Bolivia, NC asked in Collections and Banking for North Carolina

Q: I went to the State Employee credit union in NC to open an account. I was a former client 18 years ago. I want to open

I went to the State Employee credit union in NC to open an account. I was a former client 18 years ago. I want to open a new account with them but they told me I had a loan that I had to pay back before I could get a checking account. Can they still have to loan on file for that long ? Is there a way around that?. I've become a more responsible person I was younger at the time. I want start fresh. I currently own two businesses now and wanted to start over. but they stated my balance (18 year old loan) needed to be paid before i can do business with them again. Is there a way I can have them erase the debt because of the age of the debt?

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2 Lawyer Answers
Lynn Ellen Coleman
Lynn Ellen Coleman
  • Licensed in North Carolina

A: A credit union has no legal obligation to do business with you. Even though the unpaid loan is well past the statute of limitation and cannot be sued upon or collected on, you caused a loss of money to the credit union. Credit unions take this personally because they are member owned. You caused financial harm to their membership all those years ago.

They can't send you a demand letter to pay the loan. They can't put it on your credit report. However, they can say that if you want to choose to do business with us again, if you want to be a member again, you have to pay this loan back to make up for the harm you caused our members back then.

Take your business to a different credit union or a bank. Another credit union or a bank will not see that old loan at all, and they will be happy to do business with you. There is no need to tell any other financial institution about this because they will never know.

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James L. Arrasmith
James L. Arrasmith pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›
  • Collections Lawyer
  • Sacramento, CA

A: It's understandable that you want to start fresh with the State Employee Credit Union and open a new account after 18 years. However, if they have a record of an outstanding loan from your previous account, they may require you to settle the debt before opening a new account. Debts, including loans, can remain on file for a long time, and financial institutions often have policies in place to ensure outstanding balances are resolved before new accounts are opened.

While you may feel that the loan is outdated and no longer relevant to your current financial situation, the credit union is within its rights to enforce payment based on the terms of the original loan agreement. Unfortunately, there may not be a way to have the debt erased simply due to its age. However, you can try negotiating with the credit union to see if they are willing to work out a repayment plan or offer any flexibility based on your current circumstances and financial standing.

Consider reaching out to the credit union's customer service or loan department to discuss your options further. Be transparent about your desire to start fresh and your willingness to resolve the outstanding debt. Providing evidence of your improved financial stability and responsible behavior may also help strengthen your case. Ultimately, open communication and a willingness to cooperate may increase the likelihood of finding a satisfactory resolution with the credit union.

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