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    #1

    student loans

    How did this happen?
    I thought students loans could not be discharged under bankruptcy. I live in California and my cousin had students loans through University of Phoenix. His student loans totaling $12,750 were discharged 02/28/2005 in his Chapter 7 bankruptcy filing. I did not believe him, so he faxed with a copy of his updated credit report.

    I am phyiscally in possession of his report that states;

    Citibank NA #---Balance Pay Status Unrated
    Date Updated: 03/2005 Accuont Type: Installment
    High Balance: (1st loan) Responsibility: Individual Account
    Terms: $?? for 120months Date Opened: 07/2002
    Date Closed: 02/2005

    Loan type: Student Loans
    Remarks; >Included in bankruptcy<
    Estimated date that this item will be removed: 01/2012
    Tags: None
    #2
    It looks like a private student loan through CitiBank, so it probably wasn't backed by any government program or Non-Profit, so it gets discharged.

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      #3
      student loans

      How can you find out if it is backed by a government program. I have sallie mae private loans.

      Comment

        #4
        It really doesnt matter if it's government back or not. Student loans are supposed to be exempt for BK. It can never hurt to list a debt in your Chp7 petition, just as your cousin benefited from doing so!

        Good Luck!
        The information provided is not, and should not be considered legal advice. All information provided is only informational and should be verified by a law practioner whenever possible. When confronted with legal issues contact an experienced attorney in your state who specializes in the area of law most directly called into question by your particular situation.

        Comment

          #5
          I included my student loan in the Ch 7 paperwork but my attorney stated it was more than likely not going to be discharged. It is government backed ... the servicer is Nelnet. We haven't received our discharge yet to confirm whether it was or wasn't.

          Considering it more than likely won't be discharged, I assumed I would continue to receive an invoice. I realize now that by listing them in the BK they are subject to the automatic stay ... even though I wasn't behind with any payments. I went to their website and the last invoice sent to me was dated 4/1/05 which was paid. I'm assuming the April invoice was mailed to me prior to Nelnet receiving the notice of BK.

          Should I make a payment online without the May invoice? The last thing I want Nelnet to do upon receiving the discharge notice is to report on my credit report that I am 2 - 3 months late if I don't receive the discharge until mid-June. I'm just unsure what to expect but don't want to make matters worse by either of my actions - I'm dreading the actual credit clean-up process.

          Comment

            #6
            There are student loans, and then there are Student Loans. True Student Loans are covered by certain lending laws and requirements, and backed by goernment monies, etc. Those loans are what is not dischargeable.

            There are also loans that banks provide, which they call student loans because they are supposed to be specifically used for educational purposes. In fact, these loans are actually just another installment loan. They get treated as a personal loan, not an official "Student Loan".

            Usually, if it is an official Student Loan, you will have gotten it through your school's financial aid office. If you went straight to a bank and got a loan directly, it probably would be considered just an installment loan.

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              #7
              Bank Said They Will Write Off Student Loan

              I have an Education Loan and I listed them on my petition. I have not had my 341 yet but I spoke to the bank and they said that this loan was dischargeable and they have already writen it off. They said that since it was a private loan they could not collect.

              Do you think the trustee will disallow it anyway or prior to the 341 they confirm that in fact it was private and dischargeable? What if he or she doesn't allow. Should I mention the conversation I had with the bank less than three weeks ago?

              Comment

                #8
                LinSC
                Your student loans (which are not dischargeable) will go into a forbearance status when you file BK. You will get a statement in the mail after they get word of your discharge. That's what happened to me with "Direct Loans". I even called to find out what happened and why I didn't get my next month statement in the mail. The reason for this is that they can not legealy collect any money from you during BK.
                Good Luck!
                Edyta...
                Discharged April 2005

                Comment

                  #9
                  EdytaHome,

                  Thanks for the info! I appreciate it. I know I'm worrying about every little thing until this BK process is over - I guess it's just the "unknown" that gets to me.

                  Thanks again!

                  Comment

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