for CBV to legally charge interest on this debt, they would first have to obtain a court order which I am sure they do not have. This is just another attempt by a debt buyer to extract more money from a debtor.

Unfortunately, you currently are between a "rock" and a "hard place". In order to obtain your mortgage, you must first pay off this debt. This has become standard practice for all financial institutions granting mortgages whose applicants have an outstanding and unpaid student loan.

You are now faced with two options. Attempt to seek out a lender, through an independent mortgage broker, who will grant you a mortgage with an outstanding student loan showing on your Credit Report. No bank will do this so that means a private lender may overlook this and grant you a mortgage. If you can find a lender who will grant you a mortgage, then you have time to negotiate the repayment of your unpaid student loan. Keep in mind that the starting point to negotiate is $10,436.15, not $14,031.14. If this fails, and you still want to proceed with the obtaining of a mortgage, then you will have to negotiate a settlement with CBV. It appears from your posts that you have only been dealing with front line personnel. It now becomes imperative that you deal with senior personnel to negotiate this student loan. I have seen many people with debts as old as yours successfully negotiate the debt for 50%. I would suggest that you make CBV a cash offer of $5,000 in full settlement of this debt.

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RE: Statute of Limitations

Postby TCrown1 » Fri Dec 02, 2011 07:17:57 AM

The account is marked as an I-9 on my bureau
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RE: Statute of Limitations

Postby TCrown1 » Thu Dec 01, 2011 06:35:17 PM

Ok I just checked my email, cuz I remember CBV sending me some breakdown of payments. Starts with $9995.00. Then goes to $10,436 and stays like tht for rest of the years. It shows payments of $50, 150 and in 2008 of $500 and all payments seem to be directly going no where.

I can tell document page 1 looks somewhat altered by CBV or at least I think so. It also says "Division 1 Loan - Class B Govt FE Loan" if that means anything.

Says : Nov 1/99 - $9995

Then as of Dec 1/99 - $10,436.15.

Then from Nov 2001 to April 2007 - I paid $50.00 consecutively every month except maybe 6 months worth missing throughout those years.

(There is one discrepancy or TYPO where it says March 2006 value date $50.00 and process date May 2008). Whereas every other line in this 10 page thing doesn't have a mistake. Don't know if tht means anything.

And lastly July 2008 to Nov 2008 - it says I paid $500 a month. That's it.

*** Then has a summary saying :::::

Total Interest Paid - $ 5376.00
Principal Outstanding - $10436.15

Accrued Interest for pymt by student - $ 3595.29
Amount of payout - $14031.44 due Nov 2011 (typed in)

Next payment due date --- March 31st, 2004

And that's it!! I can send it to you by email if you want to look at it also.
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RE: Statute of Limitations

Postby TCrown1 » Thu Dec 01, 2011 05:52:08 PM

Original Loan was for $9995.00. Payments ranged from 2002 to 2008 in the amounts of $50 to $150 off and on throughtout the years. The last few years from 2003-2008 was paid to CBV collections. But for some reason I think in 2003 ish there was another agency dealing with it. CBCL? Not sure. But CBV has been the mainstay.

As for whether its federal or provincial, I do know back in 2003 I settled a debt with Nordon for provincial I believe and it was wiped right off my credit. I've contacted both federal and provincial offices and neither say I owe money. I've never had problems with tax refund or gst holdbacks ever.

I've got the impression that this CIBC loan is the "risk portion" payable to the bank.

On my credit report it says:

CIBC Student Loan
Account # ****608
Date Opened - 01/1999
Balance - $10436.00

Date of last activity - 11/2008
Status - Bad Debt, Unable to Locate. (Something like tht)

History - 0 payments past due 30 days
0 payments past due 60 days
0 payments past due 90 days

That's it!

I don't' see a rating for it cuz when I get my credit report I usually get the Fico Score one from Equifax and it doesn't list that R info. So I'm not sure.
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RE: Statute of Limitations

Postby footloose » Thu Dec 01, 2011 05:02:54 PM

Was this a Federal or Provincial ( Ontario, I assume ) student loan?

What was the amount owing on the loan at the time you defaulted in December, 2001?

How much was the payment you made on the loan in 2008? And to whom did you make the payment?
"
On your bureau, does this student loan show as a "Trade Account", a "Collection Account" or both? Is it given a rating such as an R9 and are there any comments such as "Bad Debt", Written Off", etc.?

If you can answer these questions, then I can explain probably what has happened and what your options are.

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footloose
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RE: Statute of Limitations

Postby TCrown1 » Thu Dec 01, 2011 03:01:23 PM

Hey Everyone,

Hopefully someone can help me. I'm closing on a mortgage in 90 days and one of the conditions is that the derogatory comment or account has been removed or paid.

Its a CIBC student loan taken out in 1999. Defaulted in late Dec 2001 even though I graduated in May 2001. And date of last activity was 2008 via a payment I made.

I've contacted the CIBC national student loan centre, talked to a few ppl, been passed around to their Customer Response Unit, and was advised outstanding balance is $10,436 which coincides with the amount on my bureau.

PROBLEM: They said I have to speak to CBV Collections regarding this as they have the file. I call them up spoke with a Supervisor, and she right off the bat confirmed the same balance and offered 80% settlement of $8300.

I said sure no problem, please send me a settlement offer letter. She says ok. The next day she calls and now says she needs, paystub, hardship letter and financial questionnaire filled out. I said what for I'm settling for 80%. She put me on hold and came back and said ok nothing is needed.

