CitiBank Sold My Loans Off/ Charged Off During BK!

[CatsInTrouble]

Citibank really screwed me. Which is not surprising. While I was in BK, instead of just holding on like the rest of my student loans, they discharged some of the loans with their insurance agency- their Guarantor- who them sold the loans to collections! In the course of April to now!!!

So, instead of just resuming payments, I have to deal with collectors.

[AngelinaCatHub]

Citibank really screwed me. Which is not surprising. While I was in BK, instead of just holding on like the rest of my student loans, they discharged some of the loans with their insurance agency- their Guarantor- who them sold the loans to collections! In the course of April to now!!!

So, instead of just resuming payments, I have to deal with collectors.

So what is the problem? Aren't you in bk? If not, did you plan on paying them? At this time without your explanation, I fail to see the point of the question. It is common to sell off the debts. 'Hub

[backtoschool]

This is a repeat question. I answered your question in your other thread. Here is the link:

http://www.bkforum.com/showthread.php?t=47649

[CatsInTrouble]

Not really a question. Kind of a caveat for others. This is what I've learned:

Your private student loans may get sold off during the course of your BK. This screws you because the original people, Citibank or whomever, tend to still offer you a little bit of those "student loan" perks, like deferral if you return to school, or whatnot.

Well, if your loan gets sold off, that's gone. You are now dealing with a collection agency (ouch) and they want all the money at once, until you can convince them otherwise.

Lesson: I don't know. Perhaps while you are IN your bankruptcy, you can try to stay in touch with your private loan place. Ask them what their process is with their guarantor when their clients go through BK. Citibank automatically goes to the guarantor (it's like insurance I guess), who pays them off,a nd then sells the debt to collections.

Yes, I planned to pay them, anyway, as they are student laons and not dischargeable. I had just hoped to deal with Citibank, who are somewhat more friendly, willing to do deferments, etc, then a collection agency, who jump to garnishments ASAP (or threaten to).

Basically, what I feel happens is that you can't discharge them cause they are student loans, yet, you don't get any of the "perks" of student loans. They are treated like straight out loans. Kind of a catch 22 to me.

[backtoschool]

Not really a question. Kind of a caveat for others. This is what I've learned:

Your private student loans may get sold off during the course of your BK. This screws you because the original people, Citibank or whomever, tend to still offer you a little bit of those "student loan" perks, like deferral if you return to school, or whatnot.

Well, if your loan gets sold off, that's gone. You are now dealing with a collection agency (ouch) and they want all the money at once, until you can convince them otherwise.

Lesson: I don't know. Perhaps while you are IN your bankruptcy, you can try to stay in touch with your private loan place. Ask them what their process is with their guarantor when their clients go through BK. Citibank automatically goes to the guarantor (it's like insurance I guess), who pays them off,a nd then sells the debt to collections.

Yes, I planned to pay them, anyway, as they are student laons and not dischargeable. I had just hoped to deal with Citibank, who are somewhat more friendly, willing to do deferments, etc, then a collection agency, who jump to garnishments ASAP (or threaten to).

Basically, what I feel happens is that you can't discharge them cause they are student loans, yet, you don't get any of the "perks" of student loans. They are treated like straight out loans. Kind of a catch 22 to me.

After 270 days past due, your student loans go into default and are subject to aggressive collection. This is true for private student loans too. Some student loans still have government guarantees. If they do, they are sold back to the guaranty agency and are placed into collection. A 25% "collection fee" is added to the balance of the loan and starts accruing interest immediately.

My guess is that this is what happened to you.

[mama23boys]

When we were in Ch13 Salliemae sold my husband's student loan to a "collections/insurance" company (I don't know if that is the specific name). We were through Salliemae and they sold it to ECMC. After we were discharged from our bankruptcy ECMC sold it back to Salliemae. I would bet that Citibank has a similar procedure.

[CatsInTrouble]

that sounds right, the 270 days, etc EXCEPT my loans were in deferral when I went into BK, and so they weren't officially past due, although it had been a while since my last payment. They said it was automatic with the BK.

270 days.. Filed in April, discharged in August.... no, it wasn't 270 yet. . .

[CatsInTrouble]

but yes the guarantor part is right, it was a guarantor first and THEN collections. sigh.

[adviceplease]

Can they do this if you are still in school and have not started making the payments yet and make you start paying?

[backtoschool]

Can they do this if you are still in school and have not started making the payments yet and make you start paying?

If you are still in school at least half time, you can get an in-school deferment, even for private loans. Interest will accrue while you are in school, but you can capitalize the interest.

[Amy26]

I guess I got lucky... none of that happened to me. I have student loans with Chase, Sallie Mae and a small company called Loan 2 learn. None of them sold off my loans and they are still in forebarance. I'm a little worried about having to start paying them back soon though... I owe 55,000 on my bachelors degree in federal loans and like 50,000 in private loans for my masters... sigh.