Section 20.15.970. Delinquency and default.

	(a)  A loan is delinquent if a loan payment is one or more days past due. When a loan payment is  
		(1) 30 or more days past due, the borrower and cosigner, if any, will be notified;  
		(2) 60 or more days past due, the institution of attendance will be notified.  
	(b)  A loan is in default if  
		(1) a loan payment has become 180 or more days past due;  
		(2) the borrower or the cosigner, if any, has failed to comply with the applicable reporting requirements of this chapter; or  
		(3) the borrower or cosigner, if any, has falsified any information on the loan application or information required under AS 14.43  or this chapter.  
	(c)  To prevent default under (b)(1) of this section, the borrower or cosigner, if any, must pay the delinquent amount before it is 180 days past due.  
	(d)  Repealed 3/1/2002.  
	(e)  A borrower and cosigner, if any, who has defaulted under (b)(1) of this section is no longer considered to be in default status for the purposes of  
		(1) repealed 3/15/98;  
		(2) repealed 3/1/2002;  
		(3) taking a permanent fund dividend under AS 14.43.145(a)(2) if, on the date of the taking, enough of the interest and principal due is voluntarily paid so that no payment is more than 179 days past due, calculated as if the loan had not been accelerated;  
		(4) calculation of an institution's default rates under AS 14.43.120(d), if enough of the interest and principal due is paid so that no payment is more than 179 days past due, calculated as if the loan had not been accelerated; or  
		(5) issuing an order to withhold and deliver under AS 14.43.145(a)(3) if  
			(A) all costs of collection, and the interest and principal that would have been due if the loan had not been accelerated, are paid; or  
			(B) the borrower or cosigner, if any, has submitted proof that the person is current on payments and has made complete and timely payments for the six most recent and consecutive months, under a payment agreement that person has reached with the commission or its agent collection agency.  
	(f)  If a person has cosigned a loan that is in default, the commission will claim the permanent fund dividends of both the borrower and the cosigner. The commission will give priority to taking the permanent fund dividend of the borrower to satisfy the defaulted loan before taking the permanent fund dividend of the cosigner.  
	(g)  For the purposes of determining, as a basis for eligibility for a loan, whether the borrower or cosigner has defaulted on a loan previously awarded by the commission, a borrower or cosigner will be considered not to have defaulted on the loan if the borrower or cosigner has made full payment on the loan, including all interest and collection costs, and if the borrower or cosigner satisfies the requirements of AS 14.43.172(c). The borrower or cosigner's payment of the loan under this subsection must have been predominantly voluntarily paid.  
	(h)  For purposes of this section, an amount is not voluntarily paid if it is the proceeds from an order to withhold and deliver, involuntary wage assignment, or involuntary taking of the borrower's permanent fund dividend.  
	(i)  Information regarding the status of a loan may be reported to credit bureau organizations.  
	(j)  Repealed 5/26/2011.  
	(k)  Notwithstanding a determination of default, the commission may make alternative repayment schedules available to borrowers subsequent to default. Once a loan has become 180 or more days past due, the commission may require the borrower to enter into and comply with a loan rehabilitation payment agreement, in order to qualify for an alternative repayment schedule. A loan that has become 271 or more days past due is not eligible for an alternative repayment schedule.  

Authorities

14.42.030;14.43.105;14.43.120;14.43.125;14.43.145;14.43.168;14.43.171;14.43.175;14.43.320;14.43.630;14.43.640;14.43.740

Notes

Reference

20 AAC 14.205
20 AAC 15.765
20 AAC 15.790
20 AAC 15.915

Authority

AS 14.42.030 AS 14.43.105 AS 14.43.120 AS 14.43.125 AS 14.43.145 AS 14.43.168 AS 14.43.171 AS 14.43.175 AS 14.43.320 AS 14.43.630 AS 14.43.640 AS 14.43.740

History

Eff. 12/4/96, Register 140; am 3/22/97, Register 141; am 3/15/98, Register 145; am 9/23/99, Register 151; am 4/20/2000, Register 154; am 3/1/2002, Register 161; am 7/1/2002, Register 162; am 5/26/2011, Register 198; am 2/22/2015, Register 213