Student loans and BK.

[bakergrl]

I am attending college and I recieved a letter that the lender of my student loans recieved notice of the BK so I called them to find out what I have to do now that I have filed.

My school has said that for the up coming semester I will recieve the student loan because I applied for it before the BK was filed. I have already bought my books and things on the financial aid but the classes have not been paid for yet.

So I called the lender and they want me to cancel this semesters loan (which is partially spent) because the lender has not given the money to my school yet (the school must advance FA funds) and reapply and sign a new loan and a new promissory note.

Is this something that is normally done? I am waiting for the school to call me back but I am really worried that the lender is going to cancel me now for this semester and the future, there is no way I can pay this out of pocket 3 weeks before the semester starts.

[SMinGA]

In my opinion, it is a technicality since student loans are not dischargable - but yes I think it is normal to have to sign a new master promissory note after filing.

[Dst1]

Who is the lender? Is it the federal government or a private loan?

[backtoschool]

You will most likely have to sign a new master promissory note, since technically, the old note is included in your petition. You will still get the funds, but they will need a new master promissory note and then they will be able to release the funds.