Private Student Loan Payments While In Stay

[jadams]

Hi-

I've seen posts about Stafford and other government student loans going into automatic forbearance or deferment during the automatic stay, with payments resuming once the case is closed.

Some are using the stay to take a short break from the payments, others suggest making the payment anyways to save the interest compounding.

Does anyone have experience with how TERI / AES will treat a private loan during the stay?

I filed Wednesday and have a payment due soon. I can no longer login to the AES site and see my loans -- but my login used to display Stafford as well as private loans.

I'm curious if people have a similar experience to the government loans, or if I don't mail payments am I going to come out the other side with a defaulted loan?

The option of taking the interest compounding hit in order to save the payments to rebuild my emergency fund has some appeal, but not at the cost of a defaulted loan. Student loan collectors are nasty!

Hopefully someone has some input.

[Amy26]

I am also curious about this ... I have 2 or 3 private loans that I'm paying on right now. I'm lucky though cause my big ones are still deffered until 2010

[TeacherMomma]

I have AES loans and am currently in the stay, but can access the website and it says "no payment is due" but it does allow me to make the payment, which I have, and it has been accepted. I have only private loans with AES, no Stafford. I get no bills or anything, I just know it is due at the beginning of the month, so I log in to pay.

[kvangild]

I know for both my student loans the payment due stopped. I havent yet discharged so i'm not sure when the payment due resumes. But this short break helps a bunch.

[Amy26]

I'm also confused about my creditor list on my petition. I technically have 142k of unsecured debt listed on the petition but like 50k or so of it is student loans. Its listed however on the petition as "unsecured". All my credit cards say "credit card" but my private student loans say "unsecured". Then my sallie mae loans say "educational" and 1 of my private loans says "educational".

Is that gonna hurt me? To me it makes my unsecured debt look inflated... stupid student loans.

[jadams]

Just wanted to follow up that I finally got through to AES today.

They claim to still have not received my BK notification (understandable), but that seems odd considering I was locked out of the system shortly after filing.

She told me she was almost certain but checked with a supervisor, and my private student loans will go into a Bankruptcy Deferment until the case is closed. It will be showing late/past-due in a few days if they don't update before that, but she assured me that the deferment would be backdated to the date of filing. Payments would resume as scheduled once the case closes. She believes I would retain my current modified payment schedule that allows me two years of lower payments.

Despite the fact I should know better than trusting what AES tells me -- I'm going to live a little and use what I saved for this month's payment to get my eyes checked tomorrow and new glasses or contacts. It's been YEARS since I did that.

Maybe next month I can get a cleaning at the dentist.

Finally get caught up on all this things I could never finagle the money to do.

Hopefully it will work out and not turn out to be a mistake.

[Amy26]

Hmmm...interesting....Sallie Mae still shows me having payments due and I just sent them one.... what happens if you send them payments anyways even if they do bk forebarance?

[LuciluS]

Hmmm...interesting....Sallie Mae still shows me having payments due and I just sent them one.... what happens if you send them payments anyways even if they do bk forebarance?

Amy:

Give them a call. Usually there is a different address which would be the bankruptcy dept. I know this is true for mortgages and auto loans.

The regular address is probably a lockbox at a Bank and your check is floating from dept. to dept.

[Amy26]

Thanks again Luci... I just gonna start an "ask Luci" thread

[lrprn]

Sallie Mae is the embodiment of the devil. In the past filers have sent in checks that "got lost", were completely applied to interest because "the sender didn't indicate how to distribute the funds".....they know every dirty trick in the book.

If you intend to try to pay on your deferred student loans during your Ch 13, first please check with your lawyer to find out if there's any odd customs in your court that could cause an issue with your case.....like your trustee saying, "If you have enough disposable income to make student loan payments, then that money could be going to your creditors" and asking the court to increase your monthly payments accordingly.....something like that. I've never heard of that happening, so don't freak. Just want you to see that paying student loans that according to most bk trustees don't need to be paid can be tricky.

If your lawyer gives you the go-ahead, then you must find out exactly where to send the payment at Sallie Mae and exactly how to indicate the payment be distributed between interest and principal.

