Paying Student Loans while in Ch. 13

[nsupanda]

My student loans are obviously in a forebearance due to my bankruptcy, but my attorney said I should make payments anyway (otherwise my loan balance will almost be doubled by the time my bankruptcy is over with).

I have been making payments, but now I can no longer access my online account with the student loan company so I'm having to mail in payments and I cannot see a payment history.

I called the company, they are also not allowed "due to federal laws" to mail me statements or to give me a payment history. So, technically, I have no way of knowing that my payments are being credited to my loan. I guess I'm just supposed to hope for the best once my bankruptcy is over? Why is this a "law"?

[GoodyYearCap]

This is interesting, and a thread I will watch. Our attorney told us he "could not tell us we CAN'T make payments, but said we shouldn't, and if we did, not to tell him" because it would be showing preferential treatment of unsecured debt paying. Hmmm.

[nsupanda]

Yes, I've heard that too and questioned my attorney about it... he said to keep on making payments though... ??? I feel like it's like the blind leading the blind :-)

[GoodyYearCap]

I am so sick of hearing "it just depends!" My attorney said this, SO many times about EVERYTHING. So I called three other attorneys on Friday (mind you, my attorney is supposed to file TODAY... he has our signatures, etc) but so many things are dependent on things, and he just looks at us like "well, don't volunteer too much more to me or I have to advise you against such-and-such," you know?! We have this attorney who is seemingly religious, has SEVEN kids, is kind and well-intended, but he's an attorney. Might as well be a politician. He is so wishy-washy, and we can never get a straight answer, if ANY.

We are in such a fine line/gray area in filing at all anyway, because of timing. My husband is very close to getting some extra contract work above his normal paying full-time job. The attorney said 'it doesn't matter.' Now... the extra contract work could come in three phases this year if all works out, and the first payment would be around $15k, followed by another $15k in a few more months, and so on (depending on completing his work, etc...) so even the contract work money DEPENDS on whether my husband can finish it, how it goes, etc. It's ALL UP IN THE AIR. Our attorney made it seem like our Trustee does not monitor income after our 341 meeting... but I have read so much else that suggests otherwise. He also said that "he/she MIGHT take into account your tax refunds, but who knows, they might totally ignore it." It's enough to make me throw up!

IF the contract works come through, and before our hearing, we'd have to mention it, obviously. Our payments would probably go UP, even though we don't know EXACTLY what the pay will be, when it will come, etc. I don't want to be babysat ALSO, if ALL of the contract phases happen this year, we could theoretically pay off our debt ourselves... but it's a total gamble.

Basically it's file NOW (TODAY), hope that the contract work doesn't send a contract before six weeks from now or so, hope that the Trustee doesn't want to see income after our hearing, hope that our tax refunds aren't taken from us completely, & I also hope that if we start paying- if two years down the road, our income is significantly better and we can back out/pay ourselves... then we've wasted a lot of time, money & effort.

I am only 30 days behind on two of my bills (first time ever) and creditors call me ALL DAY EVERY DAY. I can't wait until they get their letter to back off.

[nsupanda]

I agree... the Trustees are given way too much power over how they handle cases. It's not fair. If you happen to be a friend of the Trustee, you're good to go. I think there should be uniform rules each US bankruptcy court has to follow.

My attorney told me that the Trustee will always take tax refunds unless you're at 100% payback. He'll even take them if you're at 99%. My step-father (who is also in Ch 13, but not at 100% payback) asked the Trustee if he could keep his tax refund this year due to needed house repairs and the Trustee allowed him to keep it. That's great for my step-father, but what about all the other people who needed theirs too? Rules should not be based on how the Trustee is feeling that day.

[IamOld]

Panda, I think you can make payments BUT the legal scholar on the phone is wrong - you always have a right to see the status of your account and how any money is posted that you send to them - that is not a billing.

[nsupanda]

Well, the company is actually "The Department of Education" which is a Federal program. They use the website www.nelnet.com to allow people access to their accounts. When I logged in yesterday, a pop-up screen came up that said my account is no longer accessible and that I must call their legal department. I called the legal department and they told me "due to federal laws" I cannot access my account online and they cannot issue statements to me any longer, or until my loan is out of forebearance due to bankruptcy.

[IamOld]

Lovely Panda!!! They're still wrong...thing to do is to keep all your cancelled checks in case they get stupid at the end of your 13.

Hopefully then the student loan system will either be reformed or maybe it'll collapse under its own weight...

[nsupanda]

Oh I am! I'm also keeping a spreadsheet that logs every time I send a payment in to them, with a running total of how much I've paid. The only problem is, I don't know how much of that payment is going to be applied to interest vs. principal. Oh well, at least I'll have some sort of proof.

[IamOld]

Took the words out of my mouth! I have a spreadsheet with copies of all post-petition payments, in my case in case HSBC gets stupid.

[nsupanda]

I do that too!! lol I don't really trust anyone but myself with my money... but then again, if I could actually trust myself I wouldn't be in this situation hahahaha

[IamOld]

Agreed!!!! :-)

[woeisme]

My student loan company told me that I could send in payments, but that they'd hold them in "escrow" until I was out of BK so that the interest would continue to compound on the total amount, the only benefit would be that I'd have a big payment credited after I got out of CH 13. I was tea-totally ticked off!

[nsupanda]

Woeisme, I just got off the phone with them and they told me the exact same thing. Every payment I am making while in BK is not being applied to my loan, it's sitting in a "pot" until I'm out of BK and they will apply one big payment to my account. Not sure if they will apply any of that amount to interest or all to principal, but I'm kinda worried now. I was really hoping to be finished paying my student loans by the time my BK was over... now I'm not so sure that will happen. I want to come out of this BK debt free!

Also, if my money is sitting in a "pot" somewhere, is anyone REALLY keeping track of it? I don't like this at all.

[IamOld]

That whole industry is a cesspool - maybe when people start defaulting on them wholesale attention will be paid...