Is it legal for a collection agecy/insurance company to leave a loan open?

Question Details: About 4 years ago, my loan was delinquent by 2 months due to a layoff. When I went in on the 3rd of the month, the credit union said it was closed and was sent to collections. It's been almost 4 years and finally the collecters sent me a bill but my loan is still open. It was missing for 3 years and all I got was excuses and lies. Is it legal for this to happen? Can a collection agency and a credit union leave a personal loan open and not charge it off or close it?

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