Student Loans and Chpt. 13 Again

[Gauche1967]

Hello All,

I field a Chapt. 13 plan in 2001 in which my attorney listed my federal student loans as "unexpired executory contracts." They were not supposed to be paid through the plan as they were at that time in a deferred in-school status. This didn't stop Sallie Mae from filing a proof of claim and turning the loans over to the guarantor in December 2005. They also list the loans as 90 days late in August 2002 on my credit reports.

In May of 2006, I field a petition with the court to incur new debt in order to take advantage of the low rates for Federal student loan consolidation. The petition was granted, however Sallie Mae never released the loans to the consolidator claiming they were in default status. Now the Chpt. 13 has been discharged and Sallie Mae is still obstrucing the consolidation.

Also, I have several private student loans that are non-dischargeable. The loan holders now claim these loans are in default due to the bankruptcy and are now due in full. My lawyer tells me this is not legal, but that I pretty much have no practical alternative, but go along with their offer to refinance (at their terms of course).

Anyone have any similar expieriences with Sallie Mae or private loans? How was it resolved?

Thanks!

[lrprn]

Welcome to BK Forum! Glad you found us!

Anyone have any similar expieriences with Sallie Mae or private loans? How was it resolved?

Sallie Mae is well known as a very difficult lender to deal with in the student loan space - read http://money.cnn.com/magazines/fortu...4649/index.htm to find out the details. It's not a pretty picture, and I'm very sad to report that you are far from alone finding Sallie Mae very difficult to deal with.

To read other debtors' stories who also found themselves sinking in a never-ending, downward spiral of student loan debt due to loan gouging tactics, visit http://www.studentloanjustice.org/ . What Sallie Mae is doing may be legal in our twisted, profit-is-everything America, but there's no doubt that it is morally and ethically wrong.

[JollyGG]

Mabey I'm wrong here. But when you do a student loan consolidation you are esentially taking on a new loan and paying off the old ones. Wouldn't that make your old loans paid in full?

[Gauche1967]

Yes, except Sallie Mae has not cooperated with the consolidator despite the fact that I have had a court order alowing me to incur new debt to consolidate since May '06. Is Sallie Mae in contempt?

[Frodo]

lrprn,

Thanks for providing that site. I can also say without question that Sallie Mae is horrible. As a quick example, my wife tried to file a forbearance. Sallie Mae said sure, but it will cost you $250 to file it. WTF? Not only that, the forberance was only good for a few months.

Evil! Evil! Evil!

[Gauche1967]

Were these federal loans? Charging a fee for a forebearance on a federal loan is probably illegal. You should check into this.

[lrprn]

Were these federal loans? Charging a fee for a forebearance on a federal loan is probably illegal. You should check into this.

Before Sallie Mae started to be publicly traded in 2004, they were sponsored by the US government. However, as of the end of 2004, now they are considered an independent private lender. That's how they get away with the horrible things they do to people unfortunate to sign for a loan with them.

[$$only4ever]

I, too, have had several problems with Sallie Mae. However, once I contacted their Executive Complaint Department, everything was straightened out. I have been in a Chapter 13 for almost 2 years and my loan has always been on an administrative forebearance per Sallie Mae at no charge to me except that interest does accrue daily on the unpaid principal balance. I pay a monthly payment (approved by the trustee before confimation) and because the loan is included in my plan, the trustee also makes a monthly payment. Just contact Sallie Mae at their main phone number in Wilkes-Barre and ask for their executive complaint department. Good Luck.