Tuition and Bankruptcy

[suneray]

First of all, I want to say what a great forum this is. I have learned to so much and thanks to everyone for sharing.

I went to meet with an attorney today about filing chapter 7 bankruptcy (I only met with the paralegal though). My biggest concern is over the $3,000 tuition and other fees I owe to my college. I have completed my degree, but cannot get my transcripts or degree until I pay up... and I kinda need them to get a good job.

I told her about my concern, but she couldn't give me much advice. She said that the bankruptcy would discharge the debt, but they might still deny the transcripts even after I told her about the information I found on this website (http://www.finaid.org/educators/with...nscripts.phtml) that says schools cannot withhold transcripts during or after a bankruptcy. She said I could still pay them back after the bankruptcy, but then they could still also deny the transcripts because of the bankruptcy.

Has anyone gone through something similar? I read a post about dealing with it after bankruptcy, but I'm wondering if I jump on this with my attorney before I file whether I can avoid the same problems. My school's policy on holding transcripts does not mention bankruptcy. Would asking my school further about the policy or talking to an actual attorney help?

[blessed]

Someone else would have more knowledge about this. I have no experience with tuition being included in bk. But my first thought is that by them withholding your transcripts aren't they essentially trying to collect on the debt? And that's not allowed after the automatic stay is in place.

[momofthree]

This is something you need to speak to an attorney about, not a paralegal. Is there a reason the attorney didn't meet with you himself? Is this a BK mill?

[coolmom04]

I just went through this. I was told by an attorney that any loan that has anything to do with school.. even if it's not technically a "student loan" but you owe money to the school, it cannot be discharged through BK. My transcripts are being held for the same reason - I owe them $5K that cannot be discharged even though I was specifically told it is not a student loan by the school itself.

But, that doesn't mean the information I received is correct! Hopefully others will chime in.

I hope you get better news

[suneray]

Someone else would have more knowledge about this. I have no experience with tuition being included in bk. But my first thought is that by them withholding your transcripts aren't they essentially trying to collect on the debt? And that's not allowed after the automatic stay is in place.

According to FinAid.org, Colleges can't withhold transcripts once a bankruptcy has been filed or after its been discharged because of this. However, it appears that some colleges refuse anyway and filers have to either pay or reopen the case. So, I am wondering if I ask for my transcripts after I file but before I am discharged and they refuse, will the court order them to release the transcripts?

This is something you need to speak to an attorney about, not a paralegal. Is there a reason the attorney didn't meet with you himself? Is this a BK mill?

I didn't realize I would be meeting with a paralegal and not the attorney. I guess I should have asked. I hadn't heard the term BK mill before. I looked it up and am thinking that may be the case. It sounded like I wouldn't even meet the attorney until the 341 meeting. I think I am going to make an appointment with another office.

I just went through this. I was told by an attorney that any loan that has anything to do with school.. even if it's not technically a "student loan" but you owe money to the school, it cannot be discharged through BK. My transcripts are being held for the same reason - I owe them $5K that cannot be discharged even though I was specifically told it is not a student loan by the school itself.

But, that doesn't mean the information I received is correct! Hopefully others will chime in.

I hope you get better news

Thanks! That is too bad you couldn't get it discharged. Did you already go through with your bankruptcy? I read somewhere of someone having to reopen their bankruptcy case to deal with this issue. What I owe is tuition and also medical expenses.

[suneray]

Thanks eveyone for your replies. I just wanted to clarify my question to see if anyone can shed light on this.

From what I gather regarding the Automatic Stay, the withholding of official academic transcripts is interpreted as an action to collect a pre-petition debt and hence is prohibited during the pendency of the case or after a discharge of the education debt is granted. So, if after I file but before I am discharged, I request my transcripts and my school refuses to release them... can my attorney or the court make them? What happens if a creditor in general (like a collection agency) violates the automatic stay?

[Dst1]

Thanks eveyone for your replies. I just wanted to clarify my question to see if anyone can shed light on this.

From what I gather regarding the Automatic Stay, the withholding of official academic transcripts is interpreted as an action to collect a pre-petition debt and hence is prohibited during the pendency of the case or after a discharge of the education debt is granted. So, if after I file but before I am discharged, I request my transcripts and my school refuses to release them... can my attorney or the court make them? What happens if a creditor in general (like a collection agency) violates the automatic stay?

Sorry I overlooked this topic.

Here's the story. What you quoted above is correct.

HOWEVER!!!

Many educational intuitions are violating the law. Yes, you can force them to release the transcript but it might require a full-fledged lawsuit to do so. It's not gonna happen overnight.

There have been several cases around the country dealing with this issue. What's happening is that educational intuitions are claiming that tuition is a loan for education purposes and thus not dischargable. It's nonsense and every time it has come to court they have lost. But they are doing the bums rush on students hoping that most won't fight.

[Dst1]

I just went through this. I was told by an attorney that any loan that has anything to do with school.. even if it's not technically a "student loan" but you owe money to the school, it cannot be discharged through BK. My transcripts are being held for the same reason - I owe them $5K that cannot be discharged even though I was specifically told it is not a student loan by the school itself.

This is completely wrong. Find another attorney.

[Dst1]

BTW, if you need some law to refer to read this page.

http://www.cullenanddykman.com/advisory/advisorypage.asp?pubid=1044511172000

[ForumReader]

Read the thread and it reminded me of my ex having a hard time with the university--the university refused to provide the transcript or even the graduation diploma simply because my ex owed them $600.00. That was over 20 years ago and my ex still cannot get them until the $600 some balance has been paid in full.

Anyway, to the OP, I wish you the best.

[lostinnola]

My wife owes a college $2000 and my lawyer also told me that it would not be discharged with chapter 7. He said that his experience has been any money that you owe a college (regardless if it is a loan) is not discharged. He went ahead and put it on my case "just in case" but he said it won't work.

[DiamondsR]

They'll release your transcript

I owed a UC school that had a hold on my records because of an outstanding balance I was trying to pay off. Once I filed for bankruptcy and sent them a copy of the filing, they released my transcript. I've ordered about 10 transcripts during this time (just in case the debt won't be discharged) but they have released my transcripts based on the filing. They did tell me that I needed to send the discharge paperwork to them because "if it's not discharged, we'll stop sending out your transcript".

Educational loans can be discharged if you request a hardship exemption (what I have filed for and am waiting to hear the judge's decision). It happens rarely but it does happen.

[suneray]

BTW, if you need some law to refer to read this page.

http://www.cullenanddykman.com/advis...=1044511172000

Thanks for this. I will be sure to bring this to the next attorney I meet with. Hopefully he will be knowledgeable and willing to work with me on this.

I owed a UC school that had a hold on my records because of an outstanding balance I was trying to pay off. Once I filed for bankruptcy and sent them a copy of the filing, they released my transcript. I've ordered about 10 transcripts during this time (just in case the debt won't be discharged) but they have released my transcripts based on the filing. They did tell me that I needed to send the discharge paperwork to them because "if it's not discharged, we'll stop sending out your transcript".

Yay Thanks! This gives me hope! I think once I file, I will request my transcripts. If they refuse, I will send a letter referring to court cases that have ruled in my favor. Hopefully I will not have to go further than that.

There have been a number of jobs I wanted to apply for but can't without my transcripts or official degree. I wanted to pay them back before I filed but just can't come up with nearly enough... and I really just need to get my BK out of the way.

I will be sure to update on how this goes for me since it seems people have had different experiences with this.