Then every six months without fail, tell Sallie Mae in writing and sending the letter registered return receipt to send you an accounting of your loan activity that shows all payments made and how they were each distributed.

We were luckier than most. Our ParentPlus student loan was transferred to a popular govt student loan holding company. We've been allowed to make payments when we could (mostly just to keep up with the interest). So far everything is being deposited as expected. But even then, I don't trust anyone involved in the student loan business these days to be on the up-and-up. The 2005 bk law gives all student loan lenders almost a blank check to screw debtors during their active bks, especially those in Ch 13s. Don't assume anything! Protect yourself at every turn.

[jadams]

I just wanted to update my post with the outcome. Reading how some private loans are handled in a BK filing I was scared I would come out the other side with a "default" and having to deal with a collection agency.

I have two private student loans. On the surface they were originally Bank of America Education Maximizer loans, but they are really the rather standard Teri Private loan managed by AES.

I had a payment due on 6/13. I filed on 6/10. I didn't make the payment.

It took almost a month for AES to update the account (and supposedly it was only that quick because I called many times and sent copies of the notice to several different addresses they gave me). A parent co-signed the loan and I was hoping to avoid any default or collection calls to them so I wanted the automatic stay information in the computer asap.

I could see the loans again when I logged in, but they were showing as:

Status: Repayment
VERIFIED BANKRUPTCY
Payment Due: $0
Next Due Date: -

I didn't make any payments (choosing to beef up my emergency fund at the expense of letting the interest accrue).

My discharge was entered and the notice mailed to my creditors on 9/23.

Today I received letters in the mail informing me that my loan information has been recalculated due to a change in status.

It's the usual letter they send out with the balance, interest, and payment schedule.

My payments are scheduled to resume with the first due on 12/22.

Other than them being $4.37 higher due to the interest the accrued during the BK (and these extra 3 months post-discharge forbearance), the payments were merely paused and I'll go back into the repayment schedule I was previously on.

If I make only the scheduled minimum payments I'll be paying roughly $940 more (over the 18 remaining years of repayment) because I didn't pay during the BK.

I think that's worth it for a good start to my emergency fund, and over 18 years I should be able to easily make up for that by making larger payments (now that I won't be paying all that credit card interest).

[TBLTZ]

I just wanted to update my post with the outcome. Reading how some private loans are handled in a BK filing I was scared I would come out the other side with a "default" and having to deal with a collection agency.

I have two private student loans. On the surface they were originally Bank of America Education Maximizer loans, but they are really the rather standard Teri Private loan managed by AES.

I had a payment due on 6/13. I filed on 6/10. I didn't make the payment.

It took almost a month for AES to update the account (and supposedly it was only that quick because I called many times and sent copies of the notice to several different addresses they gave me). A parent co-signed the loan and I was hoping to avoid any default or collection calls to them so I wanted the automatic stay information in the computer asap.

I could see the loans again when I logged in, but they were showing as:

Status: Repayment
VERIFIED BANKRUPTCY
Payment Due: $0
Next Due Date: -

I didn't make any payments (choosing to beef up my emergency fund at the expense of letting the interest accrue).

My discharge was entered and the notice mailed to my creditors on 9/23.

Today I received letters in the mail informing me that my loan information has been recalculated due to a change in status.

It's the usual letter they send out with the balance, interest, and payment schedule.

My payments are scheduled to resume with the first due on 12/22.

Other than them being $4.37 higher due to the interest the accrued during the BK (and these extra 3 months post-discharge forbearance), the payments were merely paused and I'll go back into the repayment schedule I was previously on.

If I make only the scheduled minimum payments I'll be paying roughly $940 more (over the 18 remaining years of repayment) because I didn't pay during the BK.

I think that's worth it for a good start to my emergency fund, and over 18 years I should be able to easily make up for that by making larger payments (now that I won't be paying all that credit card interest).

Thank for the update because im going to be in the same boat in about a week. Im going to be filing one day after my loans are do? Should I pay them or let it ride one day or two till bk is filed?

Thanks