something you should know about federal loans and BK

[militarybrat]

My lawyer told me that federal student loans are not impacted by bankruptcy at all since they are not discharged. However, future Stafford loans are impacted. After I filed, I received notice that my remaining subsidized stafford loan had been canceled and my master promissory note had expired due to the bankruptcy. So if you file, you will want to know this, and be prepared. I was unaware of this. Its a federal law too, not a state one.

So, if you file BK then you have to redo applying for your Stafford loan ad will have to redo your MPN. I just thought I would pass this info on.

[jribe]

good info. i just applied for grad loan s (fed) betwwen filing and had to resign the MPN as well. i did a post at the time too- maybe mod's can make a sticky about this for future refrence?

my loan wasn't impacted though; and thankfully after about 5 calls to the lender they approved my app again. make sure as the borrower if this happens that you really stay on them. I was scheduled to start school a week after they cancelled the loan (and it took them a week to send me notice they cancelled) so, first of all if i had not called to check the status - i would not have known.

My lawyer told me that federal student loans are not impacted by bankruptcy at all since they are not discharged. However, future Stafford loans are impacted. After I filed, I received notice that my remaining subsidized stafford loan had been canceled and my master promissory note had expired due to the bankruptcy. So if you file, you will want to know this, and be prepared. I was unaware of this. Its a federal law too, not a state one.

So, if you file BK then you have to redo applying for your Stafford loan ad will have to redo your MPN. I just thought I would pass this info on.

[backtoschool]

As all as you have to do is sign a new master promissory note. If your loan is with Direct Loans, you may not even have to do that. The promissory note is a contract and therefore is voided by bankruptcy, that is why you have to sometimes sign a new one. It all depends on when your first loan disbursement under that master promissory note was. The worst case scenario, is that you simply sign a new promissory note. The loan disbursement should only be delayed a bit by the paperwork, not cancelled completely.