If I paid a student loan off with a check marked Paid In Full, am I responsible for interest because they now say I went past 10 day pay-off date?

UPDATED: Aug 25, 2011

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If I paid a student loan off with a check marked Paid In Full, am I responsible for interest because they now say I went past 10 day pay-off date?

I was placed on disability and called for the pay-off of my student loan. I sent a check for the full amount that I was told I owed. Now 2 years later they are sending me letters and calling saying I owe them interest on a prior balance of the loan because I went 1 day past the 10 days for the pay-off. Can they do this even though I have the bank certified copy of the check showing Paid In Full which they deposited andcashed. If so, why would they have not at least sent me a bill for the difference instead of waiting 2 years ? If I had paid in full I would have surely paid the 1 day difference.

Asked on August 25, 2011 South Carolina


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

In most states there are decisions where there is a disputed debt where if the debtor sends a check stating "paid in full" and the creditor negotiated the check without striking out the "paid in full" notation, the negotiation of the check by the creditor is a full accord and satisfaction of the debt owed and it is "paid in full."

You should write back to the entity who is writing you for payment on the interest of the prior balance that was supposedly one (1) day late advising it that a check for the full balance stating "paid in full was negotiated," that more than two (2) years have passed without any claims for accrued interest and that you consider your obligation "paid in full."

If you get pressed on the issue, the entity pressing you may be in violation of state and federal unfair debt collection practices.

Good luck.

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