She said she will get CIBC approval on settlement and contact me in the morning, the next morning (today) comes and she says ok I have everything ready. And that I will need to pay a lump sum via Western Union, with balance due in 30 days. I said sure but I still need the letter before I pay. She put me on hold and came back and said " OOPS I made a mistake, the balance is now $14,044. And that I would need $11,000 for 80% settlement. Otherwise if I still wanted the $8300 I would have to provide hardship documents. I said WTF lol. For 2 weeks everyone told me the balance is $10,436 and now magically its $14.044 she says yes its the interest. I said good bye and hung up. I called back CIBC centre and they now say "oh ur account now says in settlement with CBV and then says it looks like they've said ur balance is $14,044". He said CBv controls the account so what they say goes. Arrrrrgh!!!

SO WHAT AM I SUPPOSED TO DO?

WHAT CAN I DO?
J.Redd
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RE: Statute of Limitations

Postby cyrilpaz » Tue May 10, 2011 08:35:30 AM

Thanks for your help, this has been extremely helpful. Do you have any advice on if should negotiate a settlement. When would this trade line come off my credit report? Is FDR just trying to collect this debt or have they purchased the debt from CIBC.

cyril pazhaidam
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RE: Statute of Limitations

Postby footloose » Tue May 03, 2011 09:11:26 AM

When dealing with the subject of student loans, this area can be very complicated and confusing as many changes have occurred over the years complete with changing legislation and who is administering the loan. In your situation, student loans become even more complicated when they were made under the Canada Student Loans Program. Here is what I have determined.

In 1993, you made an application to the CIBC for a student loan pursuant to the Canada Student Loans Program. Under this program, the federal government guaranteed the payment of interest on the loan for the period that you were in full-time attendance at a post-secondary educational institution and up to 6 months thereafter. The lending institution could elect to have the principal portion of the loan guaranteed by the federal government in the event of default. Not all financial institutions chose this option. In order for the federal government to guarantee the repayment of

principal in the event of a default, the lending institution had to pay a premium to the federal government, much like paying an insurance premium on your automobile in case of an accident. Some financial institutions chose not to pay this premium, therefore, they were "on the hook" if the borrower defaulted on the loan.

You say that you have copies of the loan documents from the CIBC. It should clearly state then that the principal portion of this student loan is NOT guaranteed by the federal government. That then gives the CIBC the authority to collect on the defaulted portion of this student loan.

In your original post, you stated that you made your last payment on this student loan on May 31, 2005. Under the Ontario Limitations Act, 2002 for defaults occurring after December 31, 2003, the creditor, i.e. CIBC has only 2 years to initiate legal proceedings to obtain a court judgment. However, it appears that CIBC has chosen not to pursue this debt through the legal system. Instead, they have assigned it to a collection agency to collect, namely FDR. Consequently, this debt now becomes negotiable with FDR.

As to the provincial portion of this debt, both the interest and principal portion was guaranteed by the Ministry of Training, Colleges and Universities. CIBC would have applied to the Ministry for reimbursement of the defaulted provincial portion. When that happened, the Ontario government now becomes the creditor. Under the Ontario Limitations Act, 2002, there is NO limitation period for the collection of student debt guaranteed under the Ministry of Training, Colleges and Universities Act.
The Ontario government also has the right to turn the collection of this debt over to the CRA through the "right of set-of" which I explained in a previous post.

In summary, it would appear that the provincial portion of your student debt has been repaid through the CRA and the "right of set-off". The federal portion of your student debt remains outstanding but is repayable to the CIBC. If you can negotiate a settlement with FDR, this should finalize any monies owing on the federal portion of your student debt.

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RE: Statute of Limitations

Postby cyrilpaz » Tue May 03, 2011 05:31:05 AM

This is the federal portion. For educational purposes I was wondering how the provincial portion would be treated and why it went to the CRA so quickly while this one took so long. Its confusing for me because FDR says they're collecting on behalf of CIBC not the government and is trying to negotiate a settlement. I asked them for a statement and they sent me the loan documents from the Canada student loans program which at the time was done through CIBC and a statment from CIBC which says it was charged off. Does the statute of limitations apply?

Thanks for your help sorry it sounds so confusing.
cyril pazhaidam
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RE: Statute of Limitations

Postby footloose » Mon May 02, 2011 10:20:55 PM

There is some confusion on your part as to on whose behalf FDR is collecting for. You have not established if FDR is collecting the federal portion or the provincial portion of your student loan. FDR should have sent you a letter stating the name of the creditor and the amount outstanding. You have not indicated that you have received this letter, therefore how do you know the name of the creditor and whether it is the federal portion or provincial portion of your student loan?

I suggest that you contact FDR and request this letter. Once you receive it, return to this discussion forum and give the full details or send me a PM. The federal and provincial portions of a defaulted student loan are treated differently as well as the limitation period. Right now, it is a "guessing game" with too many "I think".

All student loans are guaranteed by either the federal or provincial government. If you have defaulted on your payments to the CIBC, they would have been reimbursed by either the federal or provincial government. That means the CIBC is out of the picture. This is why it is important to determine if the defaulted loan applies to the federal or provincial portion. The collection methods for each portion is different.

Also, unless there are exceptional circumstances, you cannot negotiate a defaulted student loan with a collection agency, who are collecting on behalf of a government, any more than you can negotiate the payment of your income taxes with the CRA.

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footloose